Must Read Google Unveils New Shopping Ad Formats And Packs More Demand Into Performance Max Streaming Was The Star Of This Year’s Upfronts Why This Server Company Launched Its First Ad Product – And Why It Won’t Be The Last Brands Lean On New Attribution Tech – Just Don’t Call It MTA – As Budgets Split To New Channels AdExplainer: The Difference Between AVOD and FAST The Pivot To AVOD Is Happening And The Trade Desk Is Here For It How TikTok’s Ad Platform Stands After A Half Year Of Whirlwind Growth And New Products Why Alternate Currencies Probably Won’t Take Center Stage At This Year’s Upfronts AdExplainer: The Evolution Of Retail Media » Another Path For Publicis-Omnicom: Turn Accuen Into A ‘Conflict Desk’ by Zach Rodgers // Tuesday, August 6th, 2013 – 12:09 am Share: Here’s a far out option for Publicis and Omnicom as they attempt to fit their trading desk units together: Allow the smaller of the two, Omnicom’s Accuen, to continue as a standalone unit to manage clients that are competitive with Publicis’s Vivaki AOD. It would be the programmatic equivalent of a “conflict shop.” Last week, when we examined the scenarios available to the holding companies’ respective trading desks, we considered the three most obvious paths forward. They include (1) shuttering Accuen, considered unlikely given Vivaki AOD’s approximately 125% growth trajectory so far in 2013, and resulting talent needs; (2) spinning Accuen off as a standalone company, probably also undesirable as it would take agency business with it; or (3) merging the two businesses into a single dominant trading desk entity. Were all staffers to remain intact, the combined unit would have a headcount of 425 and gross media billings north of $500 million. “In a market that’s growing over 50% annually and where we all have tons of openings, why would we contract in size?” said Vivaki President Kurt Unkel. “The logic just isn’t there given the facts.” A fourth path could allow the two trading desks to co-exist within the merged holding company. Accuen, led today by CEO Josh Jacobs, would handle – in addition to its current client load — exchange-traded media buys deemed competitive with Vivaki AOD clients. Jay Sears, GM of the Rubicon Project’s REVV Buyer demand-side offering, floated this possibility last week. “Just like there are agency networks inside the holding companies to avoid conflicts… look for the biggest holding companies to create two or more trading desks under the same holding company roof,” Sears told AdExchanger’s David Kaplan. “This will be done to accommodate both conflicts (competing clients) and different business models (transparent and nontransparent; fee and performance). This is a good outcome for the holding company.” Conflict shops have been employed more frequently in recent years. Just last month, AdAge reported Omnicom Group is preparing to launch a third media agency to compete for business alongside its OMD and PHD brands. The move is seen largely as a means to avoid concerns over competitive conflicts. Another example is CHI & Partners, which set up an agency to receive work for The Carphone Warehouse Group that would allow it to continue to serve Argos. In the PR sphere there is Edelman’s Krispr, created to serve Kellogg’s while avoiding concerns about its work for Quaker Oats. Such an approach has never been tried in the programmatic space, but it could be useful since clients have growing “trust issues” around how their data is deployed through the data management platforms employed by trading desks. A different-but-related business model, and one that may also be adaptable to trading desks, is the holding company practice of launching agencies to serve a single client. These companies can often expand to add new business. The golden standard in this category is Team Detroit, founded in 2006 from components of several WPP agencies all working on Ford Motors. It later added work for smaller clients such as Sports Authority and Carhartt. (The cautionary tale in this category is Enfatico, WPP’s single-client shop for Dell. It possessed agency-of-record status for Dell, but later lost it to Young & Rubicam and senior execs were reportedly let go.) In the digital trading arena, you can see hints of this in the client-specific trading desks that are housed and staffed directly at the media agencies — not trading desks. One example is the display ad buying hub WPP’s Mindshare created with Kimberly-Clark, without the involvement of WPP’s Xaxis trading desk. Representatives of Accuen and Vivaki AOD have so far declined to comment about their plans. But, as Forrester analyst Joanna O’Connell put it, culture and values may prove as large a challenge as the business model. “I think the introduction of ATOM into VivaKi had a definite impact on AOD,” O’Connell said. “And it was a learning experience for both parties. But the big challenge, like any merger, is how to deal with different philosophies. That’s tougher to deal with than combining technologies.” David Kaplan contributed. Enjoying this content? Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more! Join Today! Related stories: GroupM: Digital Advertising Experiencing ‘Fastest Growth In The History Of Advertising’ Legacy Brands Flex Their Pricing Power; Platform Ad Prices Skyrocket Hearts & Science US CEO Ralph Pardo On Rolling With Agency Transformation Amid The Great Resignation Goodway Group Stitches Together Identity Graph To Complement Brands’ First-Party Data Meet Two Startups Taking Advantage Of The Privacy Tech Boom 1 Comment Cynthia August 6, 2013 Besides the obvious combination of the trading desk scenario (and I agree with the above conflict idea), the logical reason for the combined companies is to scale up internationally and level the playing field to compete with WPP. WPP is much larger internationally especially in emerging markets which have become more and more important to the bottom line long term growth.