WPP’s Xaxis data cum media buying platform has come under fire recently for, among other things, a lack of transparency and the marcoms giant has moved swiftly and dramatically to remedy things.
WPP is investing $25m and injecting its ‘Xaxis For Publishers’ (XFP) business into independent ad tech company AppNexus in return for an undisclosed stake. XFP is claimed to be the industry’s second-largest publisher ad server platform, so its business is a big boost for AppNexus. The move will leave Xaxis as a standalone data business.
AppNexus, which competes with other agency-owned ad server platforms, has revenues of over $100m and is valued at a vertiginous $2.1bn in the US. It employs nearly 600 people in ten offices around the world and claims spending on the platform will reach $2bn in 2014. XFP’s staff will join AppNexus.
This is a considerable strategic retreat for WPP which tried to build Xaxis (whose technology it acquired when it bought 24/7 Real Media) into the biggest online ad marketplace. But WPP, in some cases anyway, was acting as both agency and media owner, inviting accusations of media broking – still a hot topic in the media world.
Whatever Xaxis was or wasn’t up to, it’s now decided on a different route, gambling that independent AppNexus will emerge as the platform of choice for the world’s biggest digital advertisers.
It will be interesting to see how other agency-owned platforms, most notably Publicis Groupe’s VivaKi, respond.