NEWS: Electricity sell-off sets trend for adspend cut

The Treasury is claiming huge savings for taxpayers as a result of its drive to cut the advertising budgets for privatisation campaigns.

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

Office.



‘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

privatisation.



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.



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