The Treasury is claiming huge savings for taxpayers as a result of its
drive to cut the advertising budgets for privatisation campaigns.
Treasury ministers, who have long had the multi-million pound sell-off
campaigns in their sights, say they made a breakthrough by limiting the
cost of last year’s campaign by WCRS to promote the sale of the
electricity generating companies, National Power and Powergen.
At the time, the ad budget was said to be pounds 10 million. But, in a
report published this week, the Treasury has disclosed it was limited to
pounds 8 million - just two-thirds of the pounds 12 million budget WCRS
was allotted in its previous privatisation campaign for BT, which
featured the ‘Inspector Morose’ ads.
The sell-off of the two electricity companies marked the first time that
more money was spent on newspaper rather than television ads, according
to the report by the public spending watchdog, the National Audit
‘The Treasury considered that this form of advertising would be more
cost-effective as it could be directed more precisely at the target
market,’ the report said.
It continued: ‘Expenditure on TV advertisements was therefore reduced
significantly by the purchase of less airtime and, for the first time in
a major public offer, an existing film was used rather than filming a
new series of ads from scratch.’
The cost of TV ads was limited to pounds 3.5 million, compared with
pounds 9 million in the BT campaign. Meanwhile, another pounds 3 million
was saved by restricting a mail-shot to the ten million existing
shareholders, rather than the 20 million households mailed in the BT
Whitehall sources said the lessons learned from the electricity sell-off
will be applied to the current campaign to promote the sale of
Railtrack, and the forthcoming one for British Energy. They stressed
that the key change is that it is no longer necessary to explain the
concept of privatisation to the people most likely to buy shares, which
means campaigns can be much more focused than in the past.