When agencies defend their captors, the client is the one paying the ransom

By Jasmin Bedir, CEO, Innocean Australia

Australia’s advertising industry is debating whether media buyers have an obligation to the local media ecosystem. Kristiaan Kroon of Omnicom Media Australia argued in The Australian that they do not. That is a matter for government, not marketers; ecosystem preservation is not on the KPI list.

He is right that agencies are paid to deliver results for clients. The agency that employs me is no exception. But that answer is too narrow for a holding company CEO, when how we define those results is part of the problem.

The cost of the current model

Local publishers have lost advertising revenue, editorial roles have disappeared, and creative agencies are shedding staff. Redundancy rates at Advertising Council Australia member agencies nearly doubled from the usual 5–7 per cent to 11 per cent in 2025. Omnicom operates creative agencies here, too. I wonder how their leaders feel about being told the ecosystem their businesses rely on does not belong on the KPI list.

Look at where the money goes. The Association of National Advertisers reported that $26.8 billion was wasted on programmatic media in the second quarter of 2025 alone. Its study found that only 43.9 cents of every US programmatic advertiser dollar reaches a human. Meanwhile, 70 per cent of Australian digital spend goes to Google and Meta.

The client pays for an outcome, yet often cannot independently see where the money went. That is a client problem before it is a publisher problem.

The long-term effectiveness case is troubling, too. Adidas has acknowledged that over-investment in last-click performance hurt its brand’s premium; Procter & Gamble has said it targeted too narrowly. Brand effectiveness, transparency and audience trust surely belong on a CMO’s KPI list. They are not separate from the ecosystem question.

Follow the money

Agencies often say they are simply meeting client demand. Yet a senior executive at the Association of National Advertisers recently said many members are “on Mars” when it comes to understanding how their media investment is handled. Having added media to our agency’s offering two years ago, I was struck by how little some clients could see of the side of the business consuming most of their budget.

The incentives deserve scrutiny. Holding companies can earn a margin by buying media and reselling it to clients as “principal media”. In the US, the ANA found that 58 per cent of marketers used principal media in 2026, while only 57 per cent had formal governance for it. CMOs should know when their agency is acting as an adviser and when it is also a seller.

Smaller Australian publishers have less bargaining power in these deals. If a publisher appears on a plan because it accepted the agency’s trading terms, a client should be able to distinguish that from a recommendation based on audience and effectiveness.

Jen Davidson at Tumbleturn has proposed shifting five per cent of digital spend to Australian media, an estimated $1.1 billion for the domestic ecosystem. It is a voluntary target, and a useful prompt for agencies to examine what their recommendations deliver.

What clients should demand

CMOs can start with a few written questions. Will the agency disclose principal media arrangements before using them? Can the client audit the supply chain? Will campaigns use independent measurement rather than rely solely on platform dashboards? How will the agency credit the work that builds a brand, rather than just the ad that gets the final click?

Last-click attribution gives the final clicked ad credit for a sale, even when earlier advertising created the demand. It makes the closing platform look effective, and the work that built awareness look expendable. If that is how an agency measures success, it will keep recommending the same kind of spend.

Supporting Australian media cannot be reduced to a sentimental plea for local publishers. The question is whether agencies are giving clients a clear account of where their money goes and what it achieves over time. If we cannot answer that, clients are paying the ransom without knowing who collected it.