Observed Signal · Apr 27, 2026 · Partnership · Source: VideoWeek · Impact: 2/5 · Sentiment: Positive
PMG Warns Against 'Renting Your Margin' in AI Deals
PMG’s EMEA president Josh Krichefski tells VideoWeek that while agencies commonly form AI partnerships with Big Tech to accelerate capabilities, relying solely on partnerships risks "renting your margin" and is unsustainable. PMG is prioritising building its own AI platform as a core part of its business model. In a VideoWeek interview filmed at New Video Frontiers 2026, Krichefski also discussed AI-driven growth areas and described the risk of clients in-housing media buying as overstated. The piece was reported by Dan Meier and published on 2026-04-27.
Provides agency strategy insight on owning AI capabilities versus relying on Big Tech partnerships; relevant to agency margins and competitive positioning but not industry-shifting.
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Key Takeaways & Evidence Grounding
- PMG is building its own AI platform and regards it as fundamental to its business model.
- Josh Krichefski, President, EMEA at PMG, said partnering alone risks "renting your margin" and is unsustainable.
- The interview was filmed at New Video Frontiers 2026 and published by VideoWeek on 2026-04-27.
- Krichefski described the risk of clients in-housing media buying as "overstated."
Connected Companies & Entities
1 Entity mappedRelated Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
PMG pushes agency model into platform-led buying
PMG founder and CEO George Popstefanov argues the company has long operated beyond a traditional agency by pricing outcomes rather than hours and building a shared operating system, Alli, that surfaces data and executes media. PMG built Alli Buyer Cloud as its alternative to standard DSPs, offering impression-level clearing prices, direct publisher integrations (NBCUniversal, CBS Sports, Universal) and a refusal to take principal media positions. PMG reported roughly 38% revenue growth in 2024 (reported) and is among early partners piloting FreeWheel’s AI agent infrastructure to connect Alli to streaming inventory and monitor deal performance in real time. The firm positions its data layer—ingesting, contextualizing and acting on brand data—as the foundation for moving from marketing execution to broader business transformation for clients such as Nike.
AI Compute Costs Reshaping Principal Media Deals
Agencies are increasingly routing AI infrastructure and token compute costs through principal media deals, requiring clients to commit fixed shares of spend to principal inventory in exchange for agencies covering AI expenses. The practice leverages agencies’ existing principal-media economics — bulk wholesale buys resold at a markup — to fund unpredictable AI costs, but it can create opacity for clients lacking audit rights. Industry voices say this is an extension of long-standing commercial trade-offs (efficiencies, offshoring, contract length) rather than a wholly new model, and outcome-based pricing remains rare outside well-aligned large brands.
Agencies’ AI Operating Systems Face Commoditization Risk
Agencies have invested in proprietary AI-powered operating systems (WPP Open, Omnicom’s Omni, Stagwell’s The Machine, Havas Converged, PMG’s Alli, Horizon’s Blu, etc.) to centralize data, planning and creative tools and increase client stickiness. A Gartner research note warned that roughly half of agency-built AI platforms could fail by 2029, citing consolidation, advertisers building bespoke AI or buying from hyperscalers, and shrinking differentiation. Agency and holding-company leaders (e.g., Omnicom’s John Wren, WPP’s Stephan Pretorius) argue scale and negotiated enterprise agreements give them an advantage, while vendors such as Brandtech’s Pencil emphasize transparency about underlying models (Anthropic, OpenAI) and token-costing. The ANA survey flagged principal-media buying is widespread but governance lags. The briefing frames a growing industry debate over AI token economics, vendor transparency and whether hyperscalers will disintermediate agency platforms.
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