"The old game in a new wrapper Principal-based buying is when agencies, trading desks or intermediaries purchase media inventory in bulk and then resell it to clients at a markup, acting as the principal rather than the agent. In other words, it's media arbitrage dressed up with better PowerPoint decks. This isn't new. Barter trading has been around since 1984, when Orion Capital and Active International helped agencies offload low-value assets for discounted TV and radio inventory."
"Having run investment for GroupM, I saw firsthand how these arrangements worked: handshake deals, bulk buys, inflated "fair market" rates. Agencies promised volume, secured discounts and pocketed the spread. That playbook hasn't disappeared; it's simply been updated for the programmatic era. When it works and when it doesn't Principal-based buying isn't inherently bad. When incentives are aligned, clients get more precision and speed than traditional agency models often allow:"
Principal-based buying means intermediaries buy media inventory in bulk and resell it to clients at a markup while acting as the principal rather than the agent. This practice is an updated form of long-running media arbitrage that dates back to barter trading in 1984. When structured with aligned incentives, principal models can deliver scale, specialized expertise, and improved ROI measurement for large or performance-driven advertisers. The primary risk arises from opaque markups and undisclosed spreads that incentivize intermediaries to prioritize margin over client performance, perpetuating a longstanding industry transparency problem.
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