Trading Desks, DSPs – I Mean Demand-Side Platforms – And The Agency – @4As Transformation LA Conference

Trading Desks, DSP And The AgencyAs part of the breakout sessions on the first day of sessions at the 4A‘s “Transformation LA” conference,  agency trading desks and their competitors gathered on stage for a frank discussion on the use of trading desks and demand-side platforms (DSPs) at the agency.

Before the panel began, questions swirled!… “Will agency players in the crowd know what a trading desk is? And, how much will they care?” They should care in that it’s a large part of digital, audience buying strategy for the advertising holding companies. This panel is “in the weeds” compared to last years panel that was most closely relevant – a “communications” panel that included OMG Annalect’s Scott Hagedorn and UM’s Jackie Kelly.

It should be noted that the trading desk panel was preceded by an uninspired discussion about agencies’ digital transformation from creative officers at a selection of top-tier creative agencies. Among the questions addressed was media’s involvement in digital which was met by dull thud on stage. The crowd had thinned out a bit by the time the trading desk panel had started.

The panel itself was guided by Dave Morgan, CEO of Simulmedia, as he brought his Tacoda and Real Media ad network background to a discussion that he helped inspire. Morgan began by saying that the panel had a “no acronym” rule. Demand-side platform, yes. DSP, no.

Starting with misconceptions around trading desks and DSPs (acronym!!), VivaKi’s Kurt Unkel stressed the importance of addressability and how this leads from display to TV. Mediabrands’ Quentin George made the point that the audience for the creative panel should have been in the audience for his trading desk panel – creative needs to get its head around telling a story through addressable media and it’s not happening today.

Morgan probed the “Wall Street” metaphor as it relates to trading desks. Accuen’s Josh Jacobs said that the industry needs to move past “arbitrage” to serving the client. Systems integrators made more sense to Jacobs then the Wall Street analogy.

Xaxis’ Brian Lesser said he expects that over time the data and technology services that a unit like his provides will start to move back into the agency. For now, Xaxis and others will drive on the audience buying opportunity, looking to keep up with innovation and prepare for an addressable future.

Collective CEO Joe Apprendi talked about the evolution of media buying as clearly the move from buying placement to buying audience was due to the help of data. But along with that, Apprendi pointed to all the solutions floating in the space these days and the requirement that a company like his and those on stage must manage to provide the latest and greatest to clients.

Accuen’s Josh Jacobs responded to the idea that this new buying model was inspired by enterprise resource planning. He said this actually gets a company like his closer to the client. Mediabrands’ George said that Marketing is the last thing to be optimized in the enterprise and that all the data – such as CRM – could be of great value to make marketing more effective. He expected more examples of this in the future.

The direct response perception of programmatic buying and trading desks was something VivaKi’s Unkel said should be embraced as there is a lot to learn. Xaxis’ Lesser said that data was now starting to tell how effective advertising is by matching spend to in-store sales. His suggestion was that the way advertisers and their agents think of success in advertising is changing.

Boldly, Mediabrands’ George said that 100% of their trading desk’s compensation is related to business results and he believed that this is important in order to change the dynamic with clients and match performance to results.

Lesser followed to discuss the indirect impact of his world on television buying since what his company does is track behavior – which is as much indicative of online behavior as off and there are planning aspects to the data which companies like Xaxis is managing and analyzing. Collective’s Apprendi stressed a “qualitative” angle to all the data – how is my spend affecting reaching the “right” audience?

Mediasmith CEO Dave Smith asked from the audience asked about the planning potential of the data and when these tools were coming. The panel agreed this was an innovation that is coming with Accuen’s Jacobs adding that training will be an important component of making the most of the data and analytics available to the planning community.

Next, privacy was brought up by a member of the audience and moderator Morgan gave everyone on the panel a chance to respond. This remains a hot button issue – especially for those outside of the audience buying space who are considering getting their toes wet.

“The Saudi Arabia of Big Data” was the description used by an audience member about Facebook as he suggested that Facebook might scoop up a large part of the data-driven space similar to how countries own the oil market. Unkel said Facebook’s data was very attractive and Apprendi said if you’re not understanding Facebook, its data, its impact on marketing – “get on it” today.

Finally, regarding spend trends, VivaKi’s Unkel said non-endemic advertisers (traditional) are driving spend through his platform. Morgan took the opportunity to bring up “the upfront” and whether that will be of value to the trading desk crowd. Unkel added that the upfront model is here for now and as the trading desk model is incorporated, perhaps it can change the way media was bought and sold.

By John Ebbert

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  1. How un-inspiring. I’d love too see a panel with the worker bee’s showing how they drive performance. Machine learning and media trading will look like the gum and duct tape operation that truly exists.

  2. The ANA publishes a whitepaper on the “opportunities” and real concerns surrounding the tradings desks, AdAge in 2 separate articles last month referred to trading desks as “scams”…and this the discussion at the 4AAA’s. Absolutely pointless and self serving

  3. There are a few key findings here about the trading desks: IPG are working from a performance model (in some way, shape or form); WPP are using trading desk-driven insights to influence television (not the first time I’ve been happy to hear this); and the trading desks could be looking at “upfronts” or futures as a consideration for buying models.