Watch and learn as the COI goes advertising cold turkey

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What happens to a campaign when funding is permanently cut? The Government’s COI ad freeze will reveal all.

About the same time as this edition of Marketing Week lands on your desk, the Chancellor will set out the Government’s four-year public spending plans in the comprehensive spending review (CSR). The CSR’s usual Treasury-led process to allocate resources across all government departments has been overtaken this year by the Coalition’s imperative to save a whopping £83bn along the way.

How this review turns out will have profound implications for businesses and citizens across the country. Alongside the multiple discussions about tuition fees, universal child benefit and defence cuts, there will be deep cutbacks in government advertising and media planning.

A year ago, the Central Office of Information (COI) spent more than £220m on advertising – everything from high-profile campaigns such as Change4Life and the Frank anti-drug campaign, to army recruitment and blood donation. Now a huge central resource of almost 800 marketers will be cut back, with 40% of COI staff expected to lose their jobs. Everyone’s role is under review, from the CEO down.

At the same time, M4C, the WPP agency established in the spring as a dedicated vehicle to handle the COI’s business, has been stillborn. However clear its ambitions, a media agency start-up can’t function without billings; while media players have had to scramble to grow revenues from a client base shorn of government spending.

All this is traumatic enough – especially for the marketers caught up in the middle – but in terms of brand spending, we are experiencing the greatest live marketing case study in brand history.

The COI was the media sector’s biggest client in 2009. Since then, spending has declined by a third in the past six months compared with a year ago – about £39m of lost spending. These are extraordinary numbers – that’s a decline that adds up to the entire annual media spend of category stalwarts such as British Airways, Domino’s Pizza and Weetabix combined. Since then, that COI spend has reduced again to almost nothing in the past few weeks. Zip. Nada. This is not a slight reduction; it’s a complete freeze. This is unprecedented.

However, out of the ashes of those abandoned COI media plans comes the phoenix of unprecedented learning. No self-respecting consumer brand – competing for retailer attention and user share of voice ­could ever dream of going cold turkey on all its adspend. It would be commercial suicide (or at least all of us in the media industry would like to think so). But now the COI is doing just that. So, while we may not be able to answer Lord Leverhulme’s question about which half of ad spend works, we will at least see some startling results about the overall effect of full-on advertising versus no advertising.

The COI was the media sector’s biggest client in 2009. Since then, spending has declined by a third in the past six months compared with a year ago – about £39m of lost spending… Since then, COI spend has reduced again to almost nothing in the past few weeks. Zip. Nada. This is not a slight reduction; it’s a complete freeze.

For example, we’ll learn whether adstock is a real market effect; does the cumulative weight and impact of sustained government campaigns hold steady even when advertising is withdrawn (for example, what will happen on the numbers of people quitting smoking); and we’ll learn how quickly there is attrition in the take-up of schemes recruiting army cadets or blood donors. We’ll understand what sort of activity stops dead without the oxygen of advertising (perhaps like the uptake of testing for chlamydia) and in what areas no one can spot the difference.

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Army recruitment: Will ad cuts lead to fewer recruits?

This could be an extraordinary archive for marketers to mine for marketing insight, especially as the COI’s advertising effectiveness learning is acknowledged as being second to none. Perhaps the best thing the COI could do for the industry is agree to turn over its research to help the whole sector understand the long-term case studies that this unique collapse in spending will generate. Surely the Freedom of Information Act should extend to ROI information about the Government’s huge marketing investment over the past 13 years?

One thing we can definitely assume: the wider ad industry will understand and appreciate its value far more than Francis Maude MP, or the bean counters in the Cabinet Office.

Another, of course, is that the media landscape from now will be changed for ever. The COI will be leaner; M4C will be smaller and even the BBC will be faced with the unpalatable and editorially compromised possibility of running government ad campaigns – the first step on a steep and slippery commercial slope to privatisation.

Most of all, no one expects government spending to return to pre-recession levels. A permanent change will subtly alter the relationship between government, agency and media owner. Of course, everyone will still want a piece of this showcase account, but the jam will be spread more thinly and the COI will neither bankroll nor be subsidised by media businesses any longer.

And, while it may not seem like it at the moment, in the long term, that will probably be a change for the better for everybody.

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