Future of Marketing Briefing: The mental gymnastics of principal media

For some, the model nudges decisions toward the agency’s balance sheet, not their objectives. For others, it’s a tradeoff to be structured and contained with the right guardrails.

Welcome to the psychological CrossFit class of modern marketing. Here’s how marketers are learning to move through it:

Step 1: Accept that your “agency” is not really your agent

The first mental hurdle is linguistic. “Agency” is a word that suggests representation — a fiduciary in an advertiser’s corner.

Except, today’s holdcos are vertically integrated marketing operating companies. They sell media, data and products of their own, not just brokerage services, said Ruben Schreurs, CEO of media management firm Ebiquity.

That shift forces a reset for CMOs. The agency is not a neutral intermediary anymore. It is a commercial counter party with inventory to move and capital at risk. Once that’s clear to marketers, the dynamic changes.

Step 2: Decide whether to play

Some marketers, including Procter & Gamble, have drawn a bright line against principal media, preferring harder fee negotiations without them to embedded conflicts with them. To these marketers, principal buying introduces a model where inventive misalignment is built in rather than incidental.

Others — often more performance-orientated advertisers — accept thinner transparency if the economics and guarantees deliver. In that equation, provenance matters less than outcomes. 

Then there’s the middle camp. These marketers permit principal activity but try to content it. Their contracts now specify when an agency can act as a principal, in which channels, under what conditions and at what disclosure level. Caps are set. Approvals are required. Audit rights are expanded. Media plans must label principal inventory explicitly.

“It’s important to realize how quickly this can become a fool’s errand for marketers who aren’t properly clued up on this,” said the former chief media officer of a publicly listed company. “You can think you’re being smart by putting in caps on how much principal media is bought, but the truth is agencies are so desperate to pile into principal media that they’ll play fast and loose with the contractual obligations.”

Step 3: Normalize the trade off

For marketers who allow principal media, the next adjustment is owning the compromise without pretending it doesn’t exist. Not least because it didn’t spread in a vacuum. Years of fee compression, demands for guarantees and tolerance for opaque programmatic systems squeezed agency margins. They responded by aggregating buying power, pre-purchasing inventory and monetizing risk. Principal media became, in effect, the market-clearing mechanism of that pressure. 

From there, outrage gives way to calculus for marketers. Less granular reporting can be acceptable if pricing improves. Limited transparency can pass if delivery is guaranteed. Scarce inventory can justify its path to market provided the trade-offs are spelled out upfront. Granted, these are new concessions. Marketers have been wrangling them for some time. What’s different now is the documentation. Contracts increasingly define which conflicts are acceptable and which are prohibited. Undisclosed rebates and kickbacks are explicitly barred in many instances. Meanwhile, transparency thresholds are negotiated rather than assumed. The tension doesn’t disappear so much as it becomes formalized.

“Of course, these deals can be an issue as we’ve seen over the years with the amount of kickbacks and rebates in play,” said Schreurs. “But everything has its pros and cons. Ultimately it’s about having the right contractual agreement in place.”

Step 4: Governance as guardrail — and cover

There’s no disciplined approach to principal media without visibility. Marketers want to know what share of a plan flows through principal inventory. Some require side-by-side scenarios showing plans with and without it to see the economic delta. 

On paper that looks like control. In practice, it’s uneven. Global contract terms don’t always cascade cleanly to local teams. Approvals sit with executives who may not fully grasp auction mechanics or margin structures. A small line item can carry outsized economic weight. Audits trail the spend. 

Still, structure counts. They set boundaries, force disclosure and create paper trails. In a system built on negotiated trade-offs, the paper trail protects as much as it prevents. 

As Bill Duggan, group evp at Association of National Advertisers, has noted, many agency contracts historically sat untouched for years, drafted in an era when agencies were presumed brokers rather than counter parties. That governance lag allowed ambiguity to persist. The new generation of agreements is an attempt to close it.

A recent Forrester report underscored how uneven that evolution remains. Marketers familiar with principal media described using tighter contracts and more explicit governance to protect their interests, said the report’s author Jay Pattisall. At the same time, he noted that many advertisers still lack the knowledge or leverage to negotiate those terms effectively. For them, the education process is only just beginning. 

Step 5: Choose which discomfort you can defend

By this stage, the debate is no longer about whether principal media carries structural conflict. It does, The live issue is which risk is easier to defend internally: Being steered by a partner with inventory to clear. Or forgoing scale, preferred access and terms competitors may be quietly taking. Because at this point, its clear principality media is only going to get bigger. Agencies no longer frame it as a workaround. They present it as a capability — aggregating demand, deploying capital and securing advantages smaller buyers can’t match.

Not every advertiser will understand the plumbing behind all that, and not all will want to. What’s clear is that the center of gravity has shifted. Principal media is less an exception than part of the operation baseline. 

Bottom line

If this all sounds like mental gymnastics, that’s because it is. An industry that once marketed fiduciary alignment now leans on flow charts, scenario models and legal scaffolding to manage an embedded conflict. But outrage won’t solve that. Fluency does — a working grasp of incentives, tradeoffs and governance gaps strong enough to justify a choice inside the boardroom.

Numbers to know

9.7%: Percentage of global CTV ad spend Netflix is set to take in 2027

74%: Percentage of U.S. adults that support federal rules that would prevent the collection of personal data via social media, on children

$1 billion: The annualized run rate reached by Snapchat’s subscription business, which now totals 25 million subscribers

54%: Percentage of YouTube viewing that is on a TV screen across all demographics, in the U.K.

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