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Political Trends June 2011

Political Trends June 2011



Political Trends, a copy of the presentation delivered by David Thorp, Head of Research, The Chartered Institute of Marketing from the CIM East of England Summer Marketing Conference held on 9 June ...

Political Trends, a copy of the presentation delivered by David Thorp, Head of Research, The Chartered Institute of Marketing from the CIM East of England Summer Marketing Conference held on 9 June 2011 at ARU, Chelmsford



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    Political Trends June 2011 Political Trends June 2011 Presentation Transcript

    • How has the marketing landscapechanged under theCoalition Government?David ThorpDirector of Research & Professional DevelopmentThe Chartered Institute of Marketing
    • The Marketing Landscape
    • The Marketing LandscapeMethodology• From a round table of seniormarketing figures in centralGovernment• Views and opinions are CIM’s• Constructively critical
    • The Marketing LandscapeWhat the paper considers • The issues – why Government should spend money on marketing at all • Evidence of Government marketing working • Issues of measurement
    • The Marketing LandscapeFuture economies• Get supportive stakeholders to help communicate your messages• Partnerships• More dynamic use of social media• Combine campaigns• Greater use of segmentation to target existing resources
    • The Marketing LandscapeTop spenders on TV advertising 2009• P&G: 118 million• HM Government: 99 m• L’Oreal: 90 m• Reckitt Benckiser: 82 m• Unilever: 69 m• Royal Bank of Scotland: 66 m• Kellogg’s: 60 m• Ford: 48 m• Tesco: 40 m• News Corporation: 40 m
    • The Marketing LandscapeGovernment Communications Spend 2009/10Total Spend £1.01 billionSpend on Direct Communications Activity £540 millionSpend on Staffing £329 million
    • The Marketing LandscapePrivate companies make great efforts to ensure that theirmarketing budgets deliver value and they ruthlessly cutthem when it makes sense. Is COI measuring theeffectiveness of government spending on advertising? Doyou think it is money well spent? Paul Sloane on the Marketer blog
    • The Marketing LandscapeThe days of spendingmillions of pounds onexpensive projectsare over Francis Maude MP, Cabinet Office Minister June 2010
    • The Marketing LandscapeA leaner COI is in line with newGovernment priorities…Ourfuture will be grounded incontinuing to deliver excellentcommunications to achieveGovernment aims, in the mostcost-efficient and effective waypossible." Mark Lund quondam Chief Executive, COI June 2010
    • The Marketing LandscapeWhat is COI?• Established in 1946, after the demise of the wartime Ministry of Information, when individual government departments resumed responsibility for information policy.• Created as a non-ministerial department, a status it still holds today.• Is an executive agency of the Cabinet Office and a trading fund.• As a trading fund, COI has no budget of its own.• The budgets for marketing and communication activity sit with the 450 government departments, executive agencies, local authorities and wider public sector bodies which use COI’s services.
    • The Marketing LandscapeThe 2010 Government Spending Review• £32 billion of spending cuts by 2014/15• Departments faced average real terms cuts of 25% over the four years of the Spending Review.• Some departments are facing even greater cuts• Most departments were tasked to outline to the Treasury how they could make cuts of up to 40%.• Cut the cost of running Whitehall by £6 billion• Scrap 490,000 government jobs• Severe impact on COI, which controls most government marketing and communications activity with immediate “big freeze” on marcoms spending as of May 2010.
    • The Marketing Landscape•For all activity costing over £25,000, exemptions must be sought from theEfficiency and Reform Group (ERG) via Matt Tee, permanent secretary forgovernment communications (NB from March 2 2011 the limit went up to£100,000).•For activity costing below £25,000, departmental directors of communicationare responsible for implementing the freeze. (Below £100k from 2.2.11)•Covers advertising and marketing activity across all central governmentdepartments, agencies and non-departmental public bodies•Applies to all paid for new advertising and marketing spend for the remainderof the financial year 2010-11, across all media formats.•Procurement should not begin until an exemption has been granted•ERG says it will benchmark the marketing spend allowed to go ahead this yearbefore forming a baseline against which the freeze is measured for future years.
    • The Marketing Landscape•All departments will have to justify spending on marketing to a group ofsenior cabinet ministers under a new spending review framework•Spending freeze “will take effect immediately and will mean a reductionin the volume of work going through COI until the end of 2010/11financial year”•Freeze spending on all “non-critical” marketing.
