Transparency needs to be incorporated into the foundation of any advertising agency. When a client loses trust in its media buying partner, the agency runs the risk of losing the client and potential new business if it becomes known that the agency employs unscrupulous practices.

Conversation focused on transparency has leaped to the forefront of the industry with the expanding interest in Principal Media buying. The practice is the process where media agencies purchase media in advance, in bulk, and then resell it to their clients, often at a price that is higher than they paid but lower than what it would cost to buy in the open market. 

The practice is not new – reports indicate it has been used for a decade or more – but has become more widely used in recent years. The traditional practice of media buying agencies is to act as agents when purchasing advertising industry for clients, obtaining what a brand needs for planned campaigns.

Many agencies believe Principal Media creates several fundamental problems. One of the primary issues is the lack of transparency. Advertisers may not have full visibility into the actual cost of the media, the agency’s profit margins, or the specific media placements and quality.  

“The majority of revenues being made in this way are non-transparent, often unknown by the clients because they are beyond the reach of their contracts, despite the perpetual rewriting of contract templates by advertiser trade associations to catch as many of these as possible,’’ a report in Encycolmedia International said. 

Principal Media also raises the concern of a conflict of interest. If an agency is acting as both advisor and seller, it can prioritize selling its inventory rather than the most effective options for a client’s campaign goals.

One other issue many people find is data ownership. There can be uncertainty surrounding data information and usage when agencies are handling Principal Media buys, potentially limiting advertisers access to valuable campaign data. 

There are advantages to Principal Media. Primarily, it can help reduce advertising costs. Agencies can secure inventory at lower rates due to bulk buying and negotiate better deals, potentially translating to cost savings for clients. It also allows for faster campaign launches and access to premium inventory.

The debate over the use of Principal Media is likely to be ongoing. While some agencies embrace it, BCM Media has relied on standard media buying practices. Transparency builds trust with clients, and it is critical to maintain that trust for the duration of the relationship. Our primary focus is to help clients navigate the complex media landscape by providing the best media mix through precision targeting and responsible spending with traditional methods and modern tools. Experience suggests that it is the correct approach, and results for our clients prove it.