• by Maarten Albarda , Featured Contributor, Yesterday

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.

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.

This post was previously published in an earlier edition of Media Insider.