Basics · also called media agency, ad agency
Agency
An agency is a company that plans, buys, creates or manages advertising on behalf of advertisers, in exchange for fees, commissions or a margin on the media it buys.
Agencies are the professional middlemen of advertising. Creative agencies make the ads; media agencies decide where the ads run, negotiate prices and buy the space; specialist agencies handle search, social, influencers or retail media.
Most of the world's big media agencies sit inside a holding company such as WPP, Publicis Groupe, Omnicom (which completed its acquisition of IPG in late 2025), Dentsu or Havas. Holdcos pool the spending of many clients to negotiate better rates and run programmatic trading desks. Independent agencies compete on specialism and transparency.
Agency economics are a frequent source of controversy. Besides transparent fees, some agencies earn media rebates from media owners or buy inventory first and resell it at a markup (principal-based buying). Neither is illegal in most markets, but advertisers are advised to spell out in contracts what the agency may keep, following guidance from groups such as the ANA.
Think of it like this
A media agency is like a travel agent for ads: it knows the routes, has bulk deals with the airlines, and books everything for you, but you should know how it gets paid.
An example
A European car maker pays its media agency a fee of 3% of a €50 million budget (€1.5 million) to plan and buy media across 12 countries.
Related terms
Advertiser
An advertiser is the company, organisation or person that pays to place ads in order to sell products, build a brand, recruit, or spread a message.
Holding company (agency holdco)
An agency holding company (holdco) is a parent group that owns many advertising, media, creative and marketing agencies, such as WPP, Publicis Groupe, Omnicom, Dentsu and Havas.
Trading desk
A trading desk is a specialist team, usually inside an agency or advertiser, that plans and executes programmatic buying on DSPs on behalf of campaigns and clients.
Media rebates
Media rebates are payments, credits or free inventory media owners give agencies for the volume of client spend they bring, which may or may not reach advertisers.
Principal-based buying
Principal-based buying is when an agency buys media for its own account and resells it to clients at a price it sets, instead of buying at cost as the client's agent.