At the recent ANA Media Conference in Orlando, a key topic of discussion was principal media. This practice goes by many names, including inventory media, or opt-in media. At Cortex, we categorize it as non-transparent media buying. This practice, in which agencies or intermediaries purchase media inventory as principals (rather than acting as agents on behalf of advertisers), has sparked ongoing debate about transparency, control, and accountability.

The ANA published a whitepaper on principal media, which recently won the WFA’s President’s Award recently. -with Cortex as a key contributor.

In a principal model, the agency acquires media at one price and then resells it to the advertiser, often without full disclosure of costs, margins, or rebates. While this approach can offer efficiencies and potentially better pricing, it also raises concerns about whether advertisers are getting fair value for their media investments. In most cases, the inventory costs for the media to the agency will not be revealed – that’s the “opt-in” piece. Advertisers should request granular transparency on what agencies charge for the media units they are reselling, as agencies effectively become media vendors in this model. That pricing is auditable.

In most cases, agencies will not share what they paid for the inventory they now own (and are reselling to you). It is important to understand if your company’s leadership is comfortable with this lack of transparency.

Cortex CEO Manuel Reyes raises key questions about this model in the ANA whitepaper: “For this to work, it must be a win-win for vendors and agencies. If both make more money, who pays? Also, what is the effect of inventory buying on overall market pricing? Is this model partly responsible for some of the media inflation we have experienced recently?” Keep in mind that in recent years, this is now one of the fundamental ways in which agencies are making their money, so advertisers need to be aware. Any advertiser engaging in principal media needs to go into it with their eyes wide open and remember that principal media exists across many different channels.

There are a few recommendations for advertisers to consider:

1. Transparency & Cost Breakdown – Without visibility into actual media costs, advertisers may struggle to assess the true value of their ad spend. It’s crucial to demand detailed reporting on costs, fees, and any arbitrage involved.
2. Contractual Clarity – Contracts should specify whether an agency is acting as a principal or an agent, and ensure that your contract specifically addresses principal media. Advertisers should ensure they have the right to audit media transactions and demand full disclosure, but in many cases, principal media buying does not allow for auditing.  
3. Performance vs. Incentives – Principal media buying can introduce potential conflicts of interest, where agencies might prioritize higher-margin media over what’s truly best for the brand’s goals. Have the agency provide a business case for your company as to why they believe that principal media is in your best interest.  Is the media agency pushing this because it is REALLY in the advertiser’s best interest? Or their own (because they make more money from it)?
4. Approvals – Ensure your company has clear approval processes in place for principal media, if you are choosing to engage in this practice. It should ideally involve others beyond marketing and media – e.g., representatives from procurement and legal.

With media dollars under greater scrutiny than ever, the ANA’s focus on this issue underscores the need for brands to push for greater visibility into where and how their budgets are being allocated. As the landscape evolves, advertisers who prioritize transparency will be better positioned to optimize their media investments and drive true business impact. We’re admittedly not fans of non-transparent media, but we recognize that it is happening frequently in our industry. Want to protect your media investment? Let’s talk best practices – reach out to us today.