Media Transparency After The Trade Desk Audits

The ID Comms Breakdown

The current Trade Desk audits and agency disputes are really a fight over who controls margin and media transparency, not a narrow tech spat. CMOs and procurement leaders need to quantify their exposure, fix contracts, and audit the full programmatic supply chain so they stop unknowingly funding hidden economics in media.

Tom Denford and David Indo use this #MediaSnack episode to unpack why the Publicis vs The Trade Desk dispute, and now Omnicom's audit activity, matter far more than a trade-press feud. As a marketer, this is your money, your risk and, ultimately, your reputation on the line.

They outline a simple but powerful model: get good at media by improving three things in parallel. First, your internal media capabilities. Second, your external partners and platforms. Third, the way every paid media dollar flows through that system. If you can raise the bar in those three areas, you will outperform your category.

Crucially, they remind advertisers that opacity is a choice. It persists wherever audits, contract governance and informed questions are missing. As soon as serious scrutiny appears, 'switches get flicked' in the background, fees fall and suddenly everyone discovers new transparency.

Whats going on?

At the surface level, Publicis audited The Trade Desk, reported serious fee discrepancies and advised clients not to use the platform. Omnicom then commissioned its own audit. According to recent reporting, Omnicom's review has so far found no issues, while Publicis continues to allege hidden or misapplied fees on certain tools and services.

Industry analysis frames this as part of a broader reset, where long-standing programmatic intermediaries are being pushed toward greater visibility on who takes what margin along the chain. Commentators note that agencies, DSPs and platforms have all benefited from layered, opaque economics in the past, and that AI is now squeezing those inefficiencies.

Inside this episode, Tom and David focus less on the corporate drama and more on what it reveals: decades-old tensions about who agencies really work for when they are both advisor and trader, and how much of your media investment quietly supports undisclosed margin.

What are the implications?

The most important implication is simple. This is not a contained argument between a few large companies. It is a signal that the economics of programmatic media are under serious pressure and that advertisers who do not audit will likely subsidise those who do.

Tom explains that ID Comms already audits billions of dollars in biddable media every year, including large volumes running through The Trade Desk. Where advertisers commit to robust auditing, they routinely find significant fee disparities and undocumented practices. Where they do not, the value quietly flows away.

Another implication sits around principal-based media buying, where agencies buy or pre-commit to inventory as a principal, then resell it to clients. An ANA study cited in the episode shows that more than half of surveyed advertisers now use some form of principal media, yet only around 60 percent say their contracts even mention it. That gap between practice and governance is precisely where risk accumulates.

How should marketers be thinking?

David Indo's guidance in the episode is intentionally practical. First, know your exposure. Quantify what has run through The Trade Desk, and more broadly through each DSP, over the last 12 to 18 months. Different client profiles exhibit different risk characteristics, and you do not know which camp you are in until you look.

Second, separate the technical question of platform performance from the governance question of who sets fees, who can arbitrage and who gets audited. Third, recognise that principal-based buying is not going away. You need a point of view and a clear cap, not a vague sense that 'someone is on top of it.'

Finally, internalise the golden rule Tom repeats: you hold the gold, so you must write the rules. Agencies and DSPs will continue to innovate their business models. The only durable safeguard is a disciplined client-side capability that audits, questions and negotiates from a position of confidence.

What this agency vs DSP feud means for your media

CMOs and procurement leaders should treat the Publicis vs The Trade Desk fallout, Omnicom's audit and the surge in principal-based buying as a stress test of their own programmatic governance. The question is not who wins the PR war, but whether your organization is structurally protected, whatever the outcome.

The first lesson is that transparency stories are rarely just about compliance. As several industry executives have observed, what gets dressed up as a transparency debate is usually a battle over economics and who captures the margin in the system. That is exactly what we see here. Agencies face margin pressure as clients squeeze fees and push for outcome-based models, while DSPs push closer to advertisers and defend their own economics.

A second lesson comes from principal media. External analysis has revealed that one major holding company generated more than 1 billion dollars in a single year from principal-based revenue, while another is estimated to be earning billions in similar streams. Yet, as Tom and David highlight, ANA data suggests that 75 percent of advertisers who knowingly use principal media say it accounts for 25 percent or less of their spend.

If the big profit pools sit in principal media but the largest, most sophisticated advertisers are using it sparingly, logic suggests the margins are coming disproportionately from mid-sized advertisers who lack awareness, audit rigour or contract clarity. This is exactly the segment that cannot afford to give away margin.

Third, the episode points to a changing competitive set. Consultancies like Accenture Song are building media capabilities while explicitly rejecting principal trading. By stating that they will not buy media and resell it, they are positioning themselves as fully transparent alternatives with different incentive structures. Whether or not a marketer ever works with them, their stance changes the negotiating landscape.

For global Heads of Media, this means your choice is no longer between slightly different flavours of the same model. You can now choose between agencies that trade on their own account and partners that refuse to do so. That choice has profound implications for how you define conflicts of interest, fee structures and performance accountability.

