Agencies focusing just on price are risking disaster

The e-mail, submitted anonymously by a disillusioned sales rep at a weekly magazine, was sent out to the reps at news weeklies. It outlined the tough trading conditions the buyer's agency was experiencing and that one of its large clients had cut its budget for Q2 2009. It basically went on to say that ads would only be booked for this client in titles that could offer further discounts on rates from Q1. The best deals would determine who made the schedule. End of "discussion".

I suppose it's a sign of the times. Clients - and, by extension, their media agencies - are reacting to pressures in their own markets by putting the squeeze on their suppliers. But they are also using the economic downturn as a negotiating tool because they know they can. And, as media owners are at the end of the food chain, they are the ones bearing the brunt of the pain.

A sign of the times it may be, but there are ways and means of doing things. If this media buyer follows the tactic of no debate, no brief, no negotiation and - most importantly - no media planning, isn't he effectively putting himself out of a job in the long run? If his role has boiled down to sending out round-robin e-mails asking who's going to give him the biggest discount, then agencies might as well go the whole hog and do all their negotiating via automated trading platforms such as MediaEquals and hang the consequences.

What happened to smart media planning and placing ads in the correct environment for each individual client? What happened to adding value and providing a professional service within which price is just one element?

The variety, choice and richness of UK media have long been its strength. But if agencies act like this and do business purely on price, the media landscape will be far more anodyne and mass-market oriented when we do come out of this recession. And it will be much diminished for it.

Steve Barrett, is editor of Media Week, steve.barrett@haymarket.com, www.mediaweek.co.uk/stevebarrettblog

This article was first published on Media Week