The industry's largest media buying group is making a power move that promises to shift the balance of power in digital advertising, according to a new report by Ad Age.
GroupM "plans to pull its clients' budgets from open ad exchanges by the end of the year, as first reported by Beet.TV," the story reports. "Open ad exchanges offer vast pools of digital inventory to buyers through automated processes, part of the broader world of so-called programmatic buying. But when GroupM wants to use ad technology to buy digital inventory next year, it hopes it can instead rely on arrangements with publishers operating private exchanges or using automated tech to process direct sales. GroupM already has 91 such deals in place."
The report call GroupM's strategy both a power move and a defensive measure.
"GroupM doesn't want to bid on relatively random inventory in auctions that almost any advertiser can enter, nor does it want to risk paying for wasted ads on sites it or its clients don't want. It does want to deal more directly with publishers so that it can assert its leverage," Ad Age reports.
With $73 billion in global ad spending, "GroupM sits atop the food chain," the report notes. "But open exchanges put other bidders on its level."