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By Alexandra Bruell 

The new regime at WPP PLC's GroupM is making big changes to its central ad-buying group as it prepares for a future in which more media is consumed digitally and ad deals are more reliant on data and technology than handshakes.

Rino Scanzoni, the GroupM ad-buying veteran who influences tens of billions in media spending each year, is moving out of his role as North America chief investment officer. He will become executive chairman and CEO of GroupM's addressable TV group, Modi Media, as well as its barter group, Midas Exchange, which essentially helps companies trade distressed assets for media inventory.

Lyle Schwartz, GroupM's managing partner for research and marketplace analysis, is becoming president of investment in North America, taking on media buying and negotiation responsibilities across TV, digital, radio, print and local media. Mr. Schwartz has worked closely with Mr. Scanzoni, but he's known more for his experience in research and analytics than TV network negotiations.

GroupM is also consolidating its central resources and dividing them into two groups -- investment and platform services. The investment group, which includes the network-level ad-buying team that negotiates with ad sellers and houses buying resources like research, will be overseen by Mr. Schwartz, while Phil Cowdell, CEO of Mediacom North America, will move into a new role overseeing platform services. The platform services group will incorporate most digital operations, including GroupM's search and social group Catalyst, data and analytics resources, and the network's programmatic buying group that offers disclosure on agency and media costs.

It's an effort to get the separate operations "to learn from each other, " said GroupM North America CEO Brian Lesser. "Five years ago, search marketing was very different than programmatic media. Now you can use audience data to power search marketing and use elements of search to get smarter in how you trade programmatically in display video and other channels."

Mr. Cowdell and Mr. Schwartz will both report to Mr. Lesser. Mr. Scanzoni will continue to report to GroupM global CEO Kelly Clark.

Xaxis, which is GroupM's alternative programmatic buying operation, will remain separate and focused on building its supply-side model and performance-based buying. Unlike the company's other programmatic buying group, Xaxis takes principle ownership of media inventory and asks clients to sign nondisclosure contracts that mask the media and agency costs.

GroupM agencies, including Mindshare, Mediacom, MEC, Maxus and Essence, will also continue to operate independently within the network.

On the investment front, the change in leadership is a direct response to the changing nature of trading. "Trading is more dependent on technology, data, and tools," Mr. Lesser said. "That's becoming more important as more media channels become digitized and as they become more measurable on an individual user basis."

That doesn't mean that GroupM will stop going to market as a collective group when negotiating with the big media owners -- a strategy sharpened by Mr. Scanzoni to gain leverage for better pricing. It means that data will continue to play a bigger role in those negotiations, according to Mr. Scanzoni.

"I don't need a vendor to tell me what I should be buying from them," he said. "We think that it is our responsibility to seek out the value, assess it and apply it to our strategies."

The changes come almost two months after GroupM brought back longtime agency executive Kelly Clark to serve as global CEO and a little over a year since it elevated Mr. Lesser from Xaxis CEO to GroupM CEO in North America. At the time, the move signaled a commitment to investing in more digital resources.

The latest leadership changes not only drive home that message, but also signal a heightened emphasis on diversification of revenue at a challenging time for the agency business.

"I think the business is reliant on incremental revenue from every specialty business," said Mr. Scanzoni. "There's no doubt the core business from a profitability standpoint has challenges. Specialty businesses enhance the revenue growth for the company which benefits us and our clients."

Mr. Scanzoni will focus on two of those specialty businesses. His plan is to scale GroupM's addressable TV group Modi, which launched in 2015. "We're probably at a point in the marketplace next year where 70% of households by the end of 2017 are able to receive an addressable TV message," he said. He also wants to scale barter group Midas and expand its customer base beyond WPP and GroupM clients.

Barter agencies typically help clients liquidate assets -- anything from office furniture to real estate -- in exchange for media credits that the barter agency acquires, typically through investments it makes in media companies' businesses. Today, barter looks different, said Mr. Scanzoni.

"The business is much broader than 10-15 years ago, which was just taking a product that is either discontinued or underperforming," he said. Now, there are trading programs that don't involve any client assets.

Barter is an area in which GroupM takes principal positions on media inventory. That practice, and its built-in nondisclosure contracts, will likely grow as Midas scales, and as Xaxis continues to grow its own business within the network. Still, GroupM isn't putting all its eggs in one basket.

"Within GroupM, there are certain things that will be fully disclosed and others that are non-disclosed but always transparent, and it's about getting that basket of services right for clients," said Mr. Lesser.

Write to Alexandra Bruell at alexandra.bruell@wsj.com

(END) Dow Jones Newswires

November 14, 2016 09:14 ET (14:14 GMT)

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