Commentary
Normalizing Principal Media Buying Is Not Normal
- by Maarten Albarda , Featured Contributor, March 28, 2025
Principal media buying, once a shadowy practice, is now well and truly center stage. The recent revelation that Meta is now offering this "service" to agencies is kind of like the straw that broke the camel’s back.
I am calling it. Principal buying, in its essence, is a betrayal. It moves the agency-client relationship from a trusted partnership into a minefield full of conflicts of interest. The agency, instead of being a fiduciary, becomes a vendor, pushing its own inventory, its own margins, its own agenda.
With principal buying, the agency is no longer working for the client but for themselves. In effect, the agency is now competing with its own clients for the same media space. We all know high-quality media space is in short demand. If large agency holding companies start reserving big chunks of this media space to buy for themselves, there’s only one implication: Prices will go up for what is left on the market.
The reason agencies are doing this, of course, is that the margins are very attractive. How attractive? Well, part of the problem is that nobody knows. According to consultant Steve Boehler, agencies make anywhere from 20% to an incredible 70% on top of their existing fees. So, just to be clear: They are already charging advertisers for planning and buying, and then they're making money with a hidden margin on a media plan you paid for. And you don’t know if the plan includes media you need -- or media they just need to offload.
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This is about transparency and trust. It's about the fundamental integrity of our industry. We're witnessing a systemic erosion of the principles that have long defined our profession. In that respect, our industry is following in the footsteps of our country’s politics.
So, what's the antidote? Regulation? Good luck with that. Those who benefit from these very practices have found a new, powerful ally in the current government. They are all in the good graces of the current political leadership. There's probably not even people left in the Department of Justice or Finance to regulate anything.
The only viable option is for clients to reclaim control and consider building a practice for media strategy in-house. Sure, use an agency to help you buy media, and perhaps even allow the agency to include its principal-media inventory in your buys. But, and I can’t stress this enough, it can only happen for those media touchpoints that you have sanctioned for inclusion. Another option is for more clients to pursue deals with the media owners and media platforms directly, cutting out the middlemen.
Finally, what marketers must do is revisit their master services agreements and statements of work. Push language into your master services agreement ensuring that your agency can only include principal media inventory with your say-so. This language should extend itself to cover all family members of your agency holding company. The Association for National Advertisers has some great resources to help you or your legal department with using the right language.
Doing this may require some radical moves, but it's the only way to ensure transparency, eliminate conflicts of interest, and reclaim power. We can no longer afford to be complacent. We can no longer pretend that this is just business as usual. It is not. We need to act.
Maarten, while I happen to agree that principle buying raises many issues that must be addressed, the basic motivation for both the agency and the client is forr the agency to use the combined "clout" of the media budgets for many clients to scure extra low CPMs for all via an agency bulk buy with a particular seller which is then sold off to many clients.
The main complaint is that many clients don't know what exactly the agency is doing and what it makes on the deal---but they could if they really paid attention to media. There is no reason why an honest agency won't disclose to a client what it makes on such deals and that figure can be negotiated into a specific fee that both parties agree on as it is justified by the CPM savings thus generated.
The ANA has released some very sensible guidelines that advertisers should follow to control the process, including a thorough analysis of the merits of each buy---how it compares to alternatives, what it adds to reach, targeting, etc.--as well as full disclosure---with auditing ---if needed---to ensure that the agency is being open and truthful. If, given all of that, the agency is found to be lying--and this may happen with some disreputable agencies, though I doubt it will with most----then the agency can be held accountable and not only fired but made to pay what it earned over the agreed upon principle buying fee.
It's simple, really. Clients should get much more involved with how their media dollars are both planned and spent---and stop moaning and groaning about what the agencies are doing. Affter all they, the agncies, are acting as agents for their clients, aren't they?
You would think those in control learned something from the Jon Mandel huge expose....Guess not.
I am going to guess that it is because there are still few "procurement" folks who know media. They know costs. They don't know how to do media mix modeling. They don't know how to measure outcomes. They only seem to focus on the cost going in...and they can count it. Like a promised lower cost (even though the bit about clout is bullshit...except in limitless supply, a vendor can not give his lowest cost to the biggest guy because then he won't "make his number". You need to be big enough to get noticed as a buyer but small enough that you can walk away from a bad deal. Also, many principal deals are not actually principal because they agency isn't buying and taking the risk of it being unsold. They are just promising a share of spend to the vendor so really don't take risk. But procurement isn't happy because they can check the box I got it cheaper (the agency is grading its own homework) while being ignorant if you actually paid more because it was the wrong media and you could have gotten better product sales. All of this is simplistic explanation of course given the comment box.