Finally, there is a reputational dimension. When trade-press stories name specific platforms, holding companies and audit disputes, internal stakeholders quickly ask the obvious question: are we exposed here? The marketers who show up with a clear audit trail, quantified exposure and a plan for remediation will look like leaders. Those who are surprised by the question will look like passengers.

How to audit, govern and protect your media margin

To move from concern to control, Tom and David outline a practical playbook any ambitious advertiser can follow. It starts with data, flows into contracts, and ends with a more resilient operating model for media.

Step 1: Quantify exposure. Work with your teams and partners to understand exactly how much has run through each DSP, especially The Trade Desk, over the last 12 to 18 months. Capture media spend, technology fees and any additional charges. Use that as the baseline for prioritising audits.

Step 2: Audit deeply and repeatedly. A recurring theme in the episode is that you are always better off after an audit than before. Even simply signalling that you intend to audit can reset behaviour. Allocate a small fraction of your media budget to independent audit and verification. For most advertisers, it will be well under 1 percent of spend, yet it often surfaces savings and protections worth many times that.

Step 3: Fix the contracts. David urges advertisers to bring contracts in-house wherever possible. That does not mean you in-house buying. It means you, not your agency, hold the contracts with key platforms and suppliers. Ensure contracts explicitly define what principal-based buying is, set a clear cap on its use, mandate opt-ins and spell out audit rights over every feed in the supply chain.

Step 4: Extend scrutiny beyond DSPs. The DSP is one stop in a complex supply chain of SSPs, exchanges, resellers and third-party tech. A serious governance programme tracks where every dollar goes and assesses the value of each hop. That may involve supply-path optimisation, direct publisher relationships or curated marketplaces, but the principle is the same: remove needless layers and reclaim value.

Step 5: Build internal capability and playbooks. Media directors today have vastly more influence and complexity to manage than a decade ago. The marketers who thrive are those who invest in internal education, define non-negotiables for transparency and develop clear response plans for issues like the Trade Desk dispute. Tom and David position ID Comms as a coach in this process, helping brands turn uncertain headlines into actionable steps.

Throughout, the goal is not drama, it is discipline. You want a media operation that can handle disputes, audits and market shocks without scrambling. That means clear data, tight contracts, sensible use of principal media and partners whose incentives are aligned with yours.

If you want support building that level of resilience, get in touch to confidentially discuss your gameplan and options to protect your competitive advantage in media.

Frequently Asked Questions

Q1. Is the Publicis vs The Trade Desk dispute only relevant if we use those two companies?
No. It is a visible example of deeper tensions around fees, audit rights and data access in programmatic. Even if you work with different partners, the same structural issues likely exist in your supply chain.

Q2. Does Omnicom's clean audit of The Trade Desk mean there is no problem?
It means Omnicom's review, conducted under its own terms, did not find issues. It does not invalidate Publicis findings, nor does it answer questions for your specific campaigns, which may be structured very differently.

Q3. Should we pause all spend through The Trade Desk until this is resolved?
Not automatically. The smarter approach is to quantify your exposure, identify the types of fees applied and prioritise an audit. Use the findings to decide whether to renegotiate, reconfigure or reallocate spend.

Q4. What exactly is principal-based media buying?
It is when an agency buys or commits to inventory as a principal, then resells that media to you. The agency is effectively a trader, not just an agent, which can misalign incentives if governance, caps and audit rights are weak.

Q5. Is principal media always bad for advertisers?
Not necessarily. It can provide access or pricing advantages in some cases. The risk comes when it is undisclosed, uncapped or unaudited. You want clear rules, performance benchmarks and transparency on how prices and margins are set.

Q6. How much of our budget should we allocate to media auditing?
Most large advertisers spend well under 1 percent of total media investment on auditing. The return typically comes from recovered value, reduced waste and stronger negotiating leverage, which together can unlock several percentage points of improvement.

Q7. Do we need separate contracts with DSPs like The Trade Desk?
Where possible, yes. Having a direct contract gives you clearer rights over data, audit and fee structures. You can still have your agency operate the platform on your behalf, but you retain control over the commercial terms.

Q8. How do we know if we are overexposed to principal media?
Start by asking your agencies to quantify the proportion of your spend that runs through principal or proprietary inventory. Cross-check that against your contracts and audit findings. If usage is high and governance is thin, you are overexposed.

Q9. What should we tell internal stakeholders who are worried by the headlines?
Share a simple plan: you are quantifying exposure, commissioning an independent audit, reviewing contracts and defining a clear policy on principal media. That turns a worrying headline into a structured risk-management response.

Q10. How can ID Comms help us in practice?
As Tom Denford and David Indo outline, ID Comms acts as a coach for ambitious advertisers. In practical terms, that means conducting audits across DSPs, reviewing and redesigning contracts, benchmarking fees and helping you build internal media governance that protects your long-term competitive advantage.

