©IDG Communications, Inc. Photo contributed by Matthew Mikaelian.
Over the past few years, digital media agencies have embraced buying ad inventory in a manner akin to how Wall Street traders purchase stocks. Now some agencies are accused of embracing the flip side of Wall Street: greed, recklessness and insider access.
According to multiple industry sources, some prominent brands are growing increasingly uncomfortable with their digital agencies funneling money to sister company trading desks (the holding company divisions that purchase ad inventory on exchanges). They are asking questions about how these trading desks earn revenue and whether clients are being charged more than once for executing the same media plan. The shift to programmatic audience-based ad buys through exchanges is undeniably an important advance to the online ad model, but agency holding companies have also taken it as an opportunity to update their own outdated business models in ways that are likely to leave some procurement chiefs scratching their heads. Read more