Commentary
On Principal Media: A Conversation With Acadia's Jared Belsky
- by Bill Duggan , April 24, 2025
In advance of the upcoming Association of National Advertisers' Advertising Financial Management Conference (April 27-30 in Carlsbad, CA), I sat down for a no-holds-barred conversation with Acadia CEO and Co-Founder Jared Belsky to discuss his unique views on principal media-buying, and much, much more.
Bill Duggan: You were recently named Ad Age's 2025 Agency Executive of the Year. Congrats. While there were multiple reasons you were selected, what stood out was your public stance against principal media. Please recap the key reasons you are against principal media.
Jared Belsky: There are five core problems with principal media buying. The first is that clients are not always sure if the media being selected for them is the ideal choice for them or the ideal choice for the agency's profit agenda. Second, there is a huge education gap with the ANA research indicating that over half of marketers don't understand how PMB works and 20% did not even know if PMB was part of their buy. Third, there is double-dipping as agencies are already getting paid for their services so how is this second margin dip fair? Fourth, there is contagion in that this is now making adjacent items like rebates and “no fee wins” acceptable when none of this should feel okay. Finally, now we are seeing that CMOs are sort of forced into “being in on it” in that some are using PMB to finance non-media activities like creative and analytics. Overall, what all these challenges have in common is that they erode trust in the industry.
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Duggan: The big advantage to the client for principal media is cost savings. In an environment where cost often matters, why is that a bad thing?
Belsky: What nobody appreciates is that CPM and other measures of “rate” are so easily manipulated that the “savings” are rarely real. Secondly, if there are savings that the agency can procure then why don't they just give that to the agency transparently as a show of their awesomeness versus trying to profit from it. If we are all of a sudden parsing the word savings, haven’t we all gone off the deep end?
Duggan: Are there specific circumstances where principal media could make sense?
Belsky: The one place where I think I can understand it is if there is a guaranteed outcome in mind. If there is a deal where the media procured via PBM is measured only on a cost per booking as an example and that agency is only being paid per booking, I can live with that as there is a more true north. And, there truly is some risk the agency is taking when they agree to that. I don't love this, but I can live with it as an exception.
Duggan: During recent years, clients have “squeezed” agencies on compensation and extended payment terms while procurement is often charged with uncovering cost savings. It can be argued that the marketers brought this on themselves. Do you have a perspective on that?
Belsky: Marketers did indeed bring some challenges to themselves. However, the right solution is not to cheat their way out of it. You innovate. You change staffing models. You change cost models. You change how and who you hire. You change scopes. How is this the only answer? Other industries have had similar challenges (chip makers for example) but they answered with innovation, not theft.
Duggan: We’ve heard of some agency pitches lately where it’s agreed that the client pays no compensation to the winning agency as long as that agency can use principal media. Do you have a perspective on that?
Belsky: I have heard the same. It's terrible. It's also not true. The client is not in fact being charged ‘nothing’. What it clearly assumes is the agency is able to make plenty to not only cover their team but to make a big margin off of principal-based buying. If procurement allows “zero fee wins” to be held up as a victory they will hurt themselves in the end for allowing a fake win to be held up as a victory. Any good CEO or CFO on the brand side can smell that pile of bull a mile away.
Duggan: Let’s move away from principal media. What most excites you about today’s media environment?
Belsky: Retail media has me excited and everyone else in our industry should be as well. Amazon, Walmart, Target, Instacart and all the other retail media networks are giving brands the opportunity to meet their buyers where they are and when they want to buy. Amazon is so much more than an ecommerce platform. You can target buyers with pinpoint accuracy on every type of inventory they offer. And if done properly, scale your business on Amazon without cannibalizing your existing DTC sales. It’s a game changer for our clients who want to increase their share of market.
The next generation of talent. They are optimistic. They care. They want to make great work.
I believe the industry is starting to shed some things that no longer work like the idea that all engagements must be “AOR” and there is revolution in areas like SEO, production, social and more. It's a great time to be in the industry.
Big is not better. I candidly don't think the center of the universe is the holding company complex anymore. PMG and Acadia are leading the way in performance. No Fixed Address and Highdive and others are leading in creative. Vayner in social/experience. And so on…. So yeah….it's an indie world and I am proud as heck to be part of it.
What I don't get about this is that if an agemcy with many clients buying ad time or space from the same seller can pool their total spend to obtain an extra discount for them all why is that so terrible?
