What Are They Hiding?
- Bob Hoffman
- Apr 6
- 2 min read
Updated: 5 days ago
Adtech International essentially owns the advertising industry. Agencies have become little more than the sales department for Facebook, TikTok, Google,YouTube and the rest of the adtech rat pack.
Since the agencies are doing the selling, they're entitled to a cut of the vig, right? That's where "principal buying" comes in. "Principal buying" is the racket in which agencies buy
bulk media for 1 and resell it to their clients for 2.
The grift goes like this: 'We can buy media at bulk rates and resell it to you, Ms. CMO, at a cost below what you would have to pay if we bought it directly for you.'
Like all cons, it sounds great. Except for one little thing. The agencies will not reveal what they actually pay for the stuff. This raises a very simple question about ethical business: Why would people hide things if they have nothing to hide?
If I were a cynical bastard, I'd think that maybe there's a little wink-wink, nudge-nudge going on between the agencies and the platforms. Who's really buyin' and who's really sellin'?
Confidential conversations with some agency media buyers alerted me to the fact that there are times when they are given 'target' spending amounts by their bosses on certain platforms. In other words, their bosses are telling them, "We bought this shit, now get rid of it."
'Principal media buying' is fancy talk for sidestepping another principle of ethical business: You don't work both sides of the street. This is in direct conflict with the traditional nature of agency relationships. The agent is supposed to be a representative of the client, buying for the client on the most favorable terms, not buying for the client on terms that ultimately favor the agent. But there are so many con games, frauds, and misdirections that have been normalized in the online media world, we have lost our capacity for outrage.
Let's end with a quote via Digiday from a client surveyed by the ANA, “I don’t know if my agency is recommending principal media because it’s the best media for me, or the best media for them.” I'll give you three guesses.
