political trends june 2011

How has the marketing landscape changed under the Coalition Government?

David Thorp

Director of Research & Professional Development

The Chartered Institute of Marketing

The Marketing LandscapeThe Marketing LandscapeThe Marketing LandscapeThe Marketing Landscape


Methodology

• From a round table of senior

marketing figures in central

GovernmentGovernment

• Views and opinions are CIM’s

• Constructively critical


What the paper considers

• The issues – why Government

should spend money on

marketing at allmarketing at all

• Evidence of Government

marketing working

• Issues of measurement


Future economies

• Get supportive stakeholders to help communicate your

messages

• Partnerships• Partnerships

• More dynamic use of social media

• Combine campaigns

• Greater use of segmentation to target existing resources


Top spenders on TV advertising 2009

• P&G: 118 million

• HM Government: 99 m

• L’Oreal: 90 m• L’Oreal: 90 m

• Reckitt Benckiser: 82 m

• Unilever: 69 m

• Royal Bank of Scotland: 66 m

• Kellogg’s: 60 m

• Ford: 48 m

• Tesco: 40 m

• News Corporation: 40 m


Government Communications Spend 2009/10

Total Spend

£1.01 billion

Spend on Direct Communications Activity

£540 million

Spend on Staffing

£329 million


Private companies make great efforts to ensure that their

marketing budgets deliver value and they ruthlessly cut

them when it makes sense. Is COI measuring the

effectiveness of government spending on advertising? Do effectiveness of government spending on advertising? Do

you think it is money well spent?

Paul Sloane on the Marketer blog


The days of spending millions of pounds on expensive projects are over

Francis Maude MP,Cabinet Office Minister

June 2010


A leaner COI is in line with new Government priorities…Our future will be grounded in continuing to deliver excellent communications to achieve Government aims, in the most Government aims, in the most cost-efficient and effective way possible."

Mark Lundquondam Chief Executive,

COIJune 2010


What is COI?• Established in 1946, after the demise of the wartime Ministry of

Information, when individual government departments resumed responsibility for information policy.

• Created as a non-ministerial department, a status it still holds today.• Created as a non-ministerial department, a status it still holds today.

• Is an executive agency of the Cabinet Office and a trading fund.

• As a trading fund, COI has no budget of its own.

• The budgets for marketing and communication activity sit with the 450 government departments, executive agencies, local authorities and wider public sector bodies which use COI’s services.


The 2010 Government Spending Review

• £32 billion of spending cuts by 2014/15

• Departments faced average real terms cuts of 25% over

the four years of the Spending Review.

• Some departments are facing even greater cuts• Some departments are facing even greater cuts

• Most departments were tasked to outline to the Treasury

how they could make cuts of up to 40%.

• Cut the cost of running Whitehall by £6 billion

• Scrap 490,000 government jobs

• Severe impact on COI, which controls most government

marketing and communications activity with immediate

“big freeze” on marcoms spending as of May 2010.


•For all activity costing over £25,000, exemptions must be sought from the Efficiency and Reform Group (ERG) via Matt Tee, permanent secretary for government communications (NB from March 2 2011 the limit went up to £100,000).

•For activity costing below £25,000, departmental directors of communication are responsible for implementing the freeze. (Below £100k from 2.2.11)

•Covers advertising and marketing activity across all central government departments, agencies and non-departmental public bodies

•Applies to all paid for new advertising and marketing spend for the remainderof the financial year 2010-11, across all media formats.

•Procurement should not begin until an exemptionhas been granted

•ERG says it will benchmark the marketing spend allowed to go ahead this year before forming a baseline against which the freeze is measured for future years.


•All departments will have to justify spending on marketing to a group of senior cabinet ministers under a new spending review framework

•Spending freeze “will take effect immediately and will mean a reduction in the volume of work going through COI until the end of 2010/11 financial year”

•Freeze spending on all “non-critical” marketing.•Freeze spending on all “non-critical” marketing.


What does this mean for marketers in government?

