In January 2026, the research group Forrester published a report called ‘The Truth about Principal Media’.
In it, Forrester claims that principal media is fast becoming a ‘business mainstay’ and could reach one third of total media billings in the near future.
The report makes the following statement: ‘The truth about principal media is that it’s a business necessity for agencies, advertisers, and publishers grappling with revenue and budget uncertainty.’
However, more recent publicly available evidence shows conclusively that advertisers do not consider principal media a ‘business necessity’.
In fact, many reject it, and those that do participate spend only modest amounts on it.
There are several good reasons for advertisers’ reluctance to adopt it, one of which is their concern over the inherent conflicts of interest in employing an agency that buys for you and sells to you at the same time, with limited clarity over the difference.
This paper analyses the truth of principal media based on public data that casts doubt over Forrester’s findings.
First, some definitions and descriptions of process, since there are many misleading messages regarding Principal Media in the market.
1. Definitions
‘Principal media’ refers to the practice whereby media agencies are directly responsible for paying media vendor invoices. This has been the case for many decades in most of the world, but only more recently in the United States, and then only alongside their traditional role as agents of the advertiser.
The main component of principal media is the packaging up of media inventory by media agencies to resell to their clients at an undisclosed mark-up.
The media inventory acquired under principal media trading is sometimes called ‘proprietary media’. However, the agencies do not pay for it themselves, don’t buy it in advance and do not own it in any legitimate sense.
2. Process
Principal Media trading supposedly allows agencies to claim that they are at risk when placing media buys acting as principal; in reality, they mitigate this risk, and there are virtually no examples in history where agencies have been left holding debt by advertisers defaulting on their obligations.
To receive the apparent benefits of principal media, advertisers have to ‘opt in’ to an agreement where they cannot know the margin their appointed agency makes on the spread between the price they will pay to the media vendor and the price they charge their clients.
In effect, the media agencies can set any media price they like to give the impression that principal media delivers a lower media rate than would otherwise have been paid, so any ostensible advantage is entirely within the control of the agencies, and there is no impartial proof.
In practice, some advertisers do not have to ‘opt in’ to principal media if their agency contract is deficient. If principal media is not excluded, they may find themselves using it by default.
The additional margin that media agencies earn by buying at one price and selling on to clients at a high rate is justified by them as rewarding them for the risk they run as principals to the media vendor contract.
This is based on the illusion of the agency being left to pay for the inventory if it is not used.
In practice, this reinforces clients’ fears that the media they are offered is what the agencies have to sell to them.
In order to sell principal media to their clients, the media agency groups negotiate media vendor deals using the combined volume of their clients’ advertising budgets.
The media agencies aim to persuade their clients to sign up to receive the apparent benefits before knowing how many other clients will do so, nor the proportion of their budget they will agree to allocate to principal media.
Consequently, the media inventory granted to agencies by media vendors at low or nil cost according to volume thresholds does not depend on the number of clients signing up for principal media, nor the amount of their spend. The volume targets cover all advertisers.
The agencies get the inventory anyway and can use it for their clients at a massive premium of their choosing by reselling to their clients.
If fewer clients than expected sign up, the agency makes even more money because they do not have to pass on any discounts to them, and if clients do sign up, they do not automatically get the supposed benefits.
There is a lot of fresh new evidence of how this process works in practice, as well as industry studies that provide insight into advertiser reluctance to participate.
This evidence provides overwhelming proof that some media agency groups do indeed find it a ‘business necessity’, as their business model disintegrates after a forty year bull run.
It is worth examining in detail what Forrester say in their report and how the new evidence contradicts its findings.
The main sources for the latest evidence are:
- The ANA study into principal media, published in March 2026, and an equivalent study published by ISBA, the UK advertiser trade association
- The court papers from the lawsuit in the Southern District of New York where Richard Foster, a long-standing senior executive of WPP, is suing his erstwhile employer for wrongful dismissal. These were published in stages across November 2025 and February 2026.
All three sources show that Principal Media has not been adopted at scale by advertisers.
