Principal media, the practice of reselling media inventory at an undisclosed margin, is controversial. Critics claim that conflicts of interest nullify the agency/advertiser partnership and raise concerns about the quality and strategic alignment of media impressions. On the other hand, evangelists tout cost reductions that business leaders can’t ignore. The truth about principal media is that it’s a business necessity for agencies, advertisers, and publishers grappling with revenue and budget uncertainty.
What Is Principal Media?
Forrester defines principal media as a media buying practice in which agencies (or their affiliates) purchase advertising inventory at an undisclosed discount and resell the inventory to advertisers with a price markup that’s below standard publisher rates and that includes additional value. Almost universally, industry leaders cite deep discounts from principal deals. Additionally, the agency takes on most of the risk. In a volatile business environment where marketing budgets are susceptible to uncertainties — such as trade policies, inflation, and activist shareholders — principal media is a useful tool.
Media Arbitrage Is New Again
Principal media traces its origins to the early days of advertising, when the N. W. Ayer and J. Walter Thompson agencies purchased and resold media to advertisers, offering additional services such as advertising copy, design, and layout as part of the cost. The practice of media arbitrage fell out of favor in 2015 with the publication of the Association of National Advertisers’ K2 report, which detailed agencies’ practices of not disclosing publisher rebates to advertisers. A decade later, principal media has made a comeback. A 2024 study from the Association of National Advertisers found that almost half of its marketer members reported using principal media in the preceding 12 months, and Forrester’s data shows that eight out of 10 marketers are interested in the advantages it brings.
Why Now?
The popularity of principal media stems from a business and marketing industry focused on cost efficiency. Marketers and heads of media consistently contend with budget scrutiny — over half tell us that they expect tighter budgets in 2026. In combination with shorter tenure compared to other executives, CMOs feel a burning need to show efficiencies in the form of lower CPMs and agency fees. Consequently, agencies must contend with ever-decreasing margins: Analysis of Bloomberg data reveals the advertising agency sector to be the second-lowest margin compared to nearly 30 other sectors. In turn, agencies use their buying power to lock in rebates from publishers and media owners based on upfront bulk buying. Principal media thrives on marketers’ need for discounts, agencies’ need for margin, and publishers’ need for revenue amid shifting consumer behavior.
Love It Or Hate It, Principal Media Is Now A Business Mainstay
Florian Adamski, CEO of Omnicom Media Group, recently suggested that clients are the only ones not complaining about principal media. This could be because there are clear benefits, such as guaranteeing lower costs well below standard rate cards, offloading inventory risks to agencies (which affords flexibility to get out of media commitments), and securing predictability by locking in costs and shielding advertisers from price spikes in scatter TV markets or auction-based digital media. Many marketers find that guarantees, risk mitigation, and predictability outweigh full disclosure of media costs. This, combined with interest from social platforms like Meta, leads us to predict that principal media will grow to one-third of total media billings in 2026, suggesting that it will become a rule rather than an exception.
If you’re a Forrester client wanting to better understand principal media practices, the trade-offs and advantages involved, and recommendations for when and when not to use principal media, read our latest report, Make Principal Media Principled Media, or book an inquiry or guidance session with Jay Pattisall, Kelsey Chickering, or Evelyn Mitchell-Wolf.
