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

1. How has the marketing landscape
changed under the
Coalition Government?
David Thorp
Director of Research & Professional Development
The Chartered Institute of Marketing

2. The Marketing Landscape

3. The Marketing Landscape
Methodology
• From a round table of senior
marketing figures in central
Government
• Views and opinions are CIM’s
• Constructively critical

4. The Marketing Landscape
What the paper considers
• The issues – why Government
should spend money on
marketing at all
• Evidence of Government
marketing working
• Issues of measurement

5. The Marketing Landscape
Future 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

6. The Marketing Landscape
Top 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

7. The Marketing Landscape
Government Communications Spend 2009/10
Total Spend
£1.01 billion
Spend on Direct Communications Activity
£540 million
Spend on Staffing
£329 million

8. The Marketing Landscape
Private companies make great efforts to ensure that their
marketing budgets deliver value and they ruthlessly cut
them when it makes sense. Is COI measuring the
effectiveness of government spending on advertising? Do
you think it is money well spent?
Paul Sloane
on the Marketer blog

9. The Marketing Landscape
The days of spending
millions of pounds on
expensive projects
are over
Francis Maude MP,
Cabinet Office Minister
June 2010

10. The Marketing Landscape
A leaner COI is in line with new
Government priorities…Our
future will be grounded in
continuing to deliver excellent
communications to achieve
Government aims, in the most
cost-efficient and effective way
possible."
Mark Lund
quondam Chief Executive,
COI
June 2010

11. The Marketing Landscape
What 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.

12. The Marketing Landscape
The 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.

13. The Marketing Landscape
•For all activity costing over £25,000, exemptions must be sought from the
Efficiency and Reform Group (ERG) via Matt Tee, permanent secretary for
government communications (NB from March 2 2011 the limit went up to
£100,000).
•For activity costing below £25,000, departmental directors of communication
are responsible for implementing the freeze. (Below £100k from 2.2.11)
•Covers advertising and marketing activity across all central government
departments, agencies and non-departmental public bodies
•Applies to all paid for new advertising and marketing spend for the remainder
of 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 year
before forming a baseline against which the freeze is measured for future years.

14. The Marketing Landscape
•All departments will have to justify spending on marketing to a group of
senior cabinet ministers under a new spending review framework
•Spending freeze “will take effect immediately and will mean a reduction
in the volume of work going through COI until the end of 2010/11
financial year”
•Freeze spending on all “non-critical” marketing.

15. The Marketing Landscape
What does this mean for marketers in
government?
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

16. The Marketing Landscape
What does this mean for marketers in
government?
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 Office's Efficiency and Reform Group (ERG),
which must approve any campaign costing more than
£25,000. (£100k from March 2nd 2011)

17. The Marketing Landscape
What does this mean for marketers in
government?
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.

18. The Marketing Landscape
What does this mean for marketers in
government?
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.

19. The Marketing Landscape
What does this mean for marketers in
government?
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.

20. The Marketing Landscape
A government spokesperson says…
“…the raising of the threshold
is an attempt to put in place
"sustainable measures", which will
last until the end of the
spending review period in 2015…
The initial controls were short,
sharp, shock measures designed
to put a quick curb on spending."

21. The Marketing Landscape
Towards a new dawn for government
marketing 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”

22. The Marketing Landscape
On many occasions in the past, so
that we were in control of the
communication, and because we
had the money to do it, our
approach was “how can
government achieve this?”. In
future we will start from a
presumption that others may be
better placed to achieve our goals,
often working in partnership with
us.
Matt Tee
quondam Permanent Sec. for Government Communications
March 2011

23. The Marketing Landscape
The Review: What Does it Mean for
Government 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 Government's '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.

24. The Marketing Landscape
The Review: What Does it Mean for
Government Marketing?
• There is a need to "exploit" the "significant media
holdings" owned by Government to deliver marketing
campaigns, including on Government websites.

25. The Marketing Landscape
I also conclude that government
direct communication will be more
effective if a more strategic
approach is taken where activity is
concentrated in fewer areas of
focus and target audiences for
campaigns are clearly identified,
so that government is not
unwittingly aiming multiple
messages at the same audiences

26. The Marketing Landscape
Tee’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. “

27. 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: Coalition
strikes deal with Coca-Cola and
McDonald's to fight obesity... but
lets them regulate themselves Daily Mail: 1 st December 2010

28. 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.

29. The Marketing Landscape
There is significant potential to ask
agencies, media owners,
government and voluntary and
community organisations to work
together for free or near free on
campaigns for the common good,

30. The Marketing Landscape
Introducing
The 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.

31. The Marketing Landscape
In a Nutshell
Key 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

32. The Marketing Landscape
In a Nutshell
Key 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

33. The Marketing Landscape
Efficiency 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.

34. The Marketing Landscape
During 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.

35. The Marketing Landscape
What 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

36. The Marketing Landscape
On 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

37. The Marketing Landscape
And what does the boss say…?
I am grateful to Matt for the work
that has gone into this report. I
will discuss the
recommendations with
ministerial colleagues and the
government will publish a full
response in due course.

38. The Marketing Landscape
How 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

39. The Marketing Landscape
The 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.

40. Thank you
David Thorp
Director of Research & Professional Development
The Chartered Institute of Marketing