Close-Up: Live Issue - Can adland withstand party political tinkering?

The leaders laid out their adspend plans at the latest round of party conferences, our Parliamentary correspondent reports.

What a difference a year makes. For the advertising industry, last year's annual party conference season was dominated by calls for bans or watersheds on junk-food and alcohol ads as politicians reached for easy, headline-grabbing solutions to difficult social problems.

This autumn's conferences, industry leaders believe, saw an outbreak of reality - and even a growing recognition that advertising might be part of the solution rather than the problem.

Not that agencies can relax and think they no longer need to worry about the politicians' agenda. As one threat recedes, another emerges. The danger now comes not from Labour, which is cooling on the idea of statutory ad curbs to combat obesity and binge-drinking, but from the Conservatives.

David Cameron's party has never been tempted by "nanny state" solutions on food and alcohol but has committed itself to deep cuts in the Government's adspend.

The surprise announcement by the shadow chancellor, George Osborne, at the Tory conference that a Cameron Government would restore COI's budget to its 1997 levels - saving taxpayers some £230 million a year - had all the signs of a pledge that had been cobbled together at the last minute.

Osborne decided to offer party activists a two-year freeze on council tax bills, provided that local authorities kept their planned rises below 2.5 per cent. His problem was how to find the central government subsidy, while saying an incoming Tory administration would find "the cupboard is bare". His researchers lit upon the old chestnut of ad campaigns and the use of private sector consultants by government departments to conjure up the £1.5 billion they needed.

They claimed, rather disingenuously, that the "government adspend" was £391 million in the 2007-08 financial year, up from £163 million in 1996-97 at today's prices. In fact, these figures are COI's total spend, less than half of which goes on advertising - £157 million in the last financial year. The rest covers digital, research, publications, events, audio and TV, PR and sponsorship and direct marketing. So it would have been more honest for the Tories to say they would need to squeeze all these budgets to achieve the savings.

The Tory pledge has alarmed ad industry leaders, who do not regard it as a responsible signal to the business world as Britain teeters on the brink of recession. "In the business environment, evidence shows that it is vitally important to maintain a presence in the market during times of economic slowdown," Baroness Peta Buscombe, the Tory peer and chief executive of the Advertising Association, says. The Government, she believes, should follow suit, maintaining its relationship with the public. "In difficult times, government will need to harness and utilise the positive power of advertising and it would be foolish to neglect such a potential force for good. Public policy ad campaigns raise awareness, inspire action and save lives," she says.

Oppositions routinely accuse the ruling party of spending taxpayers' money on party political propaganda - and promise to clean up Whitehall's act when they take power. Tony Blair led the charge for Labour as a fresh-faced frontbencher in the late 80s, then carried on spending when he came to office. The Tory pledge may suffer the same fate if Cameron becomes Prime Minister. "I doubt that much would change," one senior Whitehall official says. "The Tories might take a look at government campaigns, but they would find they are not party political and deliver good value for money. It would be difficult to achieve the sort of savings they are talking about."

COI must remain above the party political fray, but its own figures show little difference between the two main parties. When budgets are adjusted for inflation, the Labour Government spent a record £184.1 million on advertising alone in 2000-01 - just over the Tory administration's high water mark of £183.4 million in 1986-87.

The more immediate threat of legislation on food or alcohol by the current Government appears to be receding, after lobbying by the ad, food and drinks industries. During Labour's conference in Manchester, ministers signalled that the possible (but as-yet-unproven) benefits of statutory controls would not justify the loss of revenue for the three industries - an estimated £200 million for a 9pm watershed on junk food and £100 million for alcohol. The change was symbolised by Helen Goodman, now a Government whip. As a backbencher, she had backed ad curbs. At a fringe meeting in Manchester this year, she defended the Government's voluntary approach and praised the virtues of social marketing.

"I am glad the political world has moved on," Buscombe says. "It is notable that the shrill calls for ad restrictions seem to have died down. It is important to focus on encouraging positive behavioural change rather than blunt and negative bans that will not deliver policy objectives."

However, some battles still lie ahead. Gordon Brown, Cameron and the Liberal Democrat leader, Nick Clegg, have all expressed concern about the commercialisation of childhood and that could become a new battleground for those who see ad curbs as part of the solution. Clegg says: "There is a channel of cartoons that my children watch in which they are bombarded by advertising every 15 minutes. I don't like it. I'm increasingly, as a father and politician, thinking we have not got the balance right."

The conference season this year saw little in the way of traditional ads - reflecting the declining use of press and posters by the parties, tighter spending limits and the need to conserve resources until the general election. The only press ad, branding Cameron as "cheesy and sleazy", was placed not by Labour but by the trade union Unite.

However, both Labour and the Tories used the conferences to cement their relationships with their relatively new agencies. According to Labour officials, Saatchi & Saatchi was closely involved in the strategy for the party's annual gathering. They say it is working closely - and productively - with David Muir, the former chief executive of WPP's Channel division, who is Brown's director of political strategy at Downing Street. "Saatchis are itching to be let off the leash," one Labour source said. "They are fizzing with ideas and their time will come." The problem is not a lack of faith but a lack of money: Labour is £17 million in the red and Saatchis is believed to be on a small retainer.

Euro RSCG was similarly involved in the Tory conference. Its "plan for change" posters were displayed inside the International Convention Centre in Birmingham, but it was more about postcards and beer mats for Tory representatives than posters aimed at the public. According to Tory officials, the agency, which is working on a project basis, is making a "fantastic contribution" in a three-way relationship with Tory HQ and Perfect Day, which designed the party's green tree logo to symbolise Cameron's decision to prioritise the environment.

The two agencies will not go head to head until next June's European Parliament and council "double election", which will be a dry run for the general election expected in 2010. For now, they are investing time and forming relationships, but will not be getting rich quick from their party accounts.


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