They show that advertisers have legitimate concerns over its innate disadvantages, the benefits are low or non-existent, and that many advertisers have declined to use it.
The external evidence casts doubt on the Forrester analysis in a number of ways:
The advertiser perspective
Forrester describes what it sees as the current scenario in the market:
- Marketing budgets are under pressure due to economic factors, including geo-political shocks
- Agencies need to earn additional margins to maintain profitability
- Publishers need predictability of revenue
Marketing budgets have been subject to intense scrutiny over a long period of time and advertisers have always sought ways to make their advertising investments work harder.
Principal Media is the latest in a long line of media agency practices that aim to provide agencies with more revenue through the kind of media trading benefits exposed in the ANA media transparency study ten years ago.
This study led to a rift in trust between some advertisers and their agencies because many of the media trading practices were unknown by advertisers, and the latter have remained cautious ever since.
In fact, the recent ANA study into principal media shows that only 57% of the respondents had used it when the survey was conducted. This has increased over two years, but it is not a resounding majority.
The reported benefits of principal media, as listed in the Forrester report, are open to question, as evidenced by the more recent public evidence, to wit:
a) Additional discounts
Forrester says that advertisers like principal media because:
- They receive additional discounts on the media they buy
- Media pricing is less variable and can be predicted
- The media agencies take the risk of payment to the media vendors
- ‘Outcomes’ are often guaranteed: in other words, some kind of business result is underwritten
We can test these apparent benefits against the new publicly available data.
In reality, advertisers only receive supposed additional benefits for the proportion of their budget that is allocated to principal media.
According to the recent ANA study, 55% of advertisers who agree to principal media spend less than 10% of their budget on it, and 78% spend less than 25%.
On average, roughly half of advertisers commit 20% of their budget or less to it, so the principal media market is approximately 10% of the total.
Only the minority of budget is discounted, so most advertisers are better off by two percentage points, at best.
It’s not surprising, then, that only 23% of respondents consider it important to them, and 42% deem it ‘unimportant’.
This finding is matched by the UK study by ISBA.
Principal media is not a ‘business necessity’ for advertisers.
In order to achieve even meagre advantages, the ANA recommends twenty points that need to be included in client/agency contracts to provide governance guardrails.
These entail protracted negotiations, contract and governance inputs, audit time and cost. It is hardly surprising that advertisers find the juice not worth the squeeze.
Incidentally, the ANA’s recommended guardrails apply to all advertisers, even those who do not ‘opt in’ to principal media, in case circumstances change, misunderstandings occur or overseas offices choose to not know or disregard the contractual terms, as happens from time to time.
b) Predictable media pricing
It is not entirely accurate to say that media pricing is more predictable when only a minority of spend is included in principal media.
The total budget is only marginally less variable, if at all.
c) Mitigation of risk
The risk element is addressed above. There is no risk to the agencies, as they do not buy media in advance with their own cash, and do not commit to the purchase of media that may not be wanted.
Instead, they generally put in place sliding scale volume deals that are retrospectively reconciled, with thresholds of nil or low-cost media released. The threshold are usually based on prior history, and the agencies can manage this through the planning process.
d) Guaranteed ‘outcomes’
In this instance ‘outcomes’ generally means an action taken by someone reached by the advertising, such as a click.
This approach is often classified under terms such as a guaranteed ‘return on ad spend’, ‘clickthrough rate’ or a ‘cost-per’ classification for leads or sales; in reality, the contribution of media bought on a principal basis is impossible to identify when commingled with non-principal media, especially when the former is often a small minority.
The ANA study shows that advertisers are not signing up in droves and are only spending a modest minority of their budget on principal media.
The reasons are clear. Apart from meagre benefits and high governance requirements, 90% of ANA members in the study were concerned about the inherent conflict of interests — that agencies were bound to propose media channels or vehicles for which they have lucrative principal media deals, thus distorting media plans.
The ANA study is a very useful guide into the principal media market, but even more insight is provided by the Foster v WPP court papers, largely because they were not written for public consumption.
