Doctors open second line of attack on fast-foods with call for punitive “fat taxes”

April 19, 2012

It may of course be a coincidence. But I suspect not, given the close timing. No sooner has Professor Terence Stephenson, speaking on behalf of 200,000 doctors, called for a ban on “junk food” brands sponsoring sports events than up pops another prominent medic, advocating blanket “fat taxes” on soft drinks and chocolates.

Will the next step, you might wonder sardonically, be for the medical profession to emulate Oliver Cromwell and call for the banning of mince pies?

The eminent health evangelist in question is Dr Mike Rayner, of Oxford University department of health. His argument follows a well-worn formula.

It starts with the unexceptionable premise. About one in four British adults is either overweight or obese. Something needs to be done about it because it’s costing the National Health Service £5bn, he tells us.

Then comes the health warning, coated in hysterical medi-rhetoric: “We are in the grip of an obesity epidemic.” (Remember the medical profession’s headless chicken performance over Bird Flu?)

And finally, the seemingly inescapable logic of a solution: “We use taxes to discourage drinking and smoking. It raises lots of money for the Treasury and prevents people from dying too early. There is now lots of evidence that manipulating food prices could promote healthy eating.”

What prescription could be more reasonable than that – for the already over-burdened British taxpayer?

As it happens, Dr Rayner – unlike Professor Stephenson – does not disclose his attitude towards advertising these noisome products. But we can infer it from past performance, and the fact that he appears to be offering flanking support to Stephenson’s earlier attack on Government policy.

The medical profession’s enthusiastic adoption of “fat taxes” seems to owe its immediate intellectual provenance to a British Journal of Nutrition study – one of whose co-authors is Professor Susan Jebb, an eminent nutrition specialist who has been the government’s main adviser on obesity since 2007. The study specifically called for a 10% fat tax on sugary drinks and full fat milk, which would, it suggested, cut consumption and prompt a switch to healthier alternatives.

Like most of these things, the idea of “fat taxes” originated in the United States. But it has gained more traction over here following adoption, in limited measure and differing degrees, by Hungary, Denmark and France. The stringent French model is, it would seem, the one favoured by (for instance) the Royal College of Physicians: “Studies have shown that following these measures, the number of overweight children in France has dropped from 18.1% in 2000 to 15.5% in 2007,” it said, late last year

The RCP, like Rayner and other obesity experts, is increasingly frustrated by the Government’s preferred strategy of  behavioural “nudge”, which it considers woefully ineffectual.

It must be confessed this self-same Government has done itself no favours by – first of all –  abolishing one of the principal instruments of nudge, the COI; and, secondly, by plunging itself into an entirely self-generated “heated pasty tax” crisis.

If hot pasties are to be more heavily taxed, then why should the principle not be extended to other fattening foods?

The problem with this argument, logical though it seems in its own right, is the old one of quis custodiet custodes ipsos? Who, exactly, gets to decide what is harmful to our health, and therefore punitively taxable? A few pints of Coca-Cola a year is a very different matter to a systematic diet of junk-food. The medical profession thinks it knows the answer. But it does not. In cack-handedly dealing with one form of social evil it threatens to inflict on us another: bureaucratic authoritarianism. Officious red-tape, that is, to you and me; and of course to the business community, which ultimately pays all our wages. Even those of most doctors –  via the public exchequer.

Has Francis ‘Jerrycan’ Maude committed an even bigger blunder with “Son of COI”?

April 2, 2012

Cabinet Office minister Francis “Jerrycan” Maude’s legendary communications skills were on full display last week, with a gaffe that caused the Government its worst wobble since the election.

Let’s hope this is not an omen. Maude is, among other responsibilities, the minister in charge of direct government communications. Meaning: he has been the prime mover behind the dissolution of the Central Office of Information, which officially closed on March 29th, and the fashioning of its hypoglycaemic successor, the Government Communications Centre.

