Do You Know What a Monopsonist Is?

A monopsonist isn’t the seller with all the power; it’s the buyer. In markets where a single buyer controls the purchasing decisions a monopsonist can distort competition, stifle innovation, and leave sellers with little room to negotiate.

At first glance, the rise of monopsony power in the media may not seem as pressing as the familiar concerns about monopolies.

But the truth is, it is every bit as dangerous, particularly when it is wielded by the likes of giant tech platforms, media-buying agencies, and even some well-established broadcasters.

Take, for instance, the power of Google and Meta in the digital advertising world.

These behemoths have consolidated their control over nearly every aspect of the ad supply chain, from gathering vast amounts of consumer data to dictating the rules of engagement for advertisers.

These platforms dominate so thoroughly that they have become the default option for any advertiser trying to reach a broad audience.

But it is not just their sheer size that makes them a monopsonist threat—it is the way they set the rules for everyone else.

Media outlets, particularly smaller players, are forced into submission, often accepting unfavourable rates simply because they have no other choice.

The monopolistic grip of these platforms is mirrored by the media agencies that control the lion’s share of advertising spend. Companies like GroupM, Omnicom and Publicis control billions of dollars in ad budgets, holding media owners hostage to their demands.

They bundle ad placements into bulk deals and wield immense leverage, dictating prices, forcing discounts and securing terms that only benefit the agencies themselves. With few options for recourse, smaller media outlets are left vulnerable, locked into deals that offer little flexibility or profit.

Why should we care?

Monopsonists distort the fundamental dynamics of the media market.

Advertisers no longer get the best possible deal—they get whatever terms the monopsonists offer. Media owners no longer have the freedom to negotiate independently. And ultimately, consumers suffer from a lack of diversity in content, creativity, and quality.

The key is to break free from reliance on these monopsonists by diversifying revenue streams, building direct relationships with advertisers, and, crucially, leveraging the power of first-party data.

The transparency provided by first-party data shifts the balance of power away from the monopsonist and back to the media owner, who can offer more tailored, bespoke services to advertisers.

Another approach is to embrace niche markets and create premium content that cannot be easily replicated on larger platforms.

This differentiation makes it more difficult for monopsonists to exert control, as advertisers may seek more unique, effective channels for their campaigns.

Still, the challenge of monopsony power goes beyond individual action—it demands broader intervention. Governments and regulators must step in to prevent these powerful players from becoming too entrenched. Anti-trust regulations, aimed at dismantling monopolistic power, must be extended to include monopsony power, ensuring that no buyer can dominate the market to the detriment of fair competition.

The advertising industry, once a diverse and competitive space, is increasingly being shaped by a handful of players who control the flow of information and dictate the terms.