The court case between Richard Foster and WPP contends that Foster was dismissed for raising concerns about principal media profiteering by WPP, while WPP claims that his dismissal occurred because his division (Motion Content Group) was closed down.
(NB I am advising the Foster legal team as an expert consultant).
One such document is called ‘Project Claridges’, and it details the track-record of GroupM (now WPP Media) in selling in principal media to its clients.
The key information is that:
- Only one third of WPP’s top 10 largest clients agreed to ‘opt in’ to principal media trading.
- GroupM generated $1bn in revenue from principal media trading that accrued to its bottom line. This represented over half of WPP’s profit in 2023.
- GroupM clients that ‘opted in’ saw virtually no benefit from doing so, and the media inventory that should have been allocated to them on a discounted basis was not taken up by GroupM for its clients.
- Internal representatives of WPP’s legal and financial departments were concerned about the contractual legitimacy of principal media and imposed limits on it based on the risk that statutory auditors would classify it as excessive profit-taking and therefore subject to challenge.
The papers show that the ANA Media Transparency study of 2016 had alerted advertisers to the reality that some media agencies were making undisclosed revenues, and they were re-drafting contracts to reduce their exposure to such non-transparent practices.
Principal media emerged as an alternative as it provides the illusion of benefit to advertisers and media vendors, as well as the agencies.
GroupM doubled down on it but there were significant concerns within WPP over the use of principal media, not least caused by problems at the Chinese offices of GroupM, where senior executives had been arrested for practices that were similar in effect.
The Foster papers demonstrate that the largest and most expert clients of GroupM did not ‘opt in’ to principal media and those who did saw virtually no benefit, but they also expose other problems.
For example, the kind of media vendor deals that underpin WPP’s principal media trading use the combined volume of GroupM’s advertiser clients, even though only those who ‘opt in’ (the minority) see the supposed benefits.
Understandably, advertisers who did not ‘opt in’ because of its problems disapproved of the use of their money to provide additional revenue for GroupM, especially as it meant that they were theoretically subsidising those who ‘opted in’.
The Foster papers show that WPP made vast revenues from principal media trading, but this wasn’t enough to prevent GroupM’s profits from declining by 5.9% in 2025.
Principal media trading was indeed a ‘business necessity’ for WPP but not for its clients, and it is not compensating for revenue losses elsewhere.
Although the public papers do not go into as much depth about media vendors as they do for the buy-side, there are some clues in the ANA study and the Foster papers that suggest platforms and media owners are not necessarily keen on principal media.
It is interesting that the Forrester report talks about ‘publishers’ throughout, and there is no real refence to broadcasters, yet the ANA study shows that the majority of principal media trading (74%) occurs within TV.
The big agency groups still have the lion’s share of market in TV, so they are able to use their leverage to negotiate deals across their client volumes. This is not the case in some other media and especially in the high growth channels, such as social media.
The TV companies are more vulnerable to agency pressure as their revenues are in decline, and they’re more reliant on deals with the big agency groups.
Forrester is right to highlight this, but only partly right to say that principal media revenue is welcome to provide revenue certainty.
In reality, the media vendors who are obliged to offer principal media deals do so reluctantly, as it cedes control over their inventory to the agencies, which can then set the actual price paid by advertisers.
Principal media trading also often involves media vendors granting media inventory free-of-charge to agencies, which can then mark it up as much as they choose. This is not in the media vendors’ longer-term interests.
Conversely, the media channels and vendors that are growing the most do not need to offer principal media and have a much wider base of advertisers, many of which do not employ agencies.
The public evidence suggests that principal media is not a ‘business necessity’ for anyone other than the agencies.
It should also be said that advertisers would be better served by expecting their selected agency partners to perform to the maximum without having to agree to hidden fees and without having to add twenty governance safeguards into their dealings with those partners.
The supposed advantages of principal media should be available to advertisers without it. Advertisers should pay their chosen partners well to perform for them, but also to avoid the kind of governance and trust issues that principal media cannot avoid.
The Forrester report is a welcome contribution to the debate over principal media, but it can be argued that the latest data paints a different picture. It is not a business mainstream nor a business necessity for anyone other than agencies.