Episode Transcript

Hello, I'm Tom Denford in New York. And I'm David Indo from London. Welcome to Media Snack Live. It's our weekly roundup of all the important news, and stories, and trends you need to know about the global media and marketing industry. In every show we ask, what is going on? What are the implications for advertisers? And what should marketers be thinking about next? Thanks for joining us. Let's get into this week's show.

Hey, welcome back to Media Snack. Hello, mate. How you doing? I'm good, thank you. Good morning to you. You well? Good. Very, very good. Yes.

Uh, we're gonna get straight on with the show. Somebody said to me, "Stop babbling around at the beginning of the show", so I'm just gonna go and do that. Right.

Uh, welcome back to Media Snack. As a reminder, before we get into the actual stories, which is a continuation of just, um, uh, understanding of the dispute between agencies and DSPs. It's now getting bigger, something... And we'll just tell you what you need to know, and the decisions that you're probably gonna have to make as a marketer, just to be aware of that.

We're then gonna talk about some new insight on principle-based buying, um, from a industry report. W- again, this is a briefing. You need to know these things. Um, and then we've got some kind of carve-out stories, which is some, there's some really interesting little stuff going around in the media industry, as always. But we're gonna give you the things that we think are important.

Just by way of really brief kind of recap, last week we talked about the fallout between Publicis and The Trade Desk.

Uh, Publicis had done an audit on The Trade Desk, and they'd fi- found- Yeah ... two or three fairly major red flags with regards- Yeah ... to discrepancies. Um, and Publicis, as a consequence of this audit, had recommended to all of their clients not to use The Trade Desk. Okay? Mm.

So that's a major holding company encouraging their clients not to go through one DSP. This week, we find out that Omnicom- Mm-hmm ... soon to be the biggest holding company in the world, uh, ha- or have not dissuaded their clients yet, but they are also conducting an audit. They've got one of the Big Four, uh, auditing companies to come and audit The Trade Desk. Hmm.

So you've got the two major holding companies not, or having major doubts about getting their clients to perhaps use The Trade Desk. Yeah. And the backdrop to that was, earlier this year, WPP and Dentsu, so the other two major holding companies within this global marketing ecosystem that we operate in, um, withdrew their support of Open Path- Yeah ... which was, um, a Trade Desk, uh, uh, platform that allowed clients to interact directly with publishers. Mm-hmm.

So you've got The Trade Desk now being audited by Omnicom, having been audited by Publicis, and Publicis telling their clients not to use them, and WPP and Dentsu not touching Open Path. Yeah. And that's a, sort of, kind of a major, major, major issue. Mm.

Yeah. The, the, the... I' know you're gonna talk about implications in a second- Yeah ... but the good news, is that it continues- Mm ... to shine a light on? transparency within, especially the digital ecosystem, and it is long, long, long overdue. Yeah. Yeah.

Uh, good. Okay. I forgot to put your little banner up. Let' me do that. What's going on? Okay, let's go to the, what, what the implications are.

Uh, so what are the implications? I mean, this is, this is, as, as a few of us have observed over the last couple of weeks, there's obviously this, it looks like a feud between agency and DSP- Yeah ... over something. Right? And then, and it might be easy if you're a marketer to think, "Oh, you know, it's just a, just a bit of trade press coverage of a battle between, you know, people in the supply chain. They're just jostling for position. We'll let, let them get on with it." But what it really is, it's a battle over the margins that they're potent- potentially making on your money.

Um, that's really what's at the heart of this. So there's a lot at stake in some ways here, because this could be, this could be fairly fatal for Trade Desk if this continues. Yeah.

If there, if there's a wholesale kind of mutiny against using Trade Desk, and a- and agencies are actively ad- advising their clients to avoid it and go a different route, um, then there's an impli- there's obviously a massive implication for Trade Desk.

Um, the, the other big thing is that, uh, we audit Trade Desk all the time. Okay? So within our practice, I mentioned at the beginning, this is, we, you know, we track all paid media, that includes all biddable media, and lots of our clients use Trade Desk. We, we audit billions of dollars each year, and a big chunk of that is on Trade Desk.

Um, and we get to see this. We get to see these disparities in fees. But you only get to see it if you audit it. Yeah. That's the thing. So if you, if you haven't audited that, then have a look at it, because then you're going to see if there's an exposure. There are certain characteristics that we see that mean that some clients are maybe more likely to find an exposure there than others. Yeah.

And we'll tell you one absolute guaranteed thing, is that if you audit anything in the media supply chain, you will be in a better position than when you, before you audited, just for the, the sheer fact of auditing. Even just announcing that you're auditing- Yeah ... is going to suddenly give you lots of in, uh, you know, added value or im- or, or better transparency, lower fees, whatever it is. Yeah.