It’s too early to write off “Son of COI” as another one of Maude’s blunders – yet. Only time, and ramped-up expenditure in anticipation of the next general election, will give a definitive answer on that. Nevertheless, it is clear the new organisation will face formidable challenges right from the start.

No one, including COI insiders, can take serious exception to Maude’s fundamental critique of the 66-year old institution: that it was spending far too much (not least on itself) and needed to be cut down to size.

What has incensed critics is the savage severity of the resultant pruning, and the furtive ideological makeover accompanying it.

Let’s take a helicopter view of what has happened.

The new GCC team will be expected to carry out all the essential tasks of its predecessor at the COI. That is to say, it will coordinate Whitehall departmental campaigns from the centre, evaluate them, foster cooperation between these departments, media plan and buy for them and monitor the media results.

The COI once boasted a team of over 700 to accomplish these tasks; even towards the end, and after savage cuts, it could still muster a headcount of 400. The GCC, by contrast, currently has a full complement heading towards 150.

That figure, small though it is, does not fully reflect the painful new reality. Nearly half of the new team is made up of already existing communications (ie PR) staff  extracted from the departments of state. They are not (it almost goes without saying) marcoms experts and would not have formed a part of the COI’s remit. So the marcoms element of the team is lean indeed.

Moving on, the integration of comms and marcoms might seem no bad idea. And in principle it is not. Many would argue that PR people have grasped the potential – and limitations – of digital media, particularly the so-called social graph, far better than those working in traditional brand management.

That should not blind us to the dangers, however. Particularly those inherent in a merger where comms has come out top.

Significant in this respect is the Government’s decision to appoint Jenny Grey as permanent executive director (CEO) of the GCC, in January. By all accounts, Grey is a popular and competent executive, but she has zero experience of traditional private sector marcoms. Previously she was director of policy and communications for No 10 and the Cabinet Office (responsibilities she retains as part of her new role). Before joining the civil service in 2008 she worked for the Audit Commission, Cancer Research and the NHS. Her career began in agency PR.

In appointing Grey, the Government went back on its previous commitment to pick a marketer from the private sector. Grey is no doubt a popular ‘insider’ choice. Clearly, she is well liked in the Cabinet Office. And the departments of state are unlikely to have objected either, inasmuch as one of their own – a civil servant – will now be running the co-ordinating shop.

But the decision does leave you wondering who will be qualified to do business with the outside world: private sector contractors – marcoms agencies prime among them.

The answer to this question might, in other circumstances, have been Grey’s deputy, Wendy Proctor. Proctor had plenty of ad agency experience before she became client services director at the Department of Health. But in her new role as deputy director, Cabinet Office shared communications service, she will have her work cut out managing the undermanned “shared delivery” pooling system that ministers to the needs of the 7 government department “hubs” set up as part of the administrative reform programme.

These “hubs” are themselves experimental and rather controversial. It remains to be seen how well they will work in aggregating and filtering departmental work.

So the GCC will be a much smaller, more inward-looking creature than its predecessor. It will have a very steep learning curve. Its mindset will be that of the comms department and, indeed, of government ministers. It will favour short, sharp, “messages”, designed to curry favour with the Daily Mail and opinion polls over long-term strategic programmes whose true value may not become apparent until well after the next general election.

Even it were interested in some new equivalent of DrinkDrive or Change4Life, where nowadays would it find the resources to properly evaluate such programmes?

Marcoms, once the COI fairytale princess, has ended up being Cinderella at the GCC.

RIPping the heart out of government comms

June 24, 2011

If you want an exemplary lesson in how to throw the baby out with the bathwater, look no further than the Cabinet Office’s muddled plans for superseding the Central Office of Information.

Admire, first of all, the masterly language of its press release: economic to the point of curtness, yet replete with the kind of ambiguity that once sent the Light Brigade charging down the wrong valley. Clearly the release is written by – and at the behest of – people who haven’t got a clue about the most basic principles of marketing. They seem to think it’s just another branch of PR.

