WPPâ€™s Xaxis has launched a pay-for-performance media model, expected to outstrip its other revenue streams.
The new unit is called Light Reaction, a new mobile-first performance advertising business and will be rolled out across 20 markets across North America, Europe, Asia and the Middle East.
The business promises guaranteed pricing, tied customer outcomes such as sales, leads and downloads, said WPP. Light Reaction will be led by general manager Paul Dolan, who previously served as executive vice president, general manager, performance marketing at Xaxis.
â€śWeâ€™ve developed a model for performance marketing that allows brands to meet precise objectives of customer response while drawing a direct line between ads and results,â€ť said Dolan.
One example of work Light Reaction has done is German retailer Walbusch, where it was tasked with the specific outcome of driving new customer sales. Light Reactionâ€™s campaign increased new customer sales by 17 %, while decreasing new customer acquisition costs by 8%. According to the agency, this was under Light Reactionâ€™s pay-for-performance model and the client only paid for directly attributed new customer sales.
“We see this part of the business growing as rapidly if not more than the business we already built within Xaxis,” Xaxis CEO Brian Lesser told AdAge.
Performance marketing currently assumes about 10% of Xaxis’ more than US$700 million business.
Light Reactionâ€™s platform was created after Xaxisâ€™ acquisition of ActionX combined with GroupMâ€™s QUISMA tool and Xaxisâ€™ own Turbine.
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