CLOSE-UP: LIVE ISSUE/THE COI; Will the COI survive when it loses its monopoly?

By ANDY GRICE, campaignlive.co.uk, Friday, 08 December 1995 12:00AM

Andy Grice discovers that the COI is lobbying hard to keep its Whitehall clients

Andy Grice discovers that the COI is lobbying hard to keep its Whitehall

clients



The Central Office of Information, which takes pride in squeezing the

commission paid to agencies working on government campaigns, is about to

get a dose of its own medicine. It faces nothing less than a fight for

survival after the Government’s decision to allow Whitehall departments

to run their own campaigns free of COI control (Campaign, last week).



The boot will now be on the other foot as departments try to squeeze the

1.75 per cent commission the COI charges them on their adspend for

buying media, helping them pick agencies and negotiate contracts. The

departments will hold more aces; if three or four big spenders break

away from the COI and team up with a Zenith, TMD Carat or CIA, then the

COI’s whole raison d’etre could collapse. The 30 per cent savings it

claims on the Government’s pounds 55 million-a-year ad budget would be

reduced without the high-spending departments and it could be left with

a rump of small government bodies.



Most ministers are waiting to see what COI bosses have to say to them

before deciding whether to go it alone. But a Whitehall advertising

chief says a breakaway is ‘a real possibility’ and, ominously,

advertising managers have recently formed a group to discuss matters of

common interest.



Agencies and Whitehall are divided over whether a breakaway group could

match the COI’s muscle. As the pioneer of centralised buying since

pooling government television work in 1978, the COI has a wealth of

experience and good relations with the media.



‘I don’t think anyone else could replicate the COI and I don’t think

anyone should try,’ one agency chief comments. But another says: ‘A few

big Whitehall advertisers could drive an even harder bargain on media

buying. But it would be at the expense of the smaller ministries left

behind at the COI.’



On the face of it, the fragmenting of the COI might be good news for the

23 agencies working on government business. Although the COI refuses to

reveal its average commission rate, it is believed to be around 10 per

cent. Under the new system, Whitehall departments will be able to

appoint agencies - even, it seems, if they are not on the 40-strong COI

roster - and might not keep such a tight rein on commission.



However, there could be dangers for the ad world if the COI were to

break up. ‘It is very important for the industry because it has been

such a patron of good work and upholder of standards,’ Chris Powell,

chief executive of BMP DDB Needham, says.



Chris Rendel, managing director of Foote Cone and Belding, who ran the

Government’s anti-drugs campaign while at Ogilvy and Mather, says the

COI offers much more than just financial benefits. ‘The COI has the ad

experts who can take a longer view,’ he says. ‘If it all went to the

free market, with anybody pitching for anything, there would be very

little consistency. On the drugs campaign, for instance, you could end

up with 25 disparate messages without a central co-ordinating

department.’



His view is shared by Brian Nicholson, chairman of the Advisory

Committee on Advertising, the independent group of media and marketing

professionals which approves pitch-lists for the COI and reviews agency

performance. He believes the COI will rise to its new challenge. ‘What

the COI does not know about agencies is not worth knowing,’ he says. ‘I

think the COI is strong enough to persuade people in government

departments that they would be ill-advised to walk away.’



There may be a halfway house that would not threaten the COI’s

existence. Romola Christopherson, director of information at the

Department of Health, hopes to choose her own shortlists while buying

through the COI to keep its huge discounts. ‘I welcome the fact that it

is no longer a straitjacket, and we can try agency X or add Y and Z into

the pitch,’ she says.



Christopherson believes that the the COI’s trump card remains its media

buying. ‘It does not make a lot of sense to fragment that. The ad

industry would be happy because, over time, it could see it as an

opportunity to bump up prices.’



Peter Buchanan, the COI’s director of advertising, is far from gloomy

about the task ahead and is confident that departments will remain with

it once they have weighed up the pros and cons of breaking away. He says

the COI’s charges to departments are tiny compared with its pounds 90

million savings on media buying over the past five years. Ministries

will discover hidden costs if they go it alone: the COI frees them from

red tape such as the requirement under European Community law to

advertise contracts and have an approved list of suppliers. The COI’s

unique database monitors agency performance and cuts costs, while other

COI divisions ensure it provides through-the-line campaigns.



The COI has already prepared for its competitive new world. In the past

18 months, it has won 24 new public-sector clients which were not

obliged to buy advertising through it, including the Royal Mint, adding

pounds 14.8 million to its centralised buying pool.



‘We are very positive about the future,’ Buchanan says. ‘In the long

run, the Government’s decision will make us a stronger organisation,

providing a better service.’



The former wartime Ministry of Information is not going to lie down and

die - like one of its most famous posters, it believes its country needs

it.



Andy Grice is political editor of the Sunday Times



This article was first published on campaignlive.co.uk

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