Royal Mail to slash marketing budget

LONDON - Royal Mail is looking for more integrated agency support as it reviews its entire agency roster in a move that could see its marketing budget slashed by as much as £30m.

The Royal Mail currently spends around £80m on marketing and advertising, and it said today that it will cut this to between £60m and £50m.

The postal operator currently has around 46 agencies on its roster and says it plans to cut this number significantly. The review will affect all agencies except its media planning and buying business, which is held by Carat. It excludes contracts for the Post Office and Parcelforce Worldwide.

Royal Mail says it aims to slash the number of agencies on its roster by inviting the incumbents and other non-roster agencies to repitch with a brief to providing a more integrated service. There will be no automatic selection for incumbents, the company said in a statement.

Royal Mail marketing director Paul Rich said: "We are streamlining the company as part of our ambitious recovery plans. In an increasingly competitive marketplace, we need to focus on how we reach customers in our core markets and we need world-class agencies to support us."

Incumbents have already been informed and the tender notice was sent out for publication in the Official Journal earlier this week. Once published, the notice will also be posted on Royal Mail's website at royalmailgroup.com. The deadline for applications from interested agencies is March 7.

The review comes as the company continues its strategy to find ways to cut costs. It has already combined its sales and marketing divisions and axed 100 jobs.

"The aim of this review is to simplify the agency management process, deliver better value for money and increase the effectiveness across all marketing disciplines," Rich said.

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