Now You See Me, Now You Don't

At Financial Progression, we’ve audited media buying for global advertisers in nearly every major market. That experience gives us a front row seat to how the industry really works, including one of its fastest growing and least understood practices, the use of inventory media.

These deals may seem great and packed with premium opportunities. But they blur a key line: are you buying through your agency, or from them?

This article breaks down what inventory media is, why agencies use it, what risks it brings for advertisers, and how you can make sure your contracts and audits keep everything transparent.

What Is Inventory (or Proprietary) Media?

Inventory media is advertising space that a media agency has bought in advance at a discounted rate without a particular client in mind. It then resells that space to one of its clients under different commercial terms to a standard media buy. The most important difference is that the agency will no longer disclose the price it paid for the media placement being sold to you.

With inventory media, the agency has a financial interest in the media it sells to its clients: it is both the buyer and the seller.

Why Agencies Use Inventory Models

Buying media in advance gives agencies several benefits:

• More control: They can package and price the space however they like
• Extra profit: If they buy media cheaply, say at half price, and sell it close to full price, their income can rise significantly, even after giving the advertiser a discount
• Guaranteed sales: Because agencies must pay the media owner whether they sell the space or not, they’re motivated to move it quickly
• Better cash flow: These deals can help both media owners and agencies hit financial targets

In short, inventory media turns agencies into media resellers and is very profitable for them.

Benefits for Advertisers

For advertisers, inventory media can seem appealing because it can:

• Make media budgets stretch further
• Offer access to premium ad slots at short notice
• Provide flexible pricing, especially in busy periods
• Create chances to try new or bundled deals offered by the agency

But here’s the problem: without full transparency, it’s almost impossible to tell whether you’re getting real value or just what’s most profitable for your agency.

This imbalance is the reason clear, unambiguous contracts and regular, independent checks matter.

The Transparency Challenge

When your agency is both the buyer and seller, the nature of your commercial relationship changes. The agency is no longer acting purely in your “best interests”, it has its own commercial goals as well.

That creates some serious risks:

• Hidden costs: You will not see the price the agency originally paid for the media
• Conflicts of interest: Media could be chosen for the agency’s profit, not your objectives or performance
• Audit gaps: Your agency contract will exclude Inventory Media from your audit rights, meaning parts of your spend will go unseen, even by your financial compliance and media performance auditors

That lack of visibility doesn’t necessarily mean anything wrong has happened, but it does mean you’re taking it on trust.

What We Typically See as Auditors

As independent auditors, we’ve reviewed hundreds of media buying arrangements, and the same patterns appear again and again when inventory media is involved.

Common issues include:

• Inventory disguised as normal buying: Inventory placements are listed on media plans as if they were standard buys, with no indication that the agency acted as a reseller
• Hidden group companies: Invoices are often issued by other entities within the agency group, making it difficult to trace the true source of the media
• Limited documentation: Agencies won’t provide evidence of the price they originally paid to the media owner.
• Inadequate disclosure: We often see generic, blanket statements such as “This media plan may contain inventory media” without confirming whether it actually contains any, how much is included, or on what terms. This kind of wording gives the appearance of transparency, but leaves advertisers with no real clarity or insight
• Vague descriptions: Line items such as “premium package” or “agency bundle” are used without explaining which channels, publishers, or placements were included or making it clear that this is actually internal agency code for Inventory Media

A recent trend
We’ve seen instances where more than half of an annual media budget was spent on inventory media. That meant most of that budget couldn’t be audited and the advertiser had limited visibility on placements and actual costs.

What Typically Worries Advertisers

When we report findings like these, advertisers usually have four big concerns:

1. Value for money:“If I don’t know what the agency paid, how can I judge the value?”
2. Quality:“Is this really premium space, or leftover inventory repackaged?”
3. Conflict of interest:“Can my agency give unbiased advice if it profits from the sale?”
4. Trust:“If this part of my spend is hidden, what else might be?”

Even when nothing untoward is happening, trust and governance take a big hit.

What It Means for Advertisers

When handled openly, inventory media can be useful, but only if it’s managed with clear rules and visibility.

We recommend advertisers:

• Review how your contract defines inventory and principal trading
• Confirm the extent of your audit rights over these media placements
• Require your agency to disclose explicitly when inventory media is being proposed on a media plan and to provide a written rationale
• Set up internal governance measures to decide when it’s acceptable to use agency owned media

Handled right, it can be a useful tool. Handled poorly, it’s a hazardous blind spot.

What Should Advertisers Do Next?

Take five minutes to check your contract and media plans. Ask yourself:

• Are any of your campaigns using inventory media?
• Were these clearly disclosed when approval was sought?
• Can they be audited?

If the answer is “I’m not sure”, that’s your signal to dig deeper.

How Financial Progression Can Help

An independent audit will reveal how much of your spend involves inventory media, whether it’s compliant with your contract, along with insight into what you can do to tighten controls and improve transparency.

We will:

• Quantify how much of your total spend was principal-based (by campaign, market or channel).
• Check whether inventory media was properly disclosed and approved.
• Test whether the agency has met its contractual obligations, in respect of disclosure and reporting
• Provide a report showing what’s compliant and what’s not, with clear, actionable recommendations
• Help you gain clarity and control over your investment in media

If you’d like to understand where inventory media is being used on your account and whether it’s consistent with your understanding, please get in touch.