Now let’s move to some of the detail, such as it is. Ostensibly, Cabinet Office “Enforcer” Francis Maude has finessed the advice of his recently departed top adviser, Matt Tee, into a much more economical proposition. Tee’s report, it may be remembered, recommended the COI be streamlined into a fleeter, rebranded, organisation of only 150 employees (2 years ago, it had a staff of about 730). Maude has got the bit between his teeth and evidently believes that government can dispense in its entirety with the services of a formal centralised body orchestrating its communications.

Instead, all government marcoms will now be remitted to the departments of state where they originate, unmolested except by “a new governance structure” of 20 people, dedicated to the ruthless eradication of all duplication and waste. So important is this new department of oversight that it has as yet no name, being referred to quaintly as the ‘Communications Delivery Board’. Another of the heretofore COI’s critical functions, the appointment of agencies, will be hived off to a small “specialist communications procurement unit under the leadership of Government Procurement”. Let’s see how the department of shoes and ships and sealing wax deals with that one. Finally, the rag-tag-and-bobtail of “specialist services” will be placed in “a shared comms delivery pool”, whatever that may be.

The important point to note is that the dismembered functions of the COI will now operate as fully-fledged arms of the Cabinet Office, rather than being semi-detached from it. In other words, they will be vulnerable to covert, if ignorant, political manipulation in a way they were not under the ancien régime. The litmus test of manipulation will be in the appointment of the CDB’s new executive director. Currently, the COI retains some private-sector savvy assets in the form of its chairman Chris Wood and its non-executive director Simon Marquis. It is not clear, however, that either of these will, or will wish to, succeed to the new, attenuated, top role. The most likely appointee will be someone with Tee’s kind of background – a director of comms, skilled at garnering positive press headlines but with no practical knowledge of marketing.

Not everyone will be dissatisfied with this outcome. The big-spending departments of state, such as Health and Transport, are no doubt savouring a famous victory. Under Tee’s proposals, they would have been issuing P45s to many of their dedicated marcoms people. Not only has that idea been kicked into touch: these departments will now be in control of their expenditure in a way they can only have dreamt of a decade ago, when the idea of departmental UDI first erupted during Carol Fisher’s contentious reign as COI chief.

Alas, Health and Transport are the exceptions that prove the rule. They can boast of high profile, successful campaigns – such as Drink Drive and Change4Life – with considerable resources irrevocably committed to them, even in the present austere climate. Elsewhere, the glee may be rather short-lived. Take more occasional users of the taxpayer’s shilling, such as the Department of Justice. No amount of astute manipulation of the headlines by its press secretary was ever going to win the public over to the odious idea that dangerous prisoners might be let out earlier if they owned up to their crimes. The winning argument – centering on making the overloaded justice system more effective and less profligate with public money – is a subtle one, best embedded in a long-running strategic campaign. And who better qualified to help devise it than the old-style COI, informed by the most up-to-date techniques of behavioural nudge?

No chance of that under the new regime. Indeed, with so few experts employed, it would be no surprise to see the government’s communication programme collapse under the weight of its workload. The complete abolition of the COI is a cynical economy too far. Sadly, the Government will probably only come to realise this as we approach the next general election – and marcoms spend soars once again.

Wanted: CMO of government to head son of COI

March 18, 2011

The COI is dead; long live the Government Communication Centre. That is the distilled recommendation from senior mandarin Matt Tee in his snappily titled ‘Review of Government Direct Communication and the Role of COI’, just published.

It may be a recommendation, and Tee himself may be about to depart for pastures new, but we can rest assured that his word has the force of writ. It’s all over for the COI, bar the quibbling. The rupture with past traditions going back to 1946 is so fundamental that only a rebrand, in Tee’s considered opinion, will do it justice.