Um, because anyone who is maybe taking advantage of advertisers who are not auditing, which maybe this does happen, let's see. Yeah. We seem to know that that does happen a fair bit.

Uh-Then as soon as you announce an audit, then a lot of this, this- as somebody said to me the other day, the switches get flicked, and that's basically what's going on in the background. Yeah. Switches get flicked and you suddenly get a, a bit more transparency and fees come down, and you get to s- to see a bit more what's going on.

So, you know, it is prompting more advertisers to audit. And m- as more advertisers audit, that creates margin pressure on these DSPs and on the agencies, is what we found over having audited agencies for 15 years. The more we audit, the pressure becomes margin pressure on agencies- Yeah ... which makes them have to figure out how. to make money. Yeah. Okay? Absolutely. It's all a cyclical thing.

But it- what they sh- what you shouldn't be doing? as an advertiser, obviously, is funding some un-transparent margin. Mm.

Um, so this is not just a localized dispute. If you're an a- if you're an advertiser, whether you're marketing or procurement, um, this is a story, as we said last week, you. need to lean into because it's really important.

Um, I will, I'll make a couple of distinctions. One is that this generally is going to affect more of the holding company, larger kind of giant agencies, David, that you, you. mentioned. And of course, there are only a handful of those, and there are really a small proportion of those giant agencies that. are really dedicated to principle-based buying, which we're gonna come and talk on in a minute, and that they really want their margin growth to be from principle-based buying. Mm.

There's plenty of agencies out there that offer a fully disclosed service. Again, we're gonna talk about one of those as well in a minute.

Um, CEO of one of those, um, a, a guy called Kamran Asghar, who's the CEO of Cross Media, um, who we know well.

Um, and Cross Media hold themselves up as being, you know, a, a transparent alternative, you know, reasonable size agency. He said trans- this week, "Transparency is not the same as neutrality," which I thought was a really nice line. Mm.

So they can be, they can be... agencies can be transparent, or you can get transparency if you're a DSP, but that doesn't mean that decisions are necessarily being made in your interest. Yeah. You know? There may be not objective planning and decision-making going on. Yeah.

Um, yeah. But so just, just, before we continue, I've got, I do have one other implication that's been, that's been gnawing at me a little bit. Yeah. And, um, and you know, Jeff Green, who's the, the CEO of, of The Trade Desk came out fighting, right? Yeah.

And he said, look, you know, I'm gonna paraphrase now, but he said, said, "It's slightly rich for the publici- for the, for the, um, you know, holding companies to talk to me about transparency. You, you know, you bang on about transparency in the open, but where's your transparency internally?" Is kind of what the sentiment that he was- Yeah ... kind of saying.

And one of the big implications of this is, is, you know, he's pro- probably right. You know, we need to ensure that the holding companies are open to the same level of scrutiny that they're demanding when they conduct their own audits. Yeah.

So, you know, I hope that this is a universal, uh, gear change in, in an understanding of transparency and what that means, irrespective of where you are within the hierarchy or, or supply chain of, of media, you know? Yeah.

It' cannot be compromised. You know, if you're audited, you're audited properly, and you have to be operating in a fully transparent way, whether you're a DSP, a holding company, you know, or a, or an auditor. You know, that's just the way that it has to work. Yeah. Yeah.

So I hope, hope that that has some resonance within the marketplace. Yeah. It does, yeah. And, and he... they are fighting.

Um, let me share with you a couple of things, and then, then we'll just quickly move on to some advice on that- Yeah ... because you, you gave some good advice on that last week. We've had a lot of advertisers that have kind of reached out on the back of that, trying to learn more.

Um, the one thing. I want to just mention is that, uh, anyone that wants to do a Trade Desk audit, we' have a kind of carved out product on that.

Um, it's up on screen now, but you can, if you just go to ID Comms, you'll kind of see a link. Link- idcomms.com, you'll see a link to it, which is a, um, a, a self-contained audit, just of Trade Desk fee to get, uh, transparency to address some of these concerns.

So if you're curious or you're concerned, or you want to show internal stakeholders where you stand, um, if they're asking questions- Mm-hmm ... then take a look at that.

Um, and the other thing, David, on this story is that I sent out a poll. Now, this is a LinkedIn poll, okay? It's just, just to take this with a, a healthy dose of salt. But I, I know, the people that responded, and I know the people that responded are kind of insightful, um, into this.

For those that can't see, basically it's a LinkedIn poll. It says, "Who will ultimately come out on top from the Publicis versus Trade Desk fallout?" And now you' could kind of read agency versus DSP fallout really, but, um, the results on the screen, with 63 people having responded, is that. the highest score there, the highest vote, is for actually the Publicis coming out the best, and they get 44% of the vote. Yeah.

Second, which I thought might be Trade Desk, it's not Trade Desk, it's advertisers, which I was really surprised about, with 38%. So Publicis Groupe at 44, advertisers at 38.

