You know that times are hard when the BBC is making cutbacks. Unlike its commercial rivals, the state-owned broadcaster has some pretty cosy financial insurance in the shape of a licence-fee settlement that runs until at least 2013.
With a guaranteed income stream linked to inflation, the BBC can, arguably, make hay while its rivals count the costs of the dramatic advertising storm. Yet, its settlement with the Government came at some small cost and it has been making savings across its business in a bid to demonstrate value for money to the taxpayer.
Last week, it emerged that these cutbacks would extend to the BBC's £100 million marketing budget, with reports suggesting that the Corporation would seek to cut this back by 25 per cent by 2012. The budget will fall by 20 per cent in the current financial year.
The £100 million figure relates to the entire budget of the BBC's marketing, communications and audiences division, which, in addition to advertising in all media and the BBC's own on-air promotions, encompasses such areas as corporate events and PR.
It seems that large-scale corporate branding initiatives such as the "Perfect Day" activity of the late 90s and the "this is what we do" campaign created by Fallon three years ago could become a thing of the past.
The BBC's large number of on-air campaigns, which so rile commercial broadcasters because they are often used to cross-promote services such as radio via the BBC TV channels, will also be cut back.
In recent weeks, there have been definite signs of a change in mood at the BBC regarding its marketing, with it at least not wanting to look like it is lavishing excessive amounts of taxpayers' money on glossy advertising. Last month, Campaign reported that the Corporation had blocked the airing of a Radio 1 campaign, created by Fallon, over fears that it could look "too expensive".
1. The BBC spent just £2 million on paid-for media during 2008, according to The Nielsen Company (excluding its commercial arm, BBC Worldwide). This was split between cinema and outdoor but the signs that this would be reduced were already apparent in January when the BBC ended a deal with Digital Cinema Media to run its promos in cinemas.
2. The most high-profile BBC campaign of the past year has been its "making the unmissable unmissable" work for the iPlayer launch, created by Rainey Kelly Campbell Roalfe/Y&R with online advertising through GT (one of two agencies on the BBC's digital creative roster alongside Agency Republic). Other paid-for campaigns have supported BBC3 and BBC Radio.
3. While outdoor and cinema media owners might bemoan a small loss of revenue with the cutbacks, they could spell good news for the BBC's commercial TV and radio rivals. Radio companies, especially, have long criticised the cross-promotion of BBC radio services on its television stations and its campaigns have seen a number of stinging criticisms from the trade body The Radio Centre in recent years (the latest relating to the use of bands such as U2 and Coldplay to endorse Radio 1). This was also an issue for the magazine industry until, in 2005, the BBC agreed to stop promoting its magazines (such as BBC Good Food and the Radio Times) on its TV channels.
4. The cutbacks in marketing spend coincide with a changing of the guard in the management of the BBC's MC&A division. Tim Davie, the previous director of the division, was promoted last July to director of BBC audio and music. The Microsoft marketer Sharon Baylay takes over this month, and her experience in running Microsoft's online services division may hold some clues as to the general direction of the BBC's marketing.
5. While agencies on the BBC roster (Fallon and RKCR/Y&R on the creative roster, with MPG handling media) might experience a BBC that is entering a new era of relative austerity, sources indicate it will make greater use of new media channels to target audiences. GT's iPlayer work and Agency Republic's interactive activity to support the BBC1 programme Spooks are seen as examples of the way forward. The Spooks activity featured the creation of a spoof Facebook site, Facespook, which enabled users to become involved in a Spooks mission.
WHAT IT MEANS FOR ...
- Cutbacks in marketing budget could mean fewer corporate branding initiatives. However, some observers suggest that these have been few and far between anyway, and coincidentally have run at times when the Corporation has been looking to impress key decision-makers when facing an especially tricky licence-fee settlement.
- The good news for commercial rivals is that the cutbacks will inevitably result in fewer promotions on the BBC's own channels for its services.
- A greater emphasis in the BBC's marketing on channels that deliver clearly identifiable results, such as digital advertising and search marketing.
- In the past TV, radio and magazine groups have been scathing over the BBC's use of its public-service platforms to promote products from its commercial arm or to cross-promote.
- While these concerns have been reduced in some quarters by changes in the BBC's policy, radio companies, in particular, have continued to express concerns over promos supporting BBC radio that run on BBC TV channels. Recently, The Radio Centre complained that the BBC was using established bands such as U2 and Coldplay to promote its radio brands rather than concentrating on unearthing new talent.
- Commercial rivals are generally encouraged that the BBC will be spending less on paid-for media.