With the merger of Xaxis and 24/7 Media, Caspar Schlickum, MD EMEA, Xaxis discusses the implications of the merger on the two WPP entities and the market in general.

Why merge Xaxis and 24/7 Media now? What value does it add to both companies?

The timing for this merger is perfect. Xaxis has continued to grow phenomenally to be a USD $400m business globally, working for over 1,500 brands. We are incredibly proud of the value we have brought to the clients with whom we work. Technology is at the heart of that strategy. Our DMP fuels our audience segments and helps to target advertising to them across our publisher partner sites. The merger means we are bringing together the assets and capabilities of two leading WPP companies — the buy-side expertise and audience-targeted media products of Xaxis with 24/7 Media's advertising technology and publisher focus. That means that Xaxis benefits from a phenomenal installed base of publishers who are already using OAS, and who will benefit directly from a tighter programmatic integration with the demand we bring.

Is this a case of WPP in-housing development around two key tech and data-driven parts of its business?

Our strategy has not changed since day one. We have always said that we focus our development capability on those parts of the stack that deliver real value for our clients and agencies. Today, the DMP represents a critical part of that strategy. We had the first DMP in the business, and 24/7 have been supporting Xaxis with ongoing development and operation of that DMP since we started the business. So, WPP has always had a proprietary strategy in this regard, and this merger only strengthens that resolve.

Will those publishers currently using the 24/7 adserving technology unlock more spend, given the greater integration?

Yes. 24/7 have always been a business that has served and worked with publishers, and used its technology to help advertisers achieve maximum yield from its advertising partners. So, the publisher-side DNA runs deep in that business. However, for Xaxis, publishers are also critical in delivering audiences to the brands with whom we work. Over time, publishers who work with our technology will have more access to demand, however our plan is not to build a closed ecosystem by any means, and we will work with all publishers, and of course do nothing to restrict publishers from accessing other sources of demand.

Is this a pivot by Xaxis, or more a development of the trading desk/internal ad network model?

It’s interesting that the fundamental marketing problem has not changed since marketing was invented. Brands want to engage with audiences to sell products. At Xaxis, we really believe that better advertising is in everyone’s interest: publishers and advertisers, as well as the people in the audience. Our positioning as an audience business remains absolutely unchanged. The only thing that has changed is that we have a much more powerful platform now to bring the publisher and advertiser sides of this together programmatically.

Will Xaxis now be getting closer to the publisher through the 24/ 7 media ad server? Is this the Xaxis programmatic premium play?

Being part of GroupM has always given Xaxis the ability to integrate publishers directly into our demand. The relationship we have with publishers has always been as important to us at Xaxis as the relationship we have with the brands with whom we work. The integration with 24/7 and their publisher technologies gives publishers another way to work with us, and a very compelling way for them to integrate programmatically with our demand. So, yes, it definitely brings Xaxis even closer to the publishers, although we were already very close!

Is this an about face from working with outside vendors — and more of an attempt to build rather then partner?

Absolutely not. While we believe that proprietary technology is a massive differentiating factor for Xaxis (and therefore WPP), we are smart about how we deploy our technology development resource. Having that capability within Xaxis (rather than provided to us by 24/7) does not change that. We will focus our development effort on those parts of the stack that drive real strategic value for the brands we work with, and for our business. The DMP is a great example of this, as it means brands can be comfortable about how their data is used, and not used, given that they have a contractual relationship with us. However, our technology capability also enables us to evaluate and integrate partner technologies very deeply into our stack. We have over 50 of these globally between us, and the new Xaxis will benefit hugely from the smart ideas and technologies that our partners brings us.

Should publishers be worried about this development?

Absolutely not. There is tremendous advantage for publishers in this merger.