That framing didn’t survive the news cycle. 

After the remarks ricocheted across the trades, Paramount stepped in to clean them up. The company clarified that Shell was referring to savings guarantees on Paramount’s own media buying handled through the holdcos, not any kind of revenue guarantees tied to its ad sales. A source with knowledge of the deal, backed that version of events, saying the group passed on making revenue commitments when approached, and that its spending with Paramount isn’t expected to move this year. Publicis and IPG, for their part, pointed Digiday back to Paramount’s clarification and left it at that.

The whiplash reflects how fraught principal-based trading has become. The model isn’t new or inherently improper, but the opacity around it changes the dynamic, shifting agencies from representing advertisers interests to managing their own commercial position.

Imagine a mid-sized streamer eager to firm up demand. An agency holdco steps in with a principal-based proposal. Instead of simply representing the streamer in a buy, the holdco commits to purchasing a defined volume of impressions as a principal and reselling that media to clients. The streamer gets predictability and a committed revenue stream. The holdco takes possession of the inventory risk, treating the media as an asset it can repackage and sell on.

A few years ago, CMOs would have lined up to call this a conflict of interest. Today, many lean into it. Guaranteed access, preferential prices and early priority on supply are hard to refuse. What they don’t get is visibility into the true cost of the inventory the agency has bought and then sold to them. That stays out of sight because the margin sits in the gap between what the agency pays and what it charges.

“We’ve created an advertising system that is all about efficiency, and principal media plays into that by providing cost, low cost for advertisers, margins for agencies and revenue for publishers,” said Jay Pattisall, vp and senior agency analyst at Forrester. 

Which is to say, it’s not going anywhere. What was once consigned to a murky corner of the business has become a defined system with clearer safeguards. Holdcos now build in layers of auditability — vetting vendor lists, inventory sources and quality signals — to give marketers oversight without revealing the underlying economics. Some have even “double opt-in” rules, requiring client approval at both the contract level and the campaign level before selling them principal-based media. Moreover, media plans are labelled to distinguish principal from on-principal inventory, and agencies bundle these arrangements with added forms of value. It’s not transparency but it’s a version of accountability the industry has decided it can live with.

“There are agencies that have told us they started a principal media program because they were losing new business,” said Pattisall.

And that helps explain why the model has become a bigger talking point in major media reviews. Beyond Paramount, the practice surfaced last year when Amazon split its media business between Omnicom and WPP, according to an ad exec, who exchanged their knowledge of the deal for anonymity. A growing set of advertisers — streamers, social platforms, banks and retailers — see these arrangements as viable as they scale their ad businesses. 

For Shell, that became clear during the review itself. 

“So the initial objective was to try to use this review to lower the cost of buying marketing for our various marketing entities, most notably our streaming and our film divisions, which are the two largest buyers of advertising,” said Shell. “Once we got into the process, we realised that the opportunity was significantly bigger than that.”

What followed was a rare window into why companies that also sell media increasingly view these structures as growth engines.

“As you can imagine, part of the nuance of this was what’s incremental,” said Shell. “We did not just want to get advertising buys that were just replacing current advertising. We expect to see most of this advertising in the digital area where we need it the most, and you should see that in our numbers over the next couple of years.”

Whether that plan ever comes to fruition is another question. What’s clear is that marketers can’t overlook the risks. Principal-based buying can inflate prices for weak supply, obscure true media costs and tilt plans toward agency-owned inventory. Audit rights weaken. Measurement skews. Innovation narrows. And agencies shift from advisors to sellers, creating government risks and long-term performance drag even when the short-term math looks efficient. 

That tension is especially visible now. The fourth-quarter scatter market is actually being materially affected in a negative way for sellers because there’s so much principal media inventory trying to get filled at the moment.

“There’s a lot of media that have been bought up on a principal basis that’s trying to get resold,” said David Dweck, president of digital shop Go Fish. “I’ve talked to colleagues at holding companies who said they’re trying to offload some of it. And one of the people who contacted me is trying to offload some of that to us.”

Ultimately, this is what it comes down to. The debate isn’t about whether principal-based buying exists or whether it can be transparent in theory. It’s about whether the industry’s economic incentives have drifted so far toward margin extraction that they’re eroding trust, creativity and the strategic value agencies once claimed as their mandate. 

Publicis Group CEO Arthur Sadoun is a case in point. He has spent years casting Publicis as the adult in the room on transparency and reporting, pushing a narrative of cleaner economics and clearer incentives. Yet, his company faces the same structural pressures as every other holdco group: stakeholder demands, shrinking creative margins, procurement-driven fees, and the need to show market resilience. Principal-based activity remains a small piece of Publicis’ U.S. business but it still plays a role in closing that commercial gap. 

That’s what gives his business critique of the financial reporting choices of Omnicom, whose principal-based activities are more pronounced, an edge. He’s calling out a system his own group hasn’t fully escaped, even if it participates at a different scale.  

But he’s not the only one. The holdco era has been defined by moves like this — strategies rooted less in operations, more financial engineering. Publicis may have moved further from that playbook than most but not entirely.

A final note of caution hangs over all of this. Business Insider reported that a former WPP employee is suing the company, alleging he was fired after raising concerns that its media investment arm was running an improper kickback operation. 

The claims remain unproven but they show quickly these issues can escalate. Much of what’s being challenged reflects long-standing commercial practices, especially outside the U.S., where volume incentives and owner-funded remuneration are still the norm. But once questions emerge about how these incentives are generated, credited or disclosed, the line between accepted practice and perceived misconduct thins fast.

In a market already strained by opaque principal deals and margin-driven trading, even familiar mechanics can become legal or reputation risk the moment the underlying trust falters. And yet, they continue to anchor how small but growing chunks of business gets done. Or as Pattisall put it: “Principal media is a business reality.”