NEW MEDIA: SPOTLIGHT ON COI'S DIGITAL AGENCY ROSTER - Digital sees its coming of age with COI's consolidation plan

COI's overhaul of its digital shops heralds the sector's growth, Mark Sweney writes.

Once again the Government's agency relationships are under the spotlight.

With a creative roster in place and the recently introduced media planning roster bedded down, COI Communications has turned to digital advertising.

Last week's decision by COI to undertake the most wide-ranging shake-up of its digital advertising is being heralded by the industry as a positive sign of the serious role new media plays in the advertising mix.

COI is aiming, by April, to centralise all of its online planning and buying capability into one agency. It currently uses a range of agencies in a more piecemeal approach. These range from the digital specialists such as i-level to the new- media arms of above-the-line agencies such as Publicis' interactive@optimedia.

This pitch will undoubtedly be fiercely fought as the account is estimated by COI to be worth more than £4 million in the coming financial year. It is also running a second pitch to form a roster of around six agencies to handle online creative advertising.

"The roster is being created because of tremendous growth in digital," Jamie Galloway, the director of digital media at COI, says. "A lot of above-the-line agencies have invested in developing digital capability, and there are a number of excellent start-up companies that we don't have access to through existing relationships."

Juliet Blackburn, the head of digital at the AAR, sees the review as a coming-of-age reminiscent of moves made by BT in running digital agencies across its operation. "I think it is an understandable move. My own experience is with BT, which is similarly set up to COI with a central marketing communications unit," she says. "COI acts as an agency to government clients and as a client to agencies. This move will increase buying power through consolidation the same way BT uses i-level centrally."

She does warn, however: "From a planning and buying perspective it makes sense as long as the candidate can handle the volume of campaigns required."

According to COI's own figures, government spend on online advertising only (not including the large amount of web and interactive TV build work that is undertaken) was £1.2 million for the financial year 2000 to 2001. That figure more than doubled to £2.6 million in 2001 to 2002 and is set to increase again to more than £4 million for 2002 to 2003.

Recent COI online campaigns include advertising for police recruitment, the Department of Health's campaign on adult sexual health, the National Blood Service and the Inland Revenue's self-assessment campaign.

COI's drive to create a much more structured approach to support development of such online activity is a consequence of online media becoming an increasingly substantial part of the media mix. In a study commissioned by Havas Advertising and conducted by the London Business School, expenditure on internet (including websites, extranets, e-mail marketing, wireless and digital TV) rose year on year by 19.7 per cent in 2001 and is predicted to jump another 23.3 per cent between 2002 to 2003.

As more research is undertaken, a body of evidence is increasingly highlighting the importance of the internet to consumers. A case in point is the work Freeserve commissioned from The Qualitative Consultancy for its Life in a Fishbowl report. It found that one-fifth of media consumption time was spent online, placing it third behind TV and radio, but ahead of newspapers and magazines.

Such evidence of increased public use of the internet is important to COI, which is accountable in everything it does. Danny Meadows-Klue, the chairman and chief executive of the Internet Advertising Bureau UK, says COI is finally giving due attention to new media, an area it has been rather weak in, given its spending muscle.

"COI is pretty much at the top of the expenditure table above the line, but only just makes it into the top ten when it comes to new media," he says. "Now the audiences are there, the COI team is endorsing the need to up-weight activity."

Meadows-Klue says he doesn't have a view of the online media planning and buying account being consolidated to one agency. Yet he has plenty to say about the formation of the new creative roster. "We would welcome a roster for creative work as it is an area of great challenges at the moment," he says. "Many traditional creative directors are not engaged in the online process so a special creative roster makes a lot of sense. An industry issue is the need for offline agencies to be shown how to tackle online as many of the skills are similar."

One of the biggest growth areas is wireless marketing and interactive TV, a sector not included in the creative review. Galloway claims that this is an area that is not yet sufficiently developed to warrant a full roster approach.

"Mobile is more suited to blue- chip FMCGs than government. Every technology is always on our mind but campaign requirements don't have the demand for wireless yet," he says. "Consolidation and development of the wireless sector is needed. Wireless is included in the media planning and buying brief so we can get advice on it."

According to Galloway, interactive TV advertising has not supported many COI campaigns, but it is a medium he expects to see rapid growth in from April this year. COI's use of interactive TV sites is also on the rise.

However, the main focus for Galloway in the coming year is firmly on internet advertising. He says it is still the fastest growing area of COI's new-media mix.

This could be good news for the agencies who land a place on the new roster.