A media buying agency negotiates and places advertising on your behalf, and how it is paid determines whose interests it serves. The industry runs on two models that look similar to a client and differ fundamentally: disclosed buying, where you see what the media cost and what the agency charged, and undisclosed, where the agency sells you inventory at a margin.
Disclosed and undisclosed are different products
In a disclosed arrangement the agency reveals media costs and charges a stated fee or commission. In an undisclosed one it buys inventory and resells it, and the margin is its own business. Both exist legitimately and only the first lets you audit what you bought. Ask which you are being offered, in writing.
Where a buyer still adds real value
Television, radio, out of home, print and sponsorship are still negotiated, and a specialist with volume and relationships genuinely buys better than an advertiser acting alone. In automated channels the leverage argument is weaker and the value is in planning, measurement and keeping waste out of the supply chain.
Ask about rebates and principal trading
Volume rebates from media owners and principal trading, where the agency group owns the inventory it sells you, have been the subject of industry investigation. Neither is necessarily improper and both should be disclosed and addressed in the contract. An agency that will not discuss them is answering the question.
What to require
Disclosed buying where possible, audit rights, placement level reporting, clarity on rebates and principal trading, and your ownership of any platform seats. Enterprise advertisers negotiate these routinely and smaller ones rarely ask, though the same terms are available to anyone who does.
Questions people ask about media buy agency
Is undisclosed buying wrong?
It is a legitimate model and it is not auditable by the client. If you want to know what the media actually cost, you need a disclosed arrangement written into the contract.
Do media agencies get better prices?
In negotiated channels, generally yes, through volume and relationships. In automated channels the argument is weaker and planning and waste control matter more.
Should the agency hold the platform seats?
Ideally you hold them with the agency granted access, so the spend history and audiences remain yours if the relationship ends.