So 38% of those respondents really think that advertisers are gonna be the beneficiaries of this, which is actually quite encouraging because we' think that, collectively then, we' think that... well, a good, good chunk of us believe that advertisers are gonna benefit from this scrutiny, which we' agree, right? Because actually raising an issue that advertisers can audit, and that's great.

Um, then Trade Desk. got 6% of the vote here. So only 6% of respondents think that Trade, this is gonna be a good thing for Trade Desk, okay? So it's pretty bleak. Mm.

And there's a couple of Trade Desk, people in there that voted. So, uh, so, uh, you know, that's a, that's a big implication here. It's got, it's got, it's got the market worried a little bit, and the share price has taken a bit of a hit on The Trade Desk.

Um, the remainers, the remaining 11% of people basically said, "We, I- don't know what this story is," and they wanted to learn more about it, and that's 11%. So more people didn't know about it actually, than actually think that The Trade Desk should come out on top.

Um, thought I'd share that with you.

Right, let's talk about advice. So that looks quite encouraging maybe for advertisers. Mm-hmm. What should they be doing?

Um, and my advice remains the same as it did this time last week, but I'm just doubling down on it because it's even more important. Mm-hmm.

So number one, uh, understand what level of exposure that you've had on The Trade Desk in the last 12 to 18 months. Mm-hmm.

Whether you're a Publicis, client, whether you're a Dentsu client, a WPP client, or a, an Omnicom client, it's critical to sort of understand, uh, what level of, of inefficiencies perhaps has happened within your supply chain. Just get that' and draw a line under it, but understand what it is, number one. Yeah.

Number two, review your contracts. Whether you've got contracts directly with The Trade Desk, or whether you're contracting through the agency, make sure that there are certain critical components of that contract that are protecting you. Yeah.

Make sure that you understand where the fee is coming from, what part of the, the capital your fee's coming from, and make sure that you've got absolute opt-ins guaranteed to make sure that you're making the right decisions when yous- using any DSP. Yeah. That's the, that's the, the second thing. Yeah.

Um, now, you know, and my advice last week, was if you're with Publicis, ask them what the implications are on your programmatic campaigns. Yeah.

If you can't use The Trade Desk, what implications are them, of them, and, and is there neg- any negative impact on your campaign delivery? Yeah.

It. looks as though perhaps that is going to also be relevant to Omnicom clients perhaps soon. Let's just see- Yeah ... the results of that audit. But make sure you' understand what the implications be- and there should be no compromise or concession to your, your, um, your campaign delivery. Yeah.

Um, I also would be inclined to evaluate the entire supply chain, not, just the DSP side of it. You've got to understand where your money goes. The more, the more forensic you can be, the, as, you said earlier on, you're always better off after an audit than you are before. Yeah.

Um, so the more forensic you can be in, in the auditing process of the entire supply chain, the better. And then my final piece of advice is when you can, take the contract in-house. Yeah.

Doesn't mean you have to buy it in-house. It doesn't mean that you have to execute anything. But have the contract direct with you and your key suppliers and key platform.

Um, and, and make sure that you get advice and guidance as, to how those contracts, when you' sign them, and when they d- direct, are protecting you. That's really important. Mm. Yeah. Very good.

Um, would you' like to be a media director again? Yeah, I would. Good. I'm too, I'm too busy, but yeah. I mean, I- Yeah ... I think it's fascinating. I have to say- Yeah ... I, I, um, you know, I've said to you in privately in the past, that this is the most exciting and disruptive time- Yeah ... in my professional career when it comes to media. Yeah.

I mean, the believers that you've got as a media director in-house are far more powerful than they ever were when I was- Yeah ... when I was in that position. I would thrive. I think I would love it.

Uh, but I'd need- Good ... I'd need fairly good counsel I think, to make sure that I was making the right kind of decisions. Yeah. Yeah.

Good.

Um, well, I mean, you give that counsel to many brands as well. You're being very modest there, because that's what you do. So, um, a lot of advertisers come to us or just, um, specifically to David, uh, I g- I get the, uh, I get the glow by association, uh, to ask, you know, "What should I do?" That's it. Yeah.

"That's it. As a media director, what should I be thinking?" Because it's so difficult to get on top of 25 different angles of everything. Yeah.

What should I be thinking? And if you can boil it down to a couple of steps, and then, and then as a media director or a procurement leader for media, you can then manage your internal stakeholders much better if you just scribble down- Yeah ... some ideas that you get from this show, or some links that we give you, or just give us a call and we can help, help you navigate some of that.

Um, okay. Good. This is an ongoing thing. It's interesting. It's, as we've said, it's kind of just to summarize, it's kind of elevated now to really be agency versus DSP as being that- Yeah ... gateway into the marketplace, and they're both trying to kind of... Essentially, they're trying to kind of cut each other out really. I suppose that's really what it comes down to. Yeah.

Um, or take more of the margin. The way that we think about media, um, if you're listening, you won't be able to see this, but I'll tell you, it's a kind of life cycle. What, what we, what...

