Baylon, who is set to take the reins in January 2014, will form one third of a new senior team, supported by the trading operations directors, Ben Chester and Erica Taylor. The trio have 22 years' experience at SMG between them.
In his new role Baylon reports to Chris Locke, the director of trading at Starcom MediaVest Group. Chester and Taylor will report to Baylon.
SMG described the move as "a natural evolution" for its activation department, which is responsible for media buying for clients including Ford Retail Group, Heineken, Procter & Gamble, Samsung, Tetley and Yahoo!
Meanwhile, in his new role, Davidson will oversee trading, investment and all other commercial activity for out-of-home agency Kinetic UK. He will report to the UK chief executive, Stuart Taylor, who welcomed his "rare mix of broad media experience and blend of commercial acumen and creative thinking".
Taylor said: "There is so much opportunity in this dynamic sector right now and this appointment will add strength and depth to both our management team and to the vital relationships we have with our clients, vendors and our partner agencies."