Beyond cartel claims: Fixing the broken media model
Summary
Agencies were meant to act as facilitators between advertisers and media owners, but both began to feel they were the ones funding the agency, and, therefore, expected control over its loyalties.The recent investigation initiated by the Competition Commission of India (CCI) into the alleged cartelization by media agencies following a complaint has sparked conversations across the advertising ecosystem. But for anyone who’s worked inside this industry, it doesn’t feel like a sudden shock. It feels like the inevitable fallout of a system that has, over time, lost clarity on who adds value, who gets paid, and who is ultimately accountable.
As someone who built a career inside the agency ecosystem—and eventually stepped away not out of frustration but conviction—it’s evident to me that this isn’t a story of villains and victims. It’s a story of a flawed structure. One that agencies, media owners, and especially advertisers have all helped shape, often unintentionally.
The middleman that everyone relied on
Agencies were originally meant to act as facilitators—bridging the gap between advertisers and media owners, and earning a commission (often around 15%) for managing that relationship. But over time, both sides began to feel they were the ones funding the agency, and, therefore, expected control over its loyalties.
Instead of resolving this ambiguity, the ecosystem adapted around it. The result was the slow emergence of a grey zone—where commissions, incentives, and value delivery became harder to define and harder still to audit.
The evolution of complexity
As satellite television grew, so did the number of media choices, and with it, the complexity of making informed advertising decisions. Audience claims ballooned, measurement struggled to keep up, and advertisers turned to agencies for guidance.
Then came the digital wave—flooding the landscape with formats, platforms, and metrics that promised precision but also introduced challenges like ad fraud, invalid traffic, and opaque programmatic models. Agencies evolved to handle this complexity, but were simultaneously asked to deliver more impact at lower cost. The pressure was intense, and the incentives unclear.
The role of clients and procurement
The most significant shift, however, came from the advertiser side—when procurement functions started taking over marketing partnerships.
Advertising, traditionally a blend of strategy, creativity, and instinct, was treated more like commodity sourcing. RFPs (request for proposals) became exercises in cost reduction rather than value evaluation. In this environment, agencies responded the way most businesses would under pricing pressure—they began quoting more aggressively, offering deeper “savings", and committing to media efficiencies to win business.
This is where a key disconnect emerged: clients began accepting ambitious media rate commitments at face value, often without validating feasibility with media owners. This led to agencies, in turn, setting pricing expectations with media partners that didn’t always reflect market dynamics. And smaller media owners, without much bargaining power, were left with little choice but to comply.
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Agencies didn’t invent this pressure. They were responding to it—often trying to find balance between client expectations, internal sustainability, and media partner relationships.
The middle misses out
In the crossfire, small and mid-sized advertisers often lose out. Hoping for strategic attention, they find themselves deprioritized in favour of high-value accounts. Smaller media owners are routinely squeezed for higher discounts and face the risk of exclusion, if they don’t comply. This is a system skewed toward scale, not inclusivity.
A broken incentive loop
At the core lies a deeper issue: misaligned incentives. When both the buyer and the seller think they’re paying the intermediary, it creates a space for ambiguity, assumptions, and—in worst cases—practices that lack transparency. The CCI investigation may be focused on cartelization, but what really needs scrutiny is the loop that incentivizes short-term gains over long-term value.
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What needs to change—collectively
This moment offers the industry an opportunity not for finger-pointing, but for reflection and reinvention:
· Advertisers need to lead responsibly: Treat agencies as strategic partners, not vendors. Prioritize value over just price and hold procurement to standards that understand the nuance of media and marketing.
· Agencies must continue evolving: Invest in tools, talent, and transparent remuneration models. The future agency will be part advisor, part integrator—not just a media broker.
· Media owners must assert their value: Stop underselling to match artificially created benchmarks. Push for pricing that reflects real audience engagement and brand impact.
· The ecosystem must professionalize: With third-party audits, ethics frameworks, and better data-sharing protocols, we can collectively rebuild credibility and effectiveness.
Final word
The media agency model isn’t broken—it’s reacting to a system that often rewards wrong behaviour. If we want that to change, the onus isn’t just on agencies to reform—it’s on advertisers to rethink, procurement to recalibrate, and media owners to resist the race to the bottom.
This isn’t a case of bad actors. It’s a case of a good system stretched too far by conflicting pressures.
If we want better outcomes, we need to rewrite the rules—together.
Yesudas S. Pillai is founder and chief executive of Y&A Transformation and strategic adviser to Channel Factory India.
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