1. Marketing Job Losses

�Since the freeze COI has lost 287 staff (40% of its �Since the freeze COI has lost 287 staff (40% of its

workforce)

�Probability is significantly more jobs will be lost over

the next 3 years



2. Strategic Marketing Advisory Board Scrapped

�The body, replaced the Advisory Committee On �The body, replaced the Advisory Committee On

Advertising in 2008 and was established to ensure the

efficiency of government marketing activity.

�The duties of the body have been taken on by the

Cabinet Office's Efficiency and Reform Group (ERG),

which must approve any campaign costing more than

£25,000. (£100k from March 2nd 2011)



3. Cross-departmental Working

�Mainly affected departments with smaller marketing �Mainly affected departments with smaller marketing

teams, such as the Department for Communities and

Local Government, which employed nine full-time

marketing executives.



4. Cutbacks at the BBC Impact Marketing There

�BBC takes responsibility for funding the World Service �BBC takes responsibility for funding the World Service

and BBC Monitor, as well as part-funding S4C. This saves

£340m per year for the Treasury by 2014-15 but saddles

the cost on the BBC.

�When coupled with a six-year freezing of the Licence

Fee, this amounts to a 16% cut for the Corporation.



5. Bonfire of the Quangos

� Despite London 2012 approaching, Osborne opted to � Despite London 2012 approaching, Osborne opted to

cut the budget for UK tourism bodies VisitBritain and

VisitEngland by 34% over a four-year-period.

�Christopher Rodrigues, the chairman of VisitBritain,

said it would cut overseas marketing offices and moving

more promotional work online.


A government spokesperson says…

“…the raising of the threshold is an attempt to put in place "sustainable measures", which will last until the end of the last until the end of the spending review period in 2015…The initial controls were short, sharp, shock measures designed to put a quick curb on spending."


Towards a new dawn for government marketing and communications

• March 2011

Review of Government Direct Communication and the

Role of COIRole of COI

• Prepared by Matt Tee, Permanent Secretary for Government Communication

Scope is “those parts of government

communication…currently covered by the marketing and

advertising freeze and to consider the role of the COI”


On many occasions in the past, so that we were in control of the communication, and because we had the money to do it, our approach was “how can government achieve this?”. In future we will start from a future we will start from a presumption that others may be better placed to achieve our goals, often working in partnership with us.

Matt Teequondam Permanent Sec. for Government Communications

March 2011


The Review: What Does it Mean for Government Marketing?

• The Government will look first at partnerships with the

private sector and trade bodies when producing marketing

and communication campaigns in the future as it looks to

reduce spending.reduce spending.

• The COI is to be replaced by Government Communication

Centre (GCC)

• The Government's 'big society' approach will have a

significant impact on how they achieve their

communication objectives.

• Some organisations and departments will recognise that

they cannot sustain full communication functions and will

look to share services.


The Review: What Does it Mean for Government Marketing?

• There is a need to "exploit" the "significant media

holdings" owned by Government to deliver marketing

campaigns, including on Government websites.campaigns, including on Government websites.


I also conclude that government direct communication will be more effective if a more strategic approach is taken where activity is concentrated in fewer areas of focus and target audiences for campaigns are clearly identified, so that government is not so that government is not unwittingly aiming multiple messages at the same audiences


Tee’s example: Britain in the World

• FCO looking after Britain’s interests abroad;

• BIS encouraging inward investment into Britain;

• DFID providing international aid and support; • DFID providing international aid and support;

• MoD looking after Britain’s security; and

• No. 10 on international leadership and reputation.

“The result would be fewer but clearer, more focused

activities, which avoid duplication and the bombardment of

multiple, fragmented messages to key audiences and

partners. “


A key strand of a different approach to direct communication will be to recognise that, for many of our objectives and audiences, other organisations, or brands, will already have strong relationships with the people we seek to reach. Many of these organisations, which may be commercial, voluntary or civic sector, recognise our goals and are prepared, indeed keen, to work our goals and are prepared, indeed keen, to work with government on achieving them.

