“We are cheaper.” That was the mantra of the digital marketing community at the end of the century and beyond to gain respect and a seat at the big boy table. 

Unfortunately, this mantra continues to be the USP for digital agencies. Cheaper Reach, cheaper frequency, cheaper creative, cheaper everything. The downward pressure has increased over the years because of corporate demand to Marketing and Procurement to achieve more with less, additional competition from technology companies and dramatic changes in the publishing world. leading to even lower prices. 

The tombstone of failed digital marketing should read “We are cheaper”

It has cheapened the vast majority of digital marketing: 

Brands are willing to spend millions for digital media buys but they have problems investing more than a dime for a digital creative unit.

The race to the holy grail of cheapness has led to questionable moral and ethical choices when it comes to publishers (hence the advent of verification and anti-fraud services), agencies (Trading Desks and preferred partnerships come to mind) and brands (cutting agency compensation down to a brittle bone). 

The race to the bottom always starts out with quick wins

At the starting line, the race began with smart efficiencies. Hard choices were made and they lead to better outcomes.

But over the last few years, the competitive market has turned the race into a “Running Man” contest: brutal and losers wherever you look. The race has harmed the whole industry, all stakeholders and, most importantly, the mission of advertising. Bare-bone staff at agencies because of bare-bone contracts with clients. Someone is always willing to become the next agency for one point or full-time employee less. Limiting choices throughout the whole ecosystem.

When you participate in a race to the bottom, it’s not clear who’s the biggest loser: The agency that comes in second place or the winner? When you reduce the headcount to get the contract, you have to cut corners, force people to do the job of two, scrimp on culture, never find time to train, become an even more mediocre agency. You have to be harsher and more authoritative than you want to be. You become an agency and an employee you never wanted to be. 

No great brand is known just for being cheap

Ironically, agencies always tell their client not to focus their messaging on price alone. One basic rule in marketing. But agencies never follow their own advice. Efficiencies and discounts get you in the door but, in the end, clients want much more than that. 

When will this race end? 

It won’t. For the foreseeable future. The industry has made the bet that technology is the savior of all its problems. And, one can’t deny the advantages in the short term. More programmatic buying will lead to less headcount and increased profit margins. Those will be eaten away by Procurement, Google’s of the world and shift to in-house marketing functions almost immediately. Remember: Once you start the race to the bottom, the winner ends up at the bottom. 

And while these agencies are heading down the path of failed digital marketing, new contenders will have the guts to point to their product or service and proclaim: “We are not cheap, we are worth your investment. We don’t flood the market with miserable banner ads, using questionable technology barely kept in check with anti-fraud tactics. We designed a service you want to pay for.”