Opinion: Perspective - Digital must be the way forward for a new-look COI

Alan Bishop, the outgoing chief executive of COI, says this week in our feature (page 26) that the digital revolution, and how the public interacts with government, has been the most exciting change of his time in charge of the government's communications agency.

COI is certainly on a mission to integrate. The body is already considering a merger of its advertising, digital and direct rosters to create one super-roster of suppliers (Campaign, 6 February) - an excellent move in theory, if it can avoid that list becoming too unwieldy.

Leading this drive will be COI's new chief executive, Mark Lund - a man with plenty of experience of change, and of making tough decisions.

Lund's appointment is a good one for lots of reasons - he's got bags of experience (including dealing with government), he's built a strong, effective and integrated agency, and he's one of the industry's most respected leaders. He'll need all those skills if he's to successfully manage the minefield of government relations and bring the notoriously slow-moving COI into a fast-moving digital age.

But in choosing private sector experience over Whitehall, COI has at least shown its intention to pursue a new broom approach to the way it works.

COI has historically been at the front of the move towards digital and has long been one of the UK's top spenders on digital advertising.

But, although things are changing, its budgets are still heavily weighted towards broadcast - of the £391 million total annual marketing spend to March 2008, it spent £156.9 million on traditional media and just £35.4 million online.

It's also a fact that the current agency roster system, a system that grew up as different departments were created at different times, is looking increasingly outdated. And the traditional broadcast model of government communication, telling voters that it's good for them to do one thing, or bad to do another, is equally behind the times.

The solution has got to be digital. All governments want a dialogue with their electorate - especially at a time when confidence is at a real low - and online offers an unprecedented opportunity to make that happen.

It's also significant that Directgov, the government portal for online services, has now been brought into COI's remit - its success will have demonstrated the benefits of online to all the government departments that will need to buy into the new way of working.

For all those reasons, I'd expect digital to become of the utmost importance to COI and its roster agencies. But I also think it will be the traditional ad agencies, not the digital specialists, who are set to benefit.

In the current market, all clients are cutting costs - anecdotally, agencies say planned savings of 25 per cent on marketing budgets are becoming the norm - and traditional media billings (see our Nielsen figures on page 1) are also on the slide.

One of the best ways to keep revenues up seems to be by agreeing to reduce monthly fees, but compensating by pulling in the digital portion of an account that may previously have been held by a specialist agency.

This financial imperative certainly seems to have been a driver for ad agency change. All of the big agencies now produce digital work for their major clients and some, like Bartle Bogle Hegarty, CHI & Partners and VCCP, are coming up with award-winning campaigns that more than match up to those from digital specialists.

Many of the larger digital agencies have turned down COI accounts in recent times, blaming a cumbersome roster and the project-based nature of relationships.

That's a decision they may come to regret. Of course, there will always be a need for technical expertise on specific jobs, but digital communication is about communication as well as digital - and it's the ad agencies that are the masters of that.

- Claire Beale is away.