This is the way that David and I think about media, and just helpful context for what you're about to hear on this show.

Um, we run a business called ID Comms. Our mission is to help the world's most ambitious advertisers get really good at media. Okay? Nice, simple proposition. That's what we do.

Um, but w- and we think about media from the advertiser's perspective, and we get ambitious advertisers to think about media in these three related areas.

The first is their internal media capabilities, which they can optimize. The second- is their external media partners, like their agencies, like their DSPs, like their whole supply chain, the vendors and partners. And third is trying to optimize all of their paid media investments and then, that go through that system.

And our belief is that you can simplify very complex and overwhelming media world supply chain into those three things. If you can optimize those three areas, you will outperform your category. Okay? That's what we do. We do that every single day.

Um, and on Media Snack, each week, every Friday, we bring you some insights that we think are interesting, uh, through the lens of those, of that kind of simplification of media, and it's, that's h- we find that's helpful over the years to CMOs or senior marketing or procurement executives that just wanna learn and get good at media. Okay?

So getting good at media is pretty easy. You stick in those three lanes, and we'll help you do that. Okay. Yes. Let's get on to the next topic. Yeah. So we're gonna talk about principle-based buying here. Yeah. Yeah. What's going on?

Right. So I think I'm doing this one. Yeah, you're doing this one. Let's go then. Let's do that. Right.

Um, it gives us a little bit of context actually, because we've, we've talked qu- a fair bit on Media Snack, and you've probably all read and heard a lot about principle-based media, inventory media, proprietary media. It's all the same stuff. It's just arbitraging media inventory. Okay?

It's agencies deciding to be sales businesses rather than service businesses. We've talked a lot about that.

Um, we'll provide some links to the show. If there's one that you wanna really watch, it's the, we call our Red Ocean episode- Yeah ... which was about six months ago, um, which really laid out, this is the, this is the e- evolving business model of agencies.

Um, that is principle-based buying. That's a, um, your media agency deciding to act as a principle for your money. I mean, you're, you're still, you are still, uh, the hero in the golden rule, which is that you hold the gold and therefore you should make the rules. But in this example, agencies would like to take your money and act as principles, and they decide essentially where it goes. They buy media in advance, and they try and resell it back to you.

Okay? Agencies do it in different ways. Some of them say, "We don't do it like that. We do it in a different way. We make options or futures. You know, we treat it like a futures market, and we, we're not committed," and whatever. But they all claim that they're taking a risk, so therefore there must be some jeopardy that they get stuck with inventory that they can't shift, so therefore they are acting as principle and they're trying to resell it to you. Okay?

Um, it is, it is a legitimate business model. David and I have got maybe slightly differing opinions now on, on what, how much of it we would do or, or not.

Um, what's interesting, which you can see on screen here, is that the ANA, the Association of National Advertisers, which is the largest trade body representing advertisers in the world, um, a- and is very good at publishing these reports into serious in- industry issues around media, particularly around transparency, have just this week released a new study called The Continued Acceleration of Principle Media, which sounds quite ominous right from the outset.

Uh, and the important... And it's in, in, then in brackets, "And the importance of proper governance." So I appreciate- Mm-hmm ... the ANA actually adding that bit on because it's not just saying there's a problem, they are here really recommending how to address and resolve this.

The most startling insight, I think, there's a couple of things here.

Um, and we will link to the report, it's a free download. And again, I always have to make a point of saying thank you ANA for making these things available. Mm.

There are other trade bodies who conduct these researches, and they just share it with, like, their handful of members, and it doesn't then I think have the impact. The ANA's so generous at funding these studies and then giving them to the industry, so appreciate, appreciate all of you that do that. And it's amazing.

Um, we got an advanced copy 'cause we're friendly with the ANA like that, and, um, so we've had a good, good chance to kinda go through it. The, there's two things that stand out.

One is, um, the amount of advertisers that are u- say they're using principle media, which is about 50-something percent. And then the amount... So there's a whole bunch that say that we don't, or there's actually a chunk that say, "We're not sure," which is a little bit worrying, but l- let's, let's, let's say that, look, you know, we're on a journey of educating people.

Uh, then the other really interesting thing is that, uh, there's only about 60% of advertisers, of US advertisers, these are ANA members, they're pretty major advertisers, only 60% say that their contract actually mentions principle media. Mm.

There's a massive chunk there. You've got, um, there's about a, a 20% or so that say that their contract does not even mention it. Now, this stuff's been around, we know for, like, 10 year, over 10 years, because we've seen it showing up in contracts for 10 years.

Um, and we've been helping advertisers manage it and deal with it and create some gu- guardrails and, and boundaries for how it's used, and, and we've been auditing it for years.

To have a contract that doesn't even acknowledge it is a real problem, and that's really one of the things that, uh, that, uh, the ANA is flagging.

