DTLR seeks better value away from COI

The DTLR announced last week that it was bypassing COI and creating its own agency roster. Can it expect to wield the same media buying clout with its £20m as COI does with a budget of nearly £200m?

A sense of unease is likely to have been brought to COI Communications (COI), its advertising agencies and other Government departments, with the revelation that there is a rebel in their midst.

Close on the heels of COI’s roster review, the decision by the Department of Transport, Local Government and the Regions (DTLR) to appoint its own roster of agencies (MW last week) – independently from COI – has taken many by surprise.

The move also comes at a time when the consensus among agency insiders is that under the leadership of Carol Fisher, COI has finally got its act together.

Government departments and organisations, such as National Savings and the Food Standards Agency – which have previously steered clear of COI, preferring to handle their own communications arrangements – now use its services.

One advertising agency insider says: “From an agency’s point of view Fisher has made it better and more professional. It is no longer just a cosy winding down operation for retiring civil servants, it is much more respected.”

Institute of Practitioners in Advertising president Bruce Haines agrees that COI has simplified the process of doing business with Government departments for agencies, and questions the DTLR’s decision to avoid COI: “For a major Government department to do this so soon after COI’s tendering process seems completely pointless,” he says.

The DTLR’s responsibilities include road safety, planning, local transport and fire safety. Its main agencies are Abbott Mead Vickers.BBDO, Euro RSCG Wnek Gosper, D’Arcy and MediaVest.

AMV.BBDO managing director Cilla Snowball says the agency received the news “with mixed feelings”. She adds: “Overall there is a sense of optimism because AMV.BBDO has done some great work for the DTLR and is very committed to what it is doing.”

But insiders say that many COI agencies are “furious” that the DTLR has decided to re-tender its business only three months after COI reviewed its creative and media planning rosters.

The DTLR’s head of marketing and corporate communications Charles Skinner will oversee the review. A former COI employee (he was director of film, TV and radio in the late Eighties) Skinner was head of publicity at the Home Office before moving two years ago to the Department of the Environment, Transport, and the Regions, as the DTLR was then known.

He has taken on the role of DTLR head of communications on a temporary basis, after the departure of Alun Evans – who left in a blaze of publicity just over two months ago. Newspaper reports at the time claimed that Evans was forced out of his job by disgraced spin doctor Jo Moore for refusing to take part in a smear campaign against Ken Livingston’s Tube chief Bob Kiley.

Skinner claims that the process to establish a DTLR roster was set in motion while Evans was still in his post. He insists that there is “nothing unusual” about the move and it is merely a “natural progression” as the DTLR already has its own rosters for services such as design, print buying and market research.

Skinner says: “As a department the DTLR is very experienced at handling advertising campaigns and communication strategies. The DTLR writes its own briefs, works closely with agencies and evaluates the work, so it will be continuing what it does anyway.”

He adds the move has been favourably received by the DTLR’s agencies. “Being on the COI roster does not guarantee agencies work, as they almost invariably have to pitch against others whenever a department uses COI.”

One insider says: “Charles Skinner is a very experienced marketer. He has a good grasp of the issues, is very senior and very hard working. I get the feeling that he knows what he is doing.”

The question is whether other departments will follow the DTLR’s lead and bypass COI. One agency source describes the department’s move as “dropping a bulldozer in the middle of a pond, it is bound to cause a few ripples”.

But the proof of the pudding will be in the eating. If the DTLR is seen to be handling the tendering process well and is able to negotiate favourable media deals for its campaigns, other departments may begin to question the benefits of going through a third party.

However, many believe that without COI’s financial muscle, the DTLR will not be able to wield the same negotiating power when it comes to media buying. The COI’s annual report, published in July this year, reveals that the Government’s annual ad spend was &£192m for the year to March 2001 – an increase of almost 70 per cent compared with the previous year.

Another agency source says: “Is the DTLR likely to get better value for its media buying by taking its money out of the Government pot? Even if it spends the &£20m it claims it is, that is a small portion of the &£200m COI spends.”

Skinner himself admits that the DTLR is “testing the market” and may have to rethink its arrangements if it is not cost-effective.

COI director of client services Ian Hamilton says: “One of the things that COI has been tightening up is the media planning and media buying, and I would be surprised if the DTLR could get anywhere near the deals that COI gets.”

But one media agency source suggests the DTLR may find it is an advantage to take the matter into its own hands as, although COI’s is a huge account, it separates media planning from buying and uses different agencies for different media.

Carat managing director Colin Mills agrees: “To split responsibility both by media, and strategy from buying, must work against producing the best media product. Maybe, in the current market, the DTLR will get better media value as a consequence of the review.”

While publicly all agencies speak highly about COI, privately they have conflicting views about its importance. Some envisage a state of chaos if other departments break free, while others believe it would make more sense for agencies to deal directly with departments that have communications experience.

“It is difficult for agencies to build a long-term relationship with COI,” says one agency source. “It is very much a supplier relationship and you do not get a feeling for how COI is getting on with individual departments.”

If the DTLR finds that its move is more cost-effective than using COI, then the onus will be on the latter to justify itself.

Comments

    Leave a comment