Stagwell buys Freestar, putting publisher ad sales inside a holdco

“Publishers are essential to a healthy media ecosystem, and we believe that their long-term success is critical to the future of our industry,” said Ben Berenstone, CEO of Owned Media, Stagwell. “Freestar has built an exceptional global business helping publishers increase revenue and improve operational efficiency in a complex programmatic landscape. Together, we’ll continue investing in that mission, while bringing new capabilities to support their growth and their clients.”

Freestar is the latest piece in a supply-side buildout that it has been working on all year. In July, it launched Stagwell Curate, an in-house marketplace that uses tech from startup SWYM.AI to package publisher inventory before it ever reaches the bid. Stagwell’s AI agents plug straight into it. That same month, CEO Mark Penn told analysts more owned media acquisitions were coming. The pressure to make them is easy to spot, since Media and Commerce, the segment Owned Media sits in, grew 1% organically in the second quarter. Owning the company that runs ad sales for dozens of publishers gives Stagwell a far more direct line into their inventory. It also raises questions about how Stagwell will keep its buying and selling interests apart. 

“Principal is central to holdco rev generation,” said Ciaran O’Kane, general partner at venture capital fund FirstPartyCapital. “If holding companies are carving out a meaningful share of open internet spend for principal-based deals, it makes sense for them either to own the infrastructure or to lock in strategic partners to run it. What should raise alarm bells is an agency that routes all its media through an execution layer except its principal media. Outside of principal media buying clients will need to know why that spend is running through its O&O stack. Transparency will be even more top of mind.”

Concerns aside, the logic behind the deal is hard for any holdco to ignore. The big networks have spent the past couple of years building their own orchestration and agentic buying systems, betting that AI agents will handle a large share of programmatic spend by the end of the decade and wanting those agents to run on infrastructure they own. Meanwhile ad tech keeps collapsing in on itself. The Trade Desk build Open Path to buy direct from publishers sans supply-side platforms (SSPs), and those some vendors now let buyers skip the likes of The Trade Desk altogether, Each shortcut is a scrap over who keeps the fee in the middle and the holdcos have learned from principal media just how much that fee is worth. Owning the company that already runs ad sales for hundreds of publishers put Stagwell at the supply end of the chain without having to negotiate its way there.

“Freestar has always been focused on helping publishers unlock more value from their businesses,” said Kurt Donnell, CEO of Freestar. “The best outcomes happen when advertisers know exactly what they’re buying, and publishers are rewarded for the quality they deliver. Stagwell understands that. Joining them lets us offer publishers new capabilities, while staying true to the publishers new capabilities while staying true to the publisher-first approach that has always been our north star.” 

Working with ad tech companies like this — the ones that help publishers monetize their inventory — has become stable stakes for holdcos. The aim is to decide for themselves which publishers’ ad slots get bundled up and sold to clients, a job that has traditionally belonged to SSPs and companies like Freestar. Steering budget toward publishers where they’ve already negotiated preferred rates gives holdcos leverage at the table and a proof point for clients. And once an agency knows what a publisher actually gets paid, it becomes much harder for anyone in the middle to tuck away a hidden fee. Every piece of that work brought in-house leaves a bit more of the programmatic margin with the holdco. 

“It’s logical for agencies to own the stack,” said O’Kane. “When you live and die by margin, paying sizeable opaque ad tech fees to a third party simply doesn’t add up. That’s why the row between The Trade Desk and Publicis became such a public spectacle: it exposed how much value sits in the tech layer. Going forward, ad tech fees will become a genuine USP, and agencies that can offer cleaner, leaner economics will be in a stronger position.  Economics drives this industry, and decisions on M&A and partnerships will be heavily predicated on it.”

Cleaner economics for agencies won’t necessarily mean better ones for publishers, though. Free start’s clients now have an ad sales partner owned by one of the companies on the side of the negotiating table, and they’ll want to see the new arrangement pay off before they take Stagwell’s word for it.

As one commercial exec at a global publisher put it to Digiday on condition of anonymity:  “I don’t see a generic publisher benefit, particularly for the largest publishers, but I can see the strategic rationale. It gives Stagwell direct access to some quality publisher environments and can offer its advertisers curated access to that audience data and inventory.”