Royal Mail plans to use fewer specialist shops

Royal Mail plans to slash its 30-strong agency roster and cut the range of marketing disciplines that it employs as it kicks off a review of its £60 million business.

The review will encompass eight marketing disciplines including advertising, direct mail, relationship marketing, brand strategy, sales promotion and digital.

But the postal operator wants agencies to provide integrated solutions or pitch with other shops in a bid to use fewer specialists.

Paul Rich, the head of marketing at Royal Mail, would not say how many agencies would be appointed, but did say it "may end up with a lead agency, or two supplemented by some niche agencies".

The review should be completed by June. The successful agencies will sign an initial three-year contract.

The review coincides with the arrival of Royal Mail's new chief executive, Adam Crozier, a former chief executive of Saatchi & Saatchi and the Football Association.

Royal Mail has cut its overall advertising and marketing budget from £80 million in 2002. "We want a simplified approach and can probably get more for less with a more integrated strategy," Rich said. "We need value, as Royal Mail is in a recovery phase."

He added: "I want a higher input into our marketing strategy from our suppliers. Disciplines have had separate rosters but now we hope agencies can pitch for one or more of those functions, and maybe offer a combined pitch with other agencies."

Other agencies affected by the review include Claydon Heeley Jones Mason, Joshua, Reef, Proximity London and Rufus Leonard. Media planning and buying, held by Carat UK, is unaffected.

Rich will chair Royal Mail's review team alongside Paul Troy, the head of marketing services.