Um, you know, get in touch, let's review the contract or, you know, reach out to ANA or any of, any- anyone else that, that does this kind of work because you have to have proper governance for it. Yeah.

You wanna use it or you don't use it- ... whatever it is, have it in your contract so that the agency knows exactly where the limits and the guardrails are. Okay?

Um, that's the first thing.

Um, the second thing I just wanted to share with those that are watching was, I think, the best trade press headline I have ever seen. Oh, no. Okay.

Which is th- this. If you can see it. This is from Ad Age. So, so, and this is in response to the ANA report being published.

Um, the headline says, "More advertisers are using principle media even though they aren't sure it's in their best interest." That was the Ad Age takeout of the report itself, was that basically usage is going up, but marketers have no idea whether it's any good or not.

Um, and I think that is such a perfect sum- summary of where we are with principle-based media- Yeah ... uh, that it's just, uh, it's, it's kinda scary. But it's easily resolved, right? Yeah.

Um, we can, uh, you know, we c- we can implement, uh, clauses in contracts which look to l- limit and contain the use- Mm ... to sensible a- amounts, and then we can apply an audit onto all the principle media that's actually bought. We can look at it... I mean, we get to look at everything pretty much, uh, in principle media terms. What we don't see-And what the agencies will not disclose is the price paid. Yeah.

Right. So David, what are the implications and what advice are we giving to advertisers on this stuff right now?

I'm gonna ... There are two implications. One, I'm gonna b- be high level, and then the other- Yeah ... implication is, is something that I ... Is actually troubling me a little bit. Mm.

So implication number one, pr- proprietary inventory media is not gonna go away. It is going to be a fundamental component of most agencies' commercial structures. So have a point of view on it. Have a point of view how much you want to take in, uh, what cap you want to place on the amount of proprietary inventory- Mm ... goes through your system, uh, and make sure that you can, as best you can, link it to some form of performance, right? Yeah.

So make sure that it is driving some form of value, because if it's not driving any value for you, what's the point of doing it? Yeah. Frankly, number one. Yeah.

But the bit that worries me, the bit that worries me, and it was this one thing that came through the ANA report, it said that 75%- Mm ... of those respondents that use principle media- Mm ... use 25% or less of it within, their budget. Yeah.

So a, a, a fairly low proportion of the majority that, that. understand that they're using it and use it for a reason. Yeah.

Now, if all of the, reports that we see are to be believed, that the, the big holding companies are making inordinate amounts of money from proprietary media- Yeah ... uh, it beggars the question as, to where that's coming from. If the majority- Yeah ... of those that understand it are using it less than a quarter of their media investments- Yeah ... where's all the big cash coming from?

And I would imagine- Yeah ... that it is, coming from the medium to long tail of advertisers, that as you' stated earlier on, don't understand it' perhaps, aren't aware of it, don't have a, recognition of it within their contracts, and are open to the mercy of the discretion of their agencies as to how much proprietary media should go in. Yeah.

That would be the bit that was, that would be worrying me. You know? Yeah.

That those advertisers are being disadvantaged or taking, taken advantage of because of their lack of understanding around this, kind of, very complex and, and, and, you know, frankly, technical area of, kind of, media delivery. Yeah.

So, you know, it's not just for the big boys that, that, you know, this is, an important issue. This. is for everybody within the sup- everybody within the marketplace- Yeah. ... that they need to be aware of it. Yeah.

And we saw some of that, kind of, come out in the WPP disclosures, didn't we- Yeah ... a few weeks ago, where, um, if you remember that story or you watched our episode, there, was some dis- le- dis- disclosures that were made during a, a legal case that's ongoing, um, with WPP, where they basically disclosed that they made about a billion dollars from principle-based buying. And, but interestingly, they listed a whole bunch of their largest accounts who really don't participate very much. I know.

Um, again, which just starts to suggest to you that there' are, are, uh, a, those m- medium small advertisers that are working with big agencies, that are getting ... Probably they're using an oversized am- amount of volume of- Yeah ... of principle-based buying, and un- and less likely to be audited. Yeah.

And also less likely to show up in the ANA's report, frankly, as well. Right.

So I think even the r- the ANA's report, if it shows at a 25% threshold, uh, that is, uh, that is really only- Mm. ANA members tend to be the larger advertisers because- Yeah ... that's t- g- generally, it's more, kind of, focused at the- Mm ... at the, kind of, higher end. So if you are ... And we call a medium-sized advertiser is anyone that spends about $100 million or less in the US, as an example. So still massive advertisers. Tons and tons of money. A lot of these are private businesses. These are- Really? ... people with real money. Yeah.

Um, you've got to apply governance onto it. That's what the ANA are telling you in this report.

Um, but download it. We'll give you the link.

Um, download the report. The, just even the first 10 or 5 pages- Mm ... just the exec summary, will just give you some great, great pointers. We'll probably do another episode on, on it, or a webinar on it or something. Yeah.

