Principal media is never far from trade press headlines but yesterday, Kristiaan Kroon, the soon-to-be CEO of Omnicom Media Group, said that “there’s absolutely no reason why” principal inventory can be more opaque than traditional media buying. Naturally, B&T’s interest was piqued.
Yesterday, at Mutinex’s Marketers and Money ’25 event, the topic came up when the founder and CEO of Howatson+Company, Chris Howatson said: “We talk about transparency and ability to move things, but the whole industry is shifting heavily and hard to principal.”
Howatson was joined by Kroon, Mike Worden, partner and chief media officer of -lution and Mutinex’s John Sintras to discuss the reinvention of media.
“People are opting for that model [principal buying] and essentially investing in a trading model where there is commitments on that inventory, and can you move it with pace and velocity,” continued Howatson.
This lead to Worden suggesting “you could argue that principal media wouldn’t have gotten to the position it has, had people been fairly remunerated in the first place, and had holding companies not had to find creative ways to generate new revenues.”
Principal media is the practice where media is bought in bulk from media owners at lower rates before typically being re-sold to clients, with the media agency able to grow its margin.
It is deemed controversial and unethical—but not illegal—because it changes the dynamic between agencies and clients. The agency is no longer playing the agent role, rather it is purchasing ad slots on its own accord, rather than being instructed.
The practice that many of the large holding groups have taken up of late, has become increasingly popular as it allows agencies to lift margins, something notoriously hard to do.
Later in the discussion Kroon addressed the topic head-on.
“When we think about principal inventory, the model Omnicom has, you see everything down to the spot level. So from a Mutinex perspective, or from any other measurement product perspective, our model, we don’t actually buy inventory. I don’t know if others do. I think it would be a very risky thing to do,” he said.
“Ultimately, it comes down to, can you help the customer make the purchase? If they’re comfortable, you can explain how you manage that, then you’re in good spot.”
However fellow panellist Howatson had a different perspective. “One of the scariest things that is happening, are a couple of the holding companies, is that the creative is now being done for free because of the principal media deal on that client. And that’s insane.”
Kroon concluded the conversation by stating that bundled media is a bigger problem for the industry right now, and that his holdco, at least, does not dabble in it.
“Bundled media, I would suggest, is a bigger problem for customers in the medium marketplace today than any other product, because it doesn’t allow you to understand where your performance was. It doesn’t allow you to optimise that in the following month,” he said.
