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COI letter makes grim reading for ad agencies

In true Sir Humphrey style, a letter from the Central Office of Information purporting to offer helpful guidance on departmental ad budget cuts has spread alarm and confusion among the roster agencies to whom it is addressed.

The letter, from COI deputy chief executive Peter Buchanan, attempts to rationalise the £160m of savings in advertising and marketing imposed by the new coalition government on May 24. But in doing so, it raises more questions than it answers.

First, it is not entirely clear how heavily the axe will fall on advertising – as opposed to other marcoms. Last year, the COI spent £540m globally on the taxpayers’ behalf, of which about £211m was advertising. The letter states that the expected savings “could represent a reduction for this financial year of at least 50 per cent in government advertising expenditure compared to 2009/10.” It stipulates that the “freeze will take effect immediately” and apply to the end of 2010/11.

So, about £105m of the £160m earmarked savings are to come from advertising. Which means, presumably, that the other £330m lower-profile marcoms get off comparatively lightly. Inequity aside, the picture for advertising looks bleaker still given we are already well into the financial year: the £105m of cuts will have to be made over 10 months, not 12.

By now you’ve probably got the impression there’s little scope for any ad expenditure at all. You’re not far wrong. For the avoidance of doubt, Buchanan’s letter goes on to explain that three stringent criteria will further throttle activity. “…Only essential campaigns will be allowed to continue. This will be defined so far (my italics) as campaigns:

“Where the government has a duty to provide people with information, eg changes to legislation or public services;

“Where providing the public with information is critical to the effective running of the country, eg information about paying taxes, recruitment of the armed forces; or” – most mystifying –

“Where there is unequivocal evidence that campaigns deliver measurable benefits relating directly to immediate public health and safety.”

Taken in the round, I suggest these restrictions will add up to a great deal more than 50% of the ad budget. For the rest of the year, roster agencies should start counting upwards from zero, not downwards from 50.

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One Response to COI letter makes grim reading for ad agencies

  1. […] is the really bad news for COI roster agencies, who may have interpreted the draconian restrictions imposed earlier this year as merely a temporary measure, to be relaxed once the economy ticks up. Maude, minister of the […]

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