So what exactly are the implications of Tee’s vision? The first is that the GCC will be smaller in size and scale of ambition than its predecessor. When fully set up in around 18 months’ time, it will have a staff of about 150, as opposed to the current complement of 450 (after 40% cuts). It will be more strategic and more confined in its role, but this should not necessarily be interpreted as “less powerful”. On the contrary, Tee intends to strip power not from the centre, but from communications divisions within separate departments of state (or feuding baronies, as they are sometimes known). Part of this realignment is driven by a pledge (frankly avowed) to bring down the deficit: so expect plenty more redundancies in various communications departments in the coming months. But the over-arching idea is a better, joined-up, communications programme, more economically expressed, which will rid government of substantial duplication in the way it puts out messages. In other words, the programme will be theme-led rather than departmentally-led. And the messages will be “brigaded” around the GCC, which will act as ringmaster rather than as a trading centre.

What’s interesting is just how few of these master “themes” there will be: six in all. Even if this figure is more arbitrary than it appears (why not five, or nine?) it signifies a massive compression of the existing direct communication service – not to mention a great deal more command and control from the centre. Indeed, Tee makes it crystal clear that less will mean more: more effectiveness “through better evaluation and insight”; and relentless focus “on value for money and return on marketing investment”. The thinking is that, by 2013 at the latest, all existing departmental communications executives (excluding press and internal comms) will be pooled into something called the Government Communication Network (GCN), which in turn will pour nearly 500 into the 6 theme teams and a further 150 into GCC. The remainder (estimated at about 1300 personnel) are likely to find themselves surplus to requirements.

Superficially, all this looks unpromising for the marketing services community, for whom COI spend was long a gravy train. There has been an increasingly bleak assumption across the industry that government would attempt to saddle the private sector (agencies and brand owners) with a growing burden, under the guise of pro bono collaboration, in place of the healthy income stream to which agencies, at any rate, have hitherto been accustomed.

In fact, Tee has been highly pragmatic about the role of paid-for communication. For one thing, he has junked the hated US Ad Council concept, touted late last year. Had this prevailed, ad agencies and media owners would have been expected to contribute their wares free of charge: Tee reckons this is simply “not workable, nor desirable”. Instead, communication will be divided into a tripartite framework: pro bono; collaborative; and fully paid-for. In place of the Ad Council is a boiled-down Common Good Communication Council, “facilitated” (and presumably financially underwritten in some way) by government, dealing with such public information topics as “literacy” or “road safety”. Then, a stage up: partnerships with like-minded commercial and civic organisations (Green issues and obesity are cited; business4life comes to mind). And finally, and wholly financed by taxpayers’ money, government-only issues, such as recruitment to the armed forces or taxation.

Similarly, paid-for media will survive, although buyers and planners now have to demonstrate good reason for elbowing aside placement on government-owned assets (websites; poster sites on government buildings; Directgov etc), which the report estimates to be worth £50m a year in media value.

There’s even some unequivocally good news, for those – at least – involved in digital communications: Tee thinks the government doesn’t do enough of it.  “My conclusion is that government should make greater use of digital channels in direct communication and that digital considerations should be built into all communication activity from the start,” he says.

Last but not least, now that COI ceo Mark Lund has decided to move on, who will be running the new organisation and how much power will he or she wield?

Despite the anticipated shrinkage in budget, the new executive director (ceo) will in some ways be more powerful than any COI predecessor. Not only will the GCC act as an “intelligent gateway”, with a veto on all government marketing and advertising spend over £100,000, its chief executive will also be closer to the heart of government. The ceo will sit on a cabinet sub-committee, chaired by the minister for the cabinet office (currently Francis Maude) and will also be charged with producing a marketing strategy for government at the beginning of each parliament.

An insider tells me: “What we’re talking about here is a CMO for government. Who could fill the role? Well, the brief is going to require very careful construction. The job won’t automatically go to an agency or business person. Obviously, sophisticated political skills are required. But the centre of gravity should lie in marketing. Experience of large and complex marketing operations is the vital pre-requisite. And it’s clear you’re not going to get those kind of skills in the public sector, are you?”

Along with a new executive director, the government will also be recruiting a Government Oversight Panel consisting of “three people who have experience of and high credibility in the communications industry”. Their job will be to ensure GCC head remains up to snuff. It’s not dissimilar to the current COI non-exec role. So I would not be surprised to find the two present incumbents, Chris Wood chairman of Corporate Edge, and Simon Marquis, filling two of the seats. They would offer sensible continuity at a time of radical change. But who will be the third?

