Principal Media - What it is and why it matters

Let’s start with the basics. There are only two ways an agency can buy media for a client:

1. The Agent Model

This is the model most marketers assume they are getting.

• The agency buys media on behalf of the client.

• The media is bought in the client’s name.

• The agency earns a transparent fee or commission.

• The client sees the cost and can audit everything.

• The agency acts as an adviser whose incentives are aligned with the advertiser.

This is the clean and transparent approach.

Then you have the second way that an agency can buy media for a client:

2. The Principal Model

This works very differently.

Here, the agency (or a related trading entity within the agency) buys media for itself first, often in bulk. It holds this media as inventory and then resells it to clients at a price it sets. The margin between what the agency originally paid and what the client pays is not disclosed.

In this model, the agency is no longer acting purely as an adviser.
It has become a seller.

This doesn’t make principal media illegal or unethical, but it does fundamentally shift incentives and transparency.

A Simple Analogy - Bread, Not Media

To make the difference relatable, picture this scenario.

You ask a friend to buy you a loaf of bread.

In the agent model:

They go to the shop, choose the best loaf based on what you asked for, bring it back, show you the receipt, and charge you exactly what it cost. They acted entirely in your interests.

In the principal model:

That same friend has already bought 500 loaves of a particular type of bread earlier in the week at a bulk price. When you ask for bread, they offer you one of the loaves they pre-bought. They set the price. They do not show you the receipt. And they are motivated to sell the bread they already have, whether or not it is the best bread for your needs.

The bread might be perfectly good.
But the decision is no longer purely about your preferences.
It is now shaped by what your friend needs to shift.

This is the essence of principal media.

How the industry got to this point

To understand why principal media has become widespread, it helps to look at how the advertising supply chain has changed.

Twenty years ago, the ecosystem was relatively simple. Today it includes:

• media agencies

• data platforms

• programmatic technologies

• verification partners

• inventory suppliers

• measurement tools

• ad tech intermediaries

With every new link in the chain comes another business that needs funding. And all of it ultimately comes from the advertiser’s budget.

At the same time:

• agencies face constant pressure to keep fees low

• procurement teams demand greater efficiency

• agencies are expected to deliver more services at lower cost

• pitches reward unrealistic rate promises

• infrastructure costs continue to rise

Principal media evolved as a mechanism to keep agencies financially viable in a highly competitive market. It generates revenue not from hours worked, but from the margin on media itself.

It is, in other words, a business model solution to an industry-wide commercial challenge.

Why agencies use Principal Media

Agency groups rarely hide the fact that principal media is a significant revenue stream. It helps them:

1. Offset low or subsidised fees

Many pitches are won with fee levels that are below cost. Principal media is one way to make up the difference.

2. Create predictable profit

Reselling inventory produces a more reliable margin than time-based fees.

3. Build proprietary 'products'

These can be branded as premium placements, value bundles or exclusive deals and often include pre-bought inventory.

4. Maximise trading power

Buying in bulk gives agency's stronger negotiating leverage with media owners, enabling bigger discounts that can be resold at more attractive margins.

From a commercial perspective, principal media makes sense.
From a client perspective, it introduces risks that demand careful management.

The risks for marketers

Principal media is not inherently harmful. But unless it is governed with absolute clarity, it can easily undermine transparency, distort planning and limit a marketer’s control over their own budget.

Here are the key areas to understand.

1. Loss of transparency

With principal media:

• You cannot see the original cost.

• You cannot benchmark the price you are paying.

• You may not know whether it is genuinely good value.

• You often cannot audit the full transaction.

This means even the most diligent marketer may be buying media without knowing the true economics behind it.

2. Conflicts of interest

In the agent model, the agency’s only incentive is to maximise the client’s outcome.

In the principal model, there is an additional incentive:
sell the inventory the agency holds.

This does not mean planners deliberately make poor decisions. But it does mean they operate within a structural tension - one that can subtly shape recommendations.

3. Supply-Driven Planning

When an agency owns media, planning can drift away from being audience-first and instead become inventory-first.

This may lead to:

• Plans weighted towards channels with internal margin

• A preference for specific publishers

• Prioritisation of products the agency needs to sell

• Reliance on bundles, packages or proprietary networks

Again, the media itself may be high quality. But the path that led to it may not be neutral.

4. Reduced auditability

Because principal media involves buying and reselling, the original transaction often sits outside standard audit rights.

This creates blind spots in:

• Cost verification

• Delivery scrutiny

• Value assessment

• Performance attribution

Marketers cannot validate the true value of what they bought.

5. Complexity in governance

Even when clients include strict contractual conditions around principal media, managing it day-to-day is challenging.

Across different markets:

• standards differ

• local practices vary

• compliance can be inconsistent

• reporting may not be uniform

The larger the organisation, the harder it is to maintain visibility.

How markets can manage Principal Media safely

The solution is not to reject principal media outright.
Some advertisers may choose to use it for reasons of cost efficiency or simplicity.

What matters is governance.

1. Ask the right questions

Marketers should be able to ask and receive clear answers to the following:

• When are you acting as principal, and when as agent?

• How is this inventory sourced?

• What are we paying for and why?

• What parts of the transaction can we audit?

• Is this recommendation audience-led or commercially driven?

A good agency welcomes these questions.

2. Insist on channel-neutral planning

Plans should always begin with:

• Audience needs

• Behavioural insight

• Campaign objectives

• Measurement frameworks

If planning is built around pre-bought inventory, it is not strategic planning it is basically stock allocation.

3. Understand proprietary products

Some are genuinely innovative.
Some are simply bundles rebranded as premium solutions.

Know the difference.

4. Be explicit in your contracts

If principal media is allowed, marketers should set out:

• Where it is allowed

• How it must be declared

• What reporting is required

• What rights they retain

• How conflicts must be managed

Clarity is important.

Why Hello Starling will never engage in Principal Media

At Hello Starling, our position is this:

We have never engaged in principal media and we will never engage in principal media.

We are an agent-only media planning and buying agency. Everything we plan and buy is purchased in our clients’ names.

We believe:

• Planning should be audience-first, not inventory-first

• Incentives should be aligned with client outcomes

• Transparency is non-negotiable

• Media should be chosen for effectiveness

Principal media conflicts with these principles. And for that reason, it has no place in our agency.

When we recommend a channel, format or platform, it is because we believe it will deliver results, not because we are holding inventory. 

Clients should never have to wonder: “Is this media being recommended because it’s best for us, or because the agency needs to sell it?”

With Hello Starling, the answer is always the same: it is being recommended because it is right for your audience and your brief.

A final word

Principal media isn’t a scandal or a conspiracy. It’s a commercial structure that has grown within the industry in response to economic pressure, consolidation and complexity. It is neither inherently good nor inherently bad but it is powerful, and you need to understand how it influences the planning of your media budget.

Whether you choose to use principal media, avoid it entirely, or limit its use in certain channels, the key is clarity. Know how your agency buys media. Know the incentives at play. Know where transparency begins and ends.

At Hello Starling, our promise is simple:

We will always act as your agent - never as a principal. We will always buy media in your name.

Because modern media planning and buying isn’t just about reach or impressions; it’s about trust. And trust begins with knowing exactly how your money is being spent.