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Media Agencies Lick Lips Over 'Principal-Based Buying'

Trend Summary: The current era of digital ad buying has seen agency-client relationships become more complex. As has the way in which media is bought.

In a market formerly dominated by TV buys and commission-based compensation deals, the agency and client arrangement made sense for both parties. Today, however, agency-client relationships are not as simple as they once were - nor is the methodology via  which ...

... media is bought.

Consequently agencies are seeking additional sources of revenu and warming to the riskier practice of owning all sorts of ad inventory outright, then selling it to clients as a bundle inclusive of tech and service fees.

According to Ron Amram, VP of media at Heineken USA: "Conversations have definitely picked up", referring to what agencies call "principal-based buying."

The payoff delivers potential for new income and an alternative sales pitch to marketers.

"It's a way to get a good deal on inventory, depending on the media vendors financial needs throughout the year," said Dave Penski, chief investment officer for Publicis Media U.S.

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[Estimated timeframe:Q2 2016]

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