PS. Tee’s official title, Permanent Secretary for Government Communications at the Cabinet Office, will be abolished when he leaves this month. The COI/GCC project will thereafter be overseen by Emma Lochhead, HR Director at COI/Cabinet Office (Government Communications).

Havas’ David Jones – the man who would be king

March 9, 2011

What a week to be away. Mark Lund, chief executive of the COI, announces he is quitting after only two years (it’s usually a five-year contract) to return to the private sector. There could be no bleaker verdict on the outlook for public-sector marcomms expenditure in the foreseeable future.

Meantime, David Jones (on the right) has emerged as group CEO of Havas’ global operations. Jones takes over from Fernando Rodes, who has held the post since billionaire financier and industrialist Vincent Bolloré first became chairman and principal shareholder (35%) of Havas.

At first sight, the management shake-up comes as a complete surprise, with Rodes unexpectedly announcing his semi-retirement at a board meeting yesterday. In fact, the accompanying restructure has all the hallmarks of a carefully stage-managed event. It should also be noted that Rodes’ resignation comes precisely five years after he was installed in 2006.

Rodes has been competent rather than outstanding at the Havas helm, and seems to have been feeling the pressure from Bolloré. Global expansion has been hesitant and Havas’ recent set of annual results show solid rather than spectacular signs of recovery. They certainly lag the performance of the really big hitters such as WPP and Omnicom.

Rodes is a complex and somewhat enigmatic figure. He holds many trump cards: urbane, an accomplished linguist, well plugged into the Franco-Iberian business community, he is also a key player in MPG – a media planning/buying specialist set up by his father Leopold, and now a strategic component of Havas. But the appeal (like MPG’s) is regional rather than global. And he comes across as a somewhat reluctant leader.

Jones, whose middle name is ‘Vitality’, can be accused of no such reticence. For some time, he has been the obvious leader-in-waiting, as head of EuroRSCG Worldwide and latterly Havas Worldwide (meaning all of Havas’ global advertising operations). Which is where the recent growth, particularly in North America, has really been happening.

To these responsibilities will now be added MPG, plus other media buying units such as Arena. Note, however, that Jones’ own power-base remains intact: he will continue to be CEO of EuroRSCG.

He’s a shoo-in in other respects, too. Fluent in three languages (English, French and German), Jones has been an indefatigable performer on the world stage ever since he rose to prominence at Havas. He is a natural brand ambassador.

We should not underestimate his achievement, however. At 44, he is the youngest-ever CEO of a premier league advertising and marketing services group. He is also that extraordinarily rare phenomenon, a Brit in charge of one of France’s most cherished companies.

No pressure then, though I doubt he’ll show it.

BSkyB – nearly the company with the UK’s biggest marketing budget

January 4, 2011

Will BSkyB soon become the UK’s biggest marketing company? It’s a sobering thought  – especially for those who, like culture secretary Jeremy Hunt, must now consider whether Rupert Murdoch and his son James are fit and proper guardians of the 61% of the broadcast media company they do not already own. What will they do with unfettered control of all that money – not so much when it is directed at ITV and the BBC (the case already), but at BSkyB’s non-broadcast rivals?

In fact, BSkyB is still some way from being the company with the biggest marketing budget. The latest Nielsen figures, which leaked out just before Christmas in The Telegraph, reveal that BSkyB has now moved into number two position behind Procter & Gamble in the advertisers’ league table: not quite the same thing, but the most reliable indicator we have in these matters. The main casualty – inevitably given what has happened to it – is the Central Office of Information. For some years the COI sat on, or very near, the top of the pile. Its fall from grace has been melodramatic: despatched from top to fifth place, with spending slashed 47% to settle – for now at – £112m. There’s no likelihood of it getting back.

