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Nike is taking a fresh look at its digital agencies with a “reverse auction” style global review in which it is collecting rate information, signaling it could put more pressure on fees. The sportswear giant recently initiated the process via its global procurement department, according to a document obtained by Ad Age.

Roster agencies are being asked to provide new information on their rates and capabilities. Nike then plans to run a “reverse auction sourcing event” for agencies and update its agency contracts with new pricing. Reverse auctions are generally frowned upon in the agency industry as a signal that clients are seeking the lowest bidders. The fact that a high-profile, marketing-driven company such as Nike is using the process could be a bad omen for the agency world, which is struggling to adapt to rising pressure from clients seeking lower rates.

Reverse auctions “are typically reserved for commodity-based industries,” said one agency executive who has worked with Nike. The company’s move to deploy one with agencies is “a very dangerous and slippery slope.”

Continue reading at AdAge.com