Close-Up: After the cuts, what can COI do now?

COI might have borne the brunt of government cuts so far, but it can bounce back.

Even though it had felt the Government's hot breath on its neck for weeks and had seen the glint of its axe, COI has still been left reeling by the savagery of a 40 per cent staff cut, a budget that's been slashed in half and the prospect of a redefined role in a fast-changing political world.

The good news is that, although bloodied, it is still alive. Ministers could have taken up the option to kill it off but stayed their hand.

"The Government needs a body such as COI to advise it," Ian Twinn, ISBA's director of public affairs and a former Conservative MP, says. "It has the kind of professionalism that can't be found among civil servants or ministers."

The other positive is that the catharsis has enabled Mark Lund, its recently arrived chief executive, to carry out a restructure that would have been necessary, but more difficult, had not the Government forced the issue.

"Lund wanted to get rid of COI's silo structure and replace it with multimedia teams because government departments were having to deal with too many COI people at the same time," an insider explains.

"That would have involved some redundancies - although nothing like 40 per cent - but it may be that COI will be a better organisation at the end of it."

Nevertheless, having been made an example of by ministers, COI faces a daunting future.

"There's never going to be a return to 'business as usual'," Justin Gibbons, a former senior executive at PHD Media and now a partner at Work Research, warns. "What's happening now is 'business as usual'."

Lund argues that the cuts in COI's advertising and marketing budgets will enable agencies to perform better and lead to the use of cheaper forms of communication such as social media.

Some onlookers interpret this as whistling in the dark. "COI's future communication challenges can't be sorted out through a combination of PR and behavioural economics," one says.

Gibbons contends that a "less is more" strategy by COI won't work. "You can't drop your TV spend and expect Facebook to make up the difference," he argues.

He suggests a better option is partnerships with media owners that not only eliminate production costs but may allow COI messages to be more effective because their authorship is disguised.

Meanwhile, the IPA is responding to COI's plight by asking it to reconsider setting up "test and control" regions in the UK for certain campaigns, a suggestion it rejected about three years ago.

More likely is that showpiece campaigns such as the Change4Life anti-obesity initiative through M&C Saatchi will be made to work harder. Discussions are understood to be taking place about whether it could be extended to embrace other health issues such as smoking and binge-drinking and whether participating companies could increase their funding of it.

Whether or not those companies would demand a lightening of advertising regulation in return remains to be seen. What's more likely is that they would require more flexibility from the Department of Health about what products can carry the Change4Life logo.

"Food manufacturers feel they've worked hard to reduce fat, salt and sugar content," an industry source says. "This impasse has to be overcome before we can get anywhere."

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AGENCY CHAIRMAN - Tim Duffy, UK chairman, M&C Saatchi

"COI work accounts for a big chunk of money at some agencies and if we're to help what has been the UK's biggest advertiser through this period, then we have to readjust.

"We've got to find what intellectual value we can add by coming up with new, imaginative and cheaper ways for COI to communicate. There will have to be less 'by the yard' media buying and greater use of new communication channels.

"To monetise this, we're going to have to demonstrate efficacy and efficiency. But I'm sure we can continue to contribute."

RESEARCHER - Justin Gibbons, partner, Work Research

"Government advertising will change fundamentally because there's no way it can expect to do more with a lot less of a budget. You can't slash your TV spend by a quarter and expect the likes of Facebook to make up the difference. It doesn't open up new means of communication.

"COI's best option is to look at partnerships with media owners. This could work particularly well with TV which has a lot of interesting assets but it will mean creative agencies losing out.

"And don't think the Government would ease ad restrictions in return for helping fund campaigns. It always gets hammered when it tries to do that."

CLIENT - Jon Goldstone, marketing director, Hovis

"Change4Life has been a very well-managed and successful campaign into which the major food companies have already invested a significant amount of money. I think they would be reluctant to put in more cash to compensate for any reduction in government support.

"I don't think such companies would demand a lessening of advertising restrictions as the price of their support. Our partnership with government has been pretty good, leading to better food labelling and more responsible advertising to children. Were we to ask for such a quid pro quo, it would come across as a very cynical move."

TRADE BODY CHIEF - Ian Twinn, director of public affairs, ISBA

"I think the gut reaction of ISBA members is that there may be something to discuss if the Government is looking for greater involvement in campaigns like Change4Life. The last administration was moving in that direction but the problem was that it always wanted to dominate the relationship.

"If we were to go forward on this, the partnership would have to be genuine and campaigns would have to be long-term and backed by consistent spending. It's no good the Government approaching advertisers and just telling them: 'Give us more money.'"


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