BSkyB, on the other hand, increased its spend 20% to reach £161m. But even that wasn’t nearly enough for it to become top dog in the near future. P&G put on another third – giving it an unassailable lead at £189m. Unless of course BT, currently 7th with a spend of £104m, continues its phenomenal 44% multiplication of spend for the next three years (unlikely, I suggest).

These Nielsen figures are interesting indicators, but they need to be viewed with considerable caution. Although they purport to record expenditure to the end of the calendar year, there are a number of caveats; for example, there is no internet spend included for the last quarter (a significant omission). They are, moreover, merely a ratecard indicator: they do not tell us what was actually spent after discount. Finally, they do not record all forms of marketing activity. And some of these excluded sectors, like POP, are absolutely massive.

For all these imperfections, however, the Nielsen figures reveal a remarkable truth. BSkyB has become one of the UK’s most powerful companies, and it has done so in large measure through the intelligent application of marketing.

Small-minded policy sets agenda for Big Society demands on advertising industry

November 10, 2010

No one could make it up. You’re a new government pledged to introduce sweeping efficiencies to the way Whitehall is run. One of your first moves is to seek out an experienced taskforce leader universally admired for his managerial track-record. Instead, you pick Ian Watmore – a technocrat whose most recent achievement has been an inglorious stint as ceo of the Football Association (itself probably the most dysfunctional governing body known to man). And, just to rub everyone’s nose in it – especially the many about to receive their P45s – you award him a prime minister’s salary of £142,500.

Watmore is in day-to-day charge of the Cabinet Office’s Efficiency and Reform Unit, and works closely with Cabinet Office Minister Francis Maude and Treasury minister Danny Alexander to ensure there is a coordinated approach to tackling waste in government departments. This week it launched its plans for (inter alia) a new model government advertising programme that will involve  a “payment by results model, using government channels, and a US-style Ad Council”.

Perhaps because the wording is cryptic to the point of ambiguity, there is enough there to offend just about anyone who might be instrumental in making the policy succeed. Payment by results, for example, could well be code for no fee upfront to any agency involved in government marcoms; at very least it suggests arduous negotiation over how best to evaluate the tricky issue of behavioural change.

Then again, what exactly are “government channels”, and what sort of substitute are they for the commercial media they must to some extent supplant? The merest suggestion that the BBC is a “government channel” would provoke a furious debate over its independence. ITV wouldn’t be too chuffed either, at the prospect of all that lost revenue. But if not the BBC, then what else could this mysterious phrase encompass? Hospital and doctors’ waiting rooms, perhaps – although they’re not exactly the backbone of a national media strategy.

But the pièce de resistance is surely the “Ad Council” idea, which shows a frightening naivety about the very nature of advertising. If the Council is supposed to be a low-cost replacement vehicle for the Central Office of Information, then Watmore and his ministerial chums should think again. Something which was set up in 1941 in the heated aftermath of Pearl Harbour (highlight: the Smokey Bear campaign, devised to alert Americans to the dangers of the Japanese deliberately starting forest fires by shelling the US coastline) is hardly an appropriate model for today’s more sophisticated communications needs. The Ad Council lingers on, but as a charity not a government body – still less one that delivers government advertising.

Industry reaction to the proposals has been a barely suppressed anger. And for several good reasons. First, although the government is making great play of consulting the industry, the feeling is that this consultation is merely lip-service; the reality is an ideological blueprint being imposed from above, to which industry must accede. Secondly, there is exasperation at the idea of the advertising and communications business being expected to subsidise government messages; isn’t it doing enough already with such initiatives as Business4Life and “Why let good times go bad”? Thirdly, there is concern that the government’s Big Ask will suck the life out of genuine pro bono work for charities – performed by agencies already teetering on the edge of compassion-fatigue.

UPDATE 2/12/10. Someone seems to have persuaded Francis Maude that abolishing the COI and substituting a pro-bono US-style Ad Council would be a daft idea. At any rate, the rhetoric has been toned down. There’s no more talk of ‘abolition’, simply scaling down its operations and where possible devolving them to industry partnerships.

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