    • The Marketing LandscapeWhat does this mean for marketers ingovernment?1. Marketing Job Losses Since the freeze COI has lost 287 staff (40% of its workforce) Probability is significantly more jobs will be lost over the next 3 years
    • The Marketing LandscapeWhat does this mean for marketers ingovernment?2. Strategic Marketing Advisory Board Scrapped The body, replaced the Advisory Committee On Advertising in 2008 and was established to ensure the efficiency of government marketing activity. The duties of the body have been taken on by the Cabinet Offices Efficiency and Reform Group (ERG), which must approve any campaign costing more than £25,000. (£100k from March 2nd 2011)
    • The Marketing LandscapeWhat does this mean for marketers ingovernment?3. Cross-departmental Working Mainly affected departments with smaller marketing teams, such as the Department for Communities and Local Government, which employed nine full-time marketing executives.
    • The Marketing LandscapeWhat does this mean for marketers ingovernment?4. Cutbacks at the BBC Impact Marketing There BBC takes responsibility for funding the World Service and BBC Monitor, as well as part-funding S4C. This saves £340m per year for the Treasury by 2014-15 but saddles the cost on the BBC. When coupled with a six-year freezing of the Licence Fee, this amounts to a 16% cut for the Corporation.
    • The Marketing LandscapeWhat does this mean for marketers ingovernment?5. Bonfire of the Quangos Despite London 2012 approaching, Osborne opted to cut the budget for UK tourism bodies VisitBritain and VisitEngland by 34% over a four-year-period. Christopher Rodrigues, the chairman of VisitBritain, said it would cut overseas marketing offices and moving more promotional work online.
    • The Marketing LandscapeA government spokesperson says…“…the raising of the thresholdis an attempt to put in place"sustainable measures", which willlast until the end of thespending review period in 2015…The initial controls were short,sharp, shock measures designedto put a quick curb on spending."
    • The Marketing LandscapeTowards a new dawn for governmentmarketing and communications• March 2011 Review of Government Direct Communication and the Role of COI• Prepared by Matt Tee, Permanent Secretary for Government Communication Scope is “those parts of government communication…currently covered by the marketing and advertising freeze and to consider the role of the COI”
    • The Marketing LandscapeOn many occasions in the past, sothat we were in control of thecommunication, and because wehad the money to do it, ourapproach was “how cangovernment achieve this?”. Infuture we will start from apresumption that others may bebetter placed to achieve our goals,often working in partnership withus. Matt Tee quondam Permanent Sec. for Government Communications March 2011
    • The Marketing LandscapeThe Review: What Does it Mean forGovernment Marketing?• The Government will look first at partnerships with the private sector and trade bodies when producing marketing and communication campaigns in the future as it looks to reduce spending.• The COI is to be replaced by Government Communication Centre (GCC)• The Governments big society approach will have a significant impact on how they achieve their communication objectives.• Some organisations and departments will recognise that they cannot sustain full communication functions and will look to share services.
    • The Marketing LandscapeThe Review: What Does it Mean forGovernment Marketing?• There is a need to "exploit" the "significant media holdings" owned by Government to deliver marketing campaigns, including on Government websites.
    • The Marketing LandscapeI also conclude that governmentdirect communication will be moreeffective if a more strategicapproach is taken where activity isconcentrated in fewer areas offocus and target audiences forcampaigns are clearly identified,so that government is notunwittingly aiming multiplemessages at the same audiences
    • The Marketing LandscapeTee’s example: Britain in the World• FCO looking after Britain’s interests abroad;• BIS encouraging inward investment into Britain;• DFID providing international aid and support;• MoD looking after Britain’s security; and• No. 10 on international leadership and reputation. “The result would be fewer but clearer, more focused activities, which avoid duplication and the bombardment of multiple, fragmented messages to key audiences and partners. “
