Stagwell says publishers come first. On Monday it bought Freestar, the company that sells ads for more than 1,000 of them, and its own Owned Media chief says the network will help Stagwell improve its principal media buying. The holding company that buys the ads now owns the company that sells them.

On October 26, Stagwell announced it had acquired Freestar, the Scottsdale, Arizona publisher monetization company founded in 2015 by David Freedman. Terms weren't disclosed. Freestar runs programmatic sales for more than 1,000 publishers whose sites throw off nearly a billion ad requests a day, including Boston Globe Media, Fortune Media, Legacy and Enthusiast Gaming. It says it has driven more than $1 billion in revenue to publishers over the past decade.

Freestar goes into Stagwell Owned Media, the unit run by Ben Berentson that already holds Ink, ReachTV and Real Clear Holdings, the parent of RealClearPolitics. CEO Kurt Donnell and Freedman stay. Donnell's statement promised the company would stay true to its "publisher-first approach." Berentson's said publishers' long-term success is critical to the industry.

Then Berentson told AdExchanger what else Freestar is for. With Freestar, he said, Stagwell can curate higher-fidelity audiences across those publishers, use the network for audience extension on wider media buys, and improve its own principal media buying strategy.

Principal media is the business where the agency buys inventory itself and resells it to its own clients at a price the client doesn't see broken out. Stagwell now owns the pipe that inventory comes out of.

Nick Manning, the British media agency veteran who in August called the industry's "win-win-win" principal media pitch nonsense, got three yes-or-no questions. He answered all three the same way.

Is it a conflict for a company that buys media to also own the sell-side pipe for the publishers it buys from? "Of course it is."

Should a client be told, at the point of purchase, when its media runs through a pipe the agency's parent owns? "Of course they should."

Should publishers have to opt in before their data trains a holding company's buying AI? "Of course they should."

Then he went further than the questions. "The purpose of an agency is to choose best-in-breed to fit the needs of the brand, and when they own part of the supply chain, self-preference is inevitable."

"Agencies stop being agencies when they buy and sell, and they can't offer transparency when principal media is actually owned by them."

His closing line is the one Stagwell's investor deck won't carry: "It's obvious what is in this for Stagwell but not so much for advertisers."

Ad management firms like Freestar sign exclusive deals with publishers to run their ad sales. Their job is to get each impression the highest price from whoever is buying. A holding company's media agencies have the opposite job: get their clients' impressions at the lowest price.

Until Monday, those were two different companies in every negotiation. Now, when a Stagwell agency bids on a Freestar publisher's inventory, Stagwell is on both ends of the auction. If that buy is principal media, Stagwell is also the reseller in the middle.

Stagwell's answer is that it is buying Freestar's technology and services business, not the publishers, and that publishers get a shorter path to Stagwell's advertisers. That may be true. What the announcement doesn't describe is a firewall: who at Stagwell can see Freestar's bid data, floor prices and publisher yield, and whether any of it reaches the agencies on the other side of the table.

Below the line: the year-long supply-side buildout Freestar completes, Jack Myers on why integration doesn't equal transparency, and the questions every Freestar publisher should send this week.

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