Of course there must be not only full disclosure--and acceptance by the clients---- and the quality of the buy, ad positioning, targeting, media enviromment, timing, etc. must be right. Also the "audience" must be detemined independently. Finally, if the agency obtains , say, an extra 20% volume discount ----and this can be documented as real, not slight of hand, by an independent auditor--probably hired by the clients---then the agency should be allowed to keep a share of the gain for itself--as if it had bought for each client individually, the extra discount would not, in theory, have been gained. What should that share be? That should be determined by all of the participating clients in unison--and verified by an impatrial audit.
What is being argued about are deplorable or unfortunate cases where the agency is keeping its part of the deal secret and pocketing too much of the "saving", not being objective in recommending that its "partner" seller be used in the first place, using false information to mislead clients, etc, plus many clients not being staffed with media departments to ride herd on their media buys---or simply not caring. OK, So clean all of that up---then what's wrong with principle media? Just curious.
Ed - a couple of things are wrong...
First, some of the things you list in your 2nd paragraph aren't available with principal media.
Second, I pay my agency a decent fee to negotiate media rates for me, and I bonus them if they do a good job as a result of pooling client spend to get additional discounts, so why should they be compensated in triplicate by also earning an additional cut?
Third, they wouldn't have the volume to negotiate that extra discount if I did not give them my volume.
Fourth, there is an inherent conflict of interest that is difficult to detangle/independently verify...if the agency is building my plan, I cannot independently verify that the principal media already purchased does not influence the media plan. I'm willing to trust if I can verify, but there is no way to do that.
Yes the deplorable/unfortunate cases are bad, but what is also troubling is that there are many advertisers who don't know what they are getting into...like all those folks who got burned in crypto because they bought in without understanding what it is our how it works.
Kevin, I agree with you on much of this. However, it all depends on what media are involved. For example, let's say it's a cable channel and the advertisers who are recommended to use it by the PM agency agree--but under certain conditions----independent auditing of the income received by the agency and the amount it paid the channel---independent audinting of the audience delivery using Nielsen ratings plus information on where and when the commercials appeared for each client involved relative to the average positioning. Let's also suppose that the client has a media staff with some degree of expertise to keep tabs on this and , finally, let's suppose that the agency seeking to make an extra fee by pooling all of its clients spending obtained permission from each party--with full disclosure---agreeing that it would retain only a certain portion of the savings--the same for each client. Given all of that I don't see a problem. The agency is operating openly, and each client is benefitting, with audited results.
Now take the other side. An agency works the same kind of deal with an online media seller ---but unlike my first example, it doesn't inform anyone and "recommends"--or "helps" the computers to buy--- it's silent "partner" for many of its clients--even though this may not be a good fit for some--- or many--- of them. Worse, it accepts--or fabricates--- "audience" data to support its buy and does the same if questions are raised about ad placement--in other words it covers up for its "partner". Yep, I've gort a big problem with that. And you are right---there is no independent data or auditing in such cases to protect the interests of the clients--tha agency is scamming them.
What I'm saying--or asking--is why this method of buying must never be allowed no matter what the situation and procedure? Why can't clients seeking the lowest possible CPMs--and there are many, I'm afraid---be denied this kind of opportunity--provding they do their part of the job and make sure---in concert with other clients involved in the deal--to be treated fairly?
Ed,
If the PM agency agreed to provide audit rights, and operated transparently, then this becomes more favorable, but that doesn't exist in today's market. You are required to legally give up any and all audit rights to enter into these deals. You have no clue what the PM agency bought the inventory for, and how much of the discount they are keeping. You only know that you are getting a discount on what would have been the normal cost.
The PM agency is pre-buying the inventory. There is no collusion between 5 advertisers who give a PM $10 million each to go get a great deal for them.
Kevin, I'm sure that you are right about how these deals are now constructed--mostly, if not always--- by shady operators on both sides--sellers and buyers. But that doesn't mean that it can't be organized in a different way--providing it's all done openly and all of the parties--especially all of the clients involved working together with the agency---are actively part of the process--with the kind of auditing I mentioned.
It may well be that cleaning up the process would drive away the bottom feeders and low lifes now engaged--but I recognize that it's a shady area and there might be legal problems if major agencies, advertisers and media sellers try to do this on an highly visible basis. Are such deals going to interest the feds, for example?Might cause more problems than its worth, if that's so.