Um, it's really important. But again, thank you to the ANA. Thanks for doing this.

But, you know, our advice, just read the, read the report. Get yourself educated, and then put some money aside. Okay? Put some money aside f- to do some form of audit. Yeah.

It is a fraction of a percent of your budget. Okay? Even ... I mean, major advertisers, they don't spend anywhere near 1% of their money on audit, on, on, on auditing.

Um, the likelihood is, is it's gonna pay dividends. But with a fraction of percent of your budget, apply some governance. You know, that's the advice from the ANA. It's the advice from us. Absolutely right.

Um, you can, you can learn a lot. Right.

Um, we've got time for one, kind of, quick carve-out story. You go.

Um- I mean, you've got a burning-

The, the, the, the thing that I, that I, I think was really interesting, and, uh, credit to Ad Age, they managed to get, uh ... Oh, hang on. Let me move that one. Here' we go.

Ad Age managed to get inside Accenture Media, I think the first people ever to do it. It's like this is amazing, cracking open. I don't know how long it took them, or money, to ask them.

Um, uh, but, um, credit to Euan Larkin and the team at, at, at Ad Age who, kind of, got, got Accenture to come out. Not only did they get eight executives in the office at one time, which was apparently unheard of, but they got them all together for this nice photo shoot.

Um, but they got them all to talk, which is kind of interesting. The, the ... You can see on screen here' is just a, kind of, picture of the, leadership of ... This is of Accenture Song. If you remember, Accenture Song is, kind of, the agency or the marketing services part within Accenture.

Um, the key people are represented here. I won't go through all of them. The, the person to r-Really focus on in this picture, um, is Dimitri, who's there in the black shirt on the back row. Okay? Dimitri Mex, who joined from, uh, from leading IPG, was an, a very senior IPG executive, joined them, uh, in the sum- last summer about... He's been there about six months. And I'd said to him at, the time, "This is gonna be one of the coolest jobs in media. It's gonna be really exciting." Because he's going to decide to what extent Accenture Song has a media, buying operation or not, right?

And he's gonna get to decide, do they acquire an agency? Do they step into, you know, real paid media, all paid media? Do they... And importantly, do they offer principle-based buying? Okay. Which is split in the industry.

So the interesting thing about this. story, again, we'll link to it. You should go read it. It's on, um, Ad Age. They've done a couple of pieces on, on Accenture now.

Um, but Dimitri's comments are huge here. Okay. He says, "No, we are not going to do principle-based trading." So that' means they are not ever going to take a position on media, buy anything, and try and resell it. There' are some agencies, I've mentioned, name-checked some in the past and today, who have said, "We're fully transparent." There are some that say, "We probably won't do principle-based trading." For Accenture to now say, "No," okay, I think is r- a huge, huge, huge, huge thing, because it, it creates this, you know, bifurcated, uh, industry, where you've got big players saying, "You're either doing it or not doing it." And that is the perfect positioning. It was what I said to Dimitri a year ago. If you come out and say no to principle, that is, you set yourself as a category one at that scale.

Uh, none of the other holding companies can follow that because they're too entrenched in this business model, and that is a massive win, I think, for Accenture Song, that they come out. The first time that they've come out to be on record about what's going on in Accenture Song, that's one of the leading lines. They did that really intentionally because they know how important that is going to be.

For advertisers who are starting to sweat a little bit on, what's going on with principle? How exposed are we? Agencies and DSPs are now fighting. Perfect time for Accenture to come out and say, "Never getting any of that."

Um, so again, we mention it a lot. In our Red Ocean episode, the one where we moved all the logos around, there was a point where we kind of moved everybody out of the way, and we brought Accenture right in the middle, and that's basically what this piece does. Mm.

Because they've come public, and they never go public with stuff, but they're coming public with this stuff. Yeah.

Uh, they are here to play. They're still not committing to whether they're gonna acquire any, any media operation or, or just build it themselves, so we still don't know exactly that officially.

Um, but they will not be playing the game. The other thing that works to their advantage, they didn't talk to this, but this is our opinion and view and observation, is that they can run their, if they can run their media operation on smaller margins than the holding companies because the holding companies are also saddled with assets which are loss-making, um, and having to invest in technologies ahead of time where Accenture's already made quite a lot of investments in the technology. So, um, they can run 100% fully transparent probably at lower margin than the holding companies, which is a big implication, big risk, a big threat for, for the whole companies, and we'll just see where it goes. I mean, you know, we're, we're, we're putting it into practice.

Um, we'll see how competitive they get. Very good. Excellent. Yeah.

Um, okay, that's probably all we've got time for. Any comment on Accenture? No, I just think that they, the, they're gonna add a really clear point of difference to the marketplace, and- Yeah ... uh, that can only be a good thing. I, I'm, I'm a massive believer in, in choice for, for advertisers.

Uh, and they just come to market with a different choice, which is good.

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