    • The Marketing Landscape A key strand of a different approach to direct communication will be to recognise that, for many of our objectives and audiences, other organisations, or brands, will already have strong relationships with the people we seek to reach. Many of these organisations, which may be commercial, voluntary or civic sector, recognise our goals and are prepared, indeed keen, to work with government on achieving them.Fast food cave-in: Coalitionstrikes deal with Coca-Cola andMcDonalds to fight obesity... butlets them regulate themselves Daily Mail: 1 st December 2010
    • The Marketing Landscape• Involves real partnership, not an assumption that partners will pay for government advertising.• Government must recognise that partners have objectives and imperatives that may not entirely align with government’s, for example profit.• Big brands are tired of multiple approaches from government and a lack of clarity about the Government’s priorities.• Government has few people who are skilled and experienced in this sort of partnership working.• If the partnerships are to go beyond the ad hoc and tactical, government needs to plan as far ahead as its partners – at least 12 months and probably 18 months.
    • The Marketing LandscapeThere is significant potential to askagencies, media owners,government and voluntary andcommunity organisations to worktogether for free or near free oncampaigns for the common good,
    • The Marketing LandscapeIntroducingThe Common Good Communication Council• media owners and broadcasters were very wary of any impression that they would carry ‘government messaging’, feeling that this would undermine their independence.• Common Good Communication Council, separate from but supported by government.• Council could agree the parameters of such a scheme; ensure propriety; and invite bids from the voluntary and community sectors and government for this sort of work.
    • The Marketing LandscapeIn a NutshellKey findings of the Review• Government policy envisages fewer but more effective communications with a greater role for partners, both civic and commercial.• Government communication budgets and staff numbers will be smaller• Establishment of a Government Communications Centre (GCC) to replace COI• Expanded role for Efficiency and Reform Group (ERG)• Payment by results to become a key part of govt. communications contracts in 2011/12
    • The Marketing LandscapeIn a NutshellKey findings of the Review• Three people will be appointed with "experience of and high credibility in the communications industries” to form a new Government Communication Oversight Panel
    • The Marketing LandscapeEfficiency and Reform Group (ERG) In addition to current criteria, consider whether the proposal meets best practice for: alignment with government strategy and priorities; use of insight to develop the proposal; partnership; evaluation and return on investment; minimising spend; appropriate use of channels; and a payment by results approach.
    • The Marketing LandscapeDuring 2011/12 the GCC should…• develop the Government’s marketing strategy;• decide under what themes activity should be brigaded;• confirm the size and functions of the GCC;• scope the size and role of the theme teams and decide where they are best hosted;• identify the staff to be aggregated from departments, and the GCC and ensure that the best staff are in the right jobs.
    • The Marketing LandscapeWhat might be wrong with this?• From COI to GCC to CGCC to GCOP to ERG to• Invites Whitehall in-fighting• Departments would be forced to give up their advertising and marketing staff to be based within the central GCC• Do the maths… 1,940 - Current number of comms people across government 1,000 - Planned reduction of comms headcount across government 150 - Number of staff in proposed Government Comms Centre
    • The Marketing LandscapeOn the positive side…• a more strategic, concentrated and targeted approach to planning and allocating the government’s £1bn marketing and communications budget (Up to this point, such spending has been split evenly between the COI and individual departments)• Shift towards digital• Closer linkage to government priorities
    • The Marketing LandscapeAnd what does the boss say…?I am grateful to Matt for the workthat has gone into this report. Iwill discuss therecommendations withministerial colleagues and thegovernment will publish a fullresponse in due course.
    • The Marketing LandscapeHow did we do?• Get supportive stakeholders to help communicate your messages• Partnerships• More dynamic use of social media• Combine campaigns• Greater use of segmentation to target existing resources
    • The Marketing LandscapeThe Social Marketing Group• Formed in August 2009• To promote marketing excellence in this sector.• To promote greater understanding of social marketing and its application as a force for social cohesion, change and delivering the public good.• To inform members of changes in the marketing environment and their implications and promote high, professional marketing standards.
    • Thank you David ThorpDirector of Research & Professional Development The Chartered Institute of Marketing