As the coalition government draws closer to its one-year anniversary next month, Whitehall marketing teeters nervously on the cusp of a fresh age of communications. Since the general election last May, efficiency measures have been put in place aimed at slashing government adspend, which had ballooned under Labour. Once the UK's biggest-spending advertiser, the COI now ranks sixth, according to latest figures from Nielsen. It has shed 40% of its staff and chief executive Mark Lund is set to leave.
The COI's colossal adspend - £270m in 2009, according to Nielsen - has been viewed with contempt by the Conservative Party. During its spell in opposition, much energy was devoted to denouncing Labour for dedicating so much of taxpayers' money to 'propaganda' or 'nanny-stateism'.
Despite this backdrop, few predicted change on the scale that is now happening. One senior COI insider says: 'Ideologically, there has been a massive switch of sentiment. I knew things would change but I didn't anticipate the severity, perhaps because there hadn't been a change of government for 13 years.'
The culmination of this approach is the Cabinet Office report put together by the outgoing permanent secretary for government communications Matt Tee, who was commissioned to lead a review of government communication and the role of the COI. As Marketing went to press, ministers were still mulling over the findings of the 158-page document, but, given that the report is so closely aligned with current thinking, most commentators expect its core recommendations to be adopted.
The proposed shake-up is a perfect microcosm of the government's over-arching philosophy of shrinking the state to lessen its presence in the lives of citizens, and cost-cutting to reduce the deficit.
Coursing through the report is a desire to spend less money and proposals involve 'partners' to deliver government aims. It provides a number of ideas, the most significant being replacing the COI with a Government Communication Centre (GCC), centralising marketers into six teams based on government priorities such as health, and a 'common-good communications council', which would link up agencies, media owners and voluntary organisations to fund government ads for free.
One of the major upheavals will be the creation of the 'theme' teams. Tees claims these will result in a focus on audience, meaning fewer but clearer activities that avoid duplication and fragmentation.
M&C Saatchi group chief executive Tim Duffy supports the idea. 'It's quite radical but there's nothing wrong with that. It acknowledges that communications isn't quite as neat as the splits in government departments,' he says.
However, Alan Gilmour, brand and CRM director at agency Cogent Elliot, is wary of the 'theme' proposal. A former marketing director of the Identity and Passport Service, he says: 'Accountability for delivering the six themes would lie with GCC, but departments would also have accountabilities that might not fit within the themes.'
He adds: 'Having worked in large companies with centralised marketing as is proposed here, there is a constant tension between the centre and the business units (government departments) and no matter how they try, these are never fully aligned.'
Improving effectiveness through better evaluation and insight, plus a 'relentless' focus on value for money and return on marketing investment are also highlighted as key aims. 'In the new world there will be a rigorous focus on ROI and asking whether there is a clear line of sight on what we're doing and the outcomes we expect,' says one director-level Whitehall marketer.
Proving effectiveness is nothing new to the COI, which uses a range of measures including the much-lauded Artemis tool to track campaign performance from response through to behavioural change.
However, Paul Brewer, formerly head of marketing at the Department of Health, who this week joined ActionAid, says a focus on ROI has been increased over the past year. 'We're trying to be predictive as well as analytical to determine outcomes,' he says, adding that the recent drive to form more partnerships with brands, such as the Change4Life campaign linking with Asda and News International, gives government access to hard data from third parties.
Nick Davies, managing director of retail marketing agency EMO, which runs Department of Health anti-smoking campaigns, says his work offers a glimpse of what the future holds for government communications.
Localism is the order of the day, says Davies. In a bid to cut illicit tobacco sales, EMO created a website where people could pledge to tackle the problem in their area. The EMO also gave face-to-face advice to people in the community. This created an 'event', which was deemed newsworthy enough to be covered by the regional media, amplifying the message for free.
Many commentators say that the 'good old days' of the COI have run their course. One sums up the Labour era as being tainted with an 'irrational exuberance' for marketing. 'The attitude was sometimes, "we can do it, so let's do it". It will now run more like a corporate whole.'
Amanda Mackenzie, chief marketing and communications officer of insurer Aviva, participated in a roundtable alongside the likes of WPP chief executive Martin Sorrell as part of Tee's review.
She believes the proposals are 'sensible', highlighting the GCC's closer ties with central government compared with the COI. However, she wonders whether the impact of cutting marketing spend will be measured. 'You would have to be foolish to walk away from the body of learning that the COI has built up over the years,' she adds.
In the rush to map out a fresh direction for marketing, this could very well end up being the case.
WHAT IT MEANS FOR AGENCIES
A plan to implement a pay-by-results (PBR) regime for agencies has received a mixed reception from adland. However, given that COI campaigns have won a host of IPA Advertising Effectiveness awards, some are upbeat about PBR. Outgoing IPA director-general Hamish Pringle supports the idea 'as long as it's not a cover story for discounted margins'.
However, one government marketer believes the PBR plans will be 'kicked into the long grass', arguing that the Cabinet Office's focus will be the massive overhaul involved in setting up the GCC in the first place.
Rumbling away in the background is the much delayed roster review, which aims to move away from a siloed approach to better reflect the integration taking place across the wider industry and media landscape. Despite the reduced budget, the feeling in adland is very much that the government remains a desirable client to have on the books.
