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
