Media: All about ... COI's media review

With £211m at stake, there will be winners and losers, Ian Darby writes.

Spend, spend, spend. Like the out-of-control 60s pools winner Viv Nicholson, the current Government seems intent on splashing the cash to get its voice heard.

Last week's annual report from COI revealed that the Government has become the UK's largest advertiser, after a hike in adspend of 35 per cent to £211 million.

COI's new chief executive, Mark Lund, the former chief executive of the advertising agency Delaney Lund Knox Warren, argued that the increase was justified because "government campaigns can help save lives and save money".

That may be so, but in recent weeks, the new-business market seems to have been dominated by COI, both for creative and media agencies.

"Thank God the Government is spending because nobody else is," was the cry of many a new-business director as pitches for, among others, a Youth Alcohol Action Plan, the Department of Health's sexual health business and a brief for the Child Maintenance and Enforcement Commission reached agencies.

Then came the news that COI is to review its £211 million media buying business (which is currently split between five agencies along the lines of six media channels) and consolidate into one agency. So, there will be one big winner and a few losers in the media agency world come November.

However, some say it is harsh to focus simply on the headline figure of the hike in COI's adspend. In many ways, the department is progressive in its use of media and a bellwether for the way that advertising is moving - its digital marketing spend rose by 84 per cent to £40 million, a sign that government campaigns are embracing new channels.

That said, with recent national press headlines focusing on the perceived failure of high-profile COI advertising campaigns such as the Home Office's anti-knife crime activity, there remains a constant pressure to deliver. In this context, all eyes will be on COI to achieve maximum efficiency and value through the media buying review.

1. COI was formed in 1946, following the closure of the wartime Ministry of Information. Its stated aim is to "secure policy objectives through achieving maximum communication effectiveness and value for money". Lund, who replaced Alan Bishop as the chief executive of COI in June, reports to Liam Byrne, the Minister for the Cabinet Office, and is also expected to work closely with Matt Tee, the permanent secretary for government communications.

2. In addition to bringing savings for government departments through reduced media buying costs, COI also offers support in areas such as publications, events and direct marketing. Although it made savings of around £50 million in these areas, staff costs increased by £6 million to £43.6 million in 2008-09 as average staff numbers rose by around 40 to 688.

3. COI has been working on "embedding communications planning" into every aspect of its business. This process has been led by Mark Cross, the communications planning director, and aims to bring about greater levels of integration between COI services such as research and data as well as between media channels in campaigns. In addition, Douglas McArthur, the former chief executive of the Radio Advertising Bureau, has worked as a consultant to advise on how COI structures its media buying "framework". This has contributed to the decision to consolidate media.

4. COI's media buying contracts run with agencies until next April. Then COI plans to replace them by appointing one agency to handle media buying. Carat currently handles TV and cinema buying, MediaCom handles press buying, i-level online buying, Starcom MediaVest radio buying and Posterscope oversees outdoor buying.

5. Agency sources fully expect COI to review its communications planning roster following the buying review. But, broadly speaking, COI is expected to keep its planning separate from the buying to encourage variety and hire the best thinking at media agencies. Media agencies were also encouraged by a welcome move upstream when the likes of Mediaedge:cia and Naked Communications were added to COI's new strategic consultancy roster.

WHAT IT MEANS FOR ...

COI AND THE TAXPAYER

- Generally, COI is moving towards a more "integrated" communications structure and the media buying review is a reflection of this.

- Agency sources suggest that the decision to review has more to do with this strategy than an ability to deliver massive media savings. The headline figure in COI's annual report proudly states that it already gains a 49.9 per cent reduction off station average price and ratecard for government departments.

- While it would be nice to round this up to a neat 50 per cent, one buying director says: "I don't think COI can get much greater efficiencies from the media marketplace but this could result in getting greater efficiencies from its agencies."

- However, in a statement, COI said that pulling all spend together - digital, mainstream and sponsorship - will "deliver increased efficiencies both within and across channels, including further savings on media costs".

- Peter Buchanan, the COI deputy chief executive, says: "The market is changing. COI needs to maintain a market-leading position and continue to deliver the very best prices for all our clients."

AGENCIES

- Generally, media agencies like to work on COI business. It's relatively lucrative and interesting.

- However, its buying agencies are also expected to deliver against tough targets as it's taxpayers' money that is funding activity.

- And the sheer scale of the business could have an impact. The move to one buying agency raises some concerns that such a large account could unbalance even the largest agency's trading book. As one trading director says: "£200 million-plus makes an agency very dependent on COI. If I was a client of the agency that wins it, I would be concerned about the impact it would have on my business."

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