Rising demand for principal media buying underpins WPP's turnaround plan

"It's a part of our business, and it's a growing part of our business, and I expect it to continue to grow over time. We're not trying to sell assets that we acquired for billions of dollars. We're trying to work with technology companies, data companies, media companies, to connect these things to build products that drive better performance."

"Principal media - agencies buying inventory for themselves and reselling it to clients, often at a markup - has long divided the industry. Skeptics say the moment an agency acts as a principal it stops being a pure broker and becomes a seller with its own commercial interest to protect."

"An internal GroupM document submitted in court filings describes GroupM generating nearly $1 billion annually from what it internally called 'non-product related income.' WPP disputes the characterization."

WPP Media is expanding its principal trading capabilities, where agencies buy media inventory and resell it to clients, often at markups. Despite a $100 million whistleblower lawsuit alleging undisclosed profits from these practices, WPP executives assert the business is legitimate and growing. Principal media has historically divided the industry due to conflicts of interest when agencies act as sellers rather than pure brokers. However, as traditional fee-based revenue streams face compression, holding companies have aggressively pursued principal trading. WPP leadership claims their principal-based products are more objective and compelling to clients, expecting continued growth in this revenue segment.

Read at Digiday