Fast food cave-in: Coalition strikes deal with Coca-Cola and McDonald's to fight obesity... but lets them regulate themselves Daily Mail: 1st December 2010


• Involves real partnership, not an assumption that partners

will pay for government advertising.

• Government must recognise that partners have objectives

and imperatives that may not entirely align with

government’s, for example profit.

• Big brands are tired of multiple approaches from • Big brands are tired of multiple approaches from

government and a lack of clarity about the Government’s

priorities.

• Government has few people who are skilled and

experienced in this sort of partnership working.

• If the partnerships are to go beyond the ad hoc and

tactical, government needs to plan as far ahead as its

partners – at least 12 months and probably 18 months.


There is significant potential to ask agencies, media owners, government and voluntary and community organisations to work together for free or near free on campaigns for the common good,


Introducing

The Common Good Communication Council

• media owners and broadcasters were very wary of any

impression that they would carry ‘government messaging’,

feeling that this would undermine their independence.

• Common Good Communication Council, separate from

but supported by government.

• Council could agree the parameters of such a scheme;

ensure propriety; and invite bids from the voluntary and

community sectors and government for this sort of work.


In a Nutshell

Key findings of the Review

• Government policy envisages fewer but more effective

communications with a greater role for partners, both civic

and commercial.

• Government communication budgets and staff numbers

will be smaller

• Establishment of a Government Communications Centre

(GCC) to replace COI

• Expanded role for Efficiency and Reform Group (ERG)

• Payment by results to become a key part of govt.

communications contracts in 2011/12


In a Nutshell

Key findings of the Review

• Three people will be appointed with "experience of and

high credibility in the communications industries” to form a

new Government Communication Oversight Panel


Efficiency and Reform Group (ERG)

In addition to current criteria, consider whether the proposal meets best practice for:

�alignment with government strategy and priorities; �alignment with government strategy and priorities;

�use of insight to develop the proposal;

�partnership;

�evaluation and return on investment;

�minimising spend;

�appropriate use of channels; and

�a payment by results approach.


During 2011/12 the GCC should…

• develop the Government’s marketing strategy;

• decide under what themes activity should be brigaded;

• confirm the size and functions of the GCC; • confirm the size and functions of the GCC;

• scope the size and role of the theme teams and decide

where they are best hosted;

• identify the staff to be aggregated from departments, and

the GCC and ensure that the best staff are in the right

jobs.


What might be wrong with this?

• From COI to GCC to CGCC to GCOP

to ERG to

• Invites Whitehall in-fighting

• Departments would be forced to give up their advertising • Departments would be forced to give up their advertising

and marketing staff to be based within the central GCC

• Do the maths…

1,940 - Current number of comms people

across government

1,000 - Planned reduction of comms

headcount across government

150 - Number of staff in proposed Government

Comms Centre


On the positive side…

• a more strategic, concentrated and targeted approach to

planning and allocating the government’s £1bn marketing

and communications budget (Up to this point, such

spending has been split evenly between the COI and spending has been split evenly between the COI and

individual departments)

• Shift towards digital

• Closer linkage to government priorities


And what does the boss say…?

I am grateful to Matt for the work that has gone into this report. I will discuss the recommendations with ministerial colleagues and the government will publish a full government will publish a full response in due course.


How did we do?

• Get supportive stakeholders to help

communicate your messages

• Partnerships• Partnerships

• More dynamic use of social media

• Combine campaigns

• Greater use of segmentation to target

existing resources


The Social Marketing Group

• Formed in August 2009

• To promote marketing excellence in this sector.

• To promote greater understanding of social marketing and its application as a force for social cohesion, change and delivering the public good.

• To inform members of changes in the marketing environment and their implications and promote high, professional marketing standards.

Thank you

David ThorpDirector of Research & Professional Development

The Chartered Institute of Marketing

political trends june 2011

Business

marketing landscapewhat

marketing landscapemethodology

marketing landscapefor

noncritical marketing

smaller marketing teams

marketing job losses

government spending

freeze coi