Another person who said that they have been interviewed by the FTC said questions included whether principal media buying results in any restriction of choice in the agency pitch process, whether the money agencies are able to bargain away from media companies means more journalists get fired and less programming for minorities or kids, and ultimately how this might affect clients.
Growing scrutiny of principal media
The FTC’s questions come as principal media trading has become a hotter topic in the U.S. over the past year. That includes controversy over the Amazon media review and other retail media account reviews, in which agencies allegedly have agreed to increase the amount of the account holders’ retail media they sell to their other clients in order to win the retailers’ media business.
The biggest leverage impact from a bigger agency holding company would appear to be on media companies, but creating a bigger agency holding company also could have substantial effects downstream.
“There are huge downstream consequences,” said a lawyer who works in the ad industry and spoke on the condition of anonymity. While an Omnicom-IPG merger might not have much effect on Publicis Groupe or WPP, it could squeeze business of smaller players, the lawyer said, adding that it might advantage bigger marketers and publishers to the detriment of smaller ones.
One area of exclusive offers linked to principal buying is early access to new tech tools, such as AI capabilities, bundled with media among tech companies that sell both, according to people familiar with the matter. Conceivably, a bigger agency would have more leverage to get such deals, which in turn might increase leverage with clients who otherwise would resist opting into principal media deals, the lawyer said.
Principal deals, and the free or reduced cost inventory or other incentives that help fuel them, are mainly limited to the biggest agency holding companies, the lawyer said. “The big get bigger and the small get screwed. It’s harder for the large agencies to serve smaller clients. So it’s not just that the smaller agencies lose and the small publishers lose. The small clients lose too because they can’t get any of that.”
Contributing: Lindsay Rittenhouse