WHAT IT MEANS FOR MEDIA OWNERS
Getting media owners on-side is key if the government is to turn some of its 'Big Society' plans, which rely on their goodwill, into reality. The vast majority of references to media owners in Tee's report centre on them giving away airtime or space.
The Common Good Communication Council, for example, will founder unless media owners can be persuaded to give up their advertising space for free. The idea floated earlier this year of a 'community minute' - whereby terrestrial broadcasters, including the BBC, provide a daily free editorial minute as part of Prime Minister David Cameron's Big Society drive - is already testing their civic sensibilities.
The signs are that trouble may be brewing. The report notes in its summation of the consultation responses that 'broadcasters were very wary of any impression that they would carry "government messaging", feeling that this would undermine their independence'.
EXPERT VIEW - RORY SUTHERLAND, VICE-CHAIRMAN, OGILVY GROUP UK
In 1921, following a series of accidents, the Sutton Coldfield Corporation experimented with painting a white line in the centre of a road at Maney Corner. It was a life-saving decision, which has since been adopted everywhere.
Now, even if you are a fanatical libertarian, it is unlikely that you are massively offended by this act of state intervention. Indeed, I would argue that activities of this kind, in effect the provision of information that enables people to voluntarily make better decisions, is one of the few completely inarguable functions of government.
In economic terms, good government advertising is one of few state activities that can be 'Pareto efficient'; that is to say it makes one or more people better off without significantly worsening the outcome for anyone else.
There may be a media cost, true, but this is often trivial compared with the cost of the alternatives (treating car-crash victims, say). Also your media expenditure is not 'wasted', but largely goes toward funding free television, a great public good in itself.
Historically, one of the most important roles of leaders or monarchs was to perform a marketing role through co-ordination, taste-setting or hastening the adoption of new behaviours. Witness Frederick the Great's successful rebranding of the potato, or the endorsement of variolation (an early form of inoculation) by George I in 1722.
Alongside legislation and financial incentives, marketing and nudge theory can be treated as a third, equally valid lever by which to achieve socially desirable outcomes.
So the question remains, why is government marketing activity so limited? It is not through lack of proof - at the last IPA Advertising Effectiveness awards, the COI was conspicuously Britain's most successful advertiser.
One explanation is our natural bias against intangible solutions. Regardless of the costs involved, it is more politically expedient to announce new expenditure on fire engines than to run advertising that stops people starting house-fires in the first place. However, it is also because, until the advent of behavioural economics, marketing lacked the vocabulary and the rigorous scientific framework to make its case to the left-brained people who hold budgets.
GOVERNMENT COMMUNICATIONS FIVE KEY CHANGES
COI to GCC
The 65-year COI name looks set to be ditched in favour of Government Communication Centre (GCC). While some commentators have argued that this is purely cosmetic, outgoing permanent secretary for government communications Matt Tee claims it reflects a 'sufficient change in the way that government approaches direct communication', adding that it signals a clean break from the past.
Unlike the COI, which was an arm's-length body (ALB), the GCC will be a crown corporate service within the Cabinet Office, which will bring it closer to government. The report claims COI's ALB status and its trading-fund model amplifies departmental agendas over cross-government priorities.
A chief marketing officer-style executive director will be at the helm. Industry sources believe the new recruit will be a senior client-side marketer, unlike the previous two COI heads (Mark Lund and Alan Bishop), who were old-school admen.
From departmental marketing to theme teams, involving staff cuts
One of the most radical proposals is to shift marketers out of departments and ALBs into six 'theme teams', grouped around priority areas. Team themes under discussion are: environmental issues; health; safety; security and community; the role of Britain in the world; risky behaviours such as drink-driving; and growth and learning.
While they will be hosted in departments with the closest synergy, marketers in the theme teams will be employees of the GCC.
The report proposes a GCC composed of 150 people, and 480 in the theme teams, with anyone surplus to this 'redeployed or exited'. As this affects about 2000 marketers, mass job losses are inevitable.
A holistic marketing strategy
The quest for joined-up government thinking has been trumpeted for some time, yet there has never been a cross-departmental marketing strategy. Tee's review seeks to remedy this by proposing that the executive director of the GCC creates a marketing strategy for government at the beginning of each Parliament. Under the plan, this would be approved by a new Cabinet sub-committee. Insiders say the advent of the marketing strategy would almost certainly usher in a centralised adspend budget. This would be a departure from the free-spending days of the Labour government, when departments answered only to their relevant ministers.
Greater use of owned media
Public-sector websites such as Directgov, plus job centres and pension slips could soon carry government ads, because using 'owned assets' as media platforms is highlighted as a cost-effective way to speak to the nation. Cabinet Office minister Francis Maude has already lauded this aim in a speech to the 2010 Conservative Party Conference. But the idea of running ads on the BBC - a rumour circulating last year - is conspicuous by its absence in the report.
A specially commissioned COI study claims that by 2013/14 owned assets could carry a media value of £50m if properly exploited. At present, these channels are controlled by departments, which the report claims makes access to them on any strategic level 'exceptionally difficult'.
During the 'bonfire of the quangos' last year as part of the Treasury spending review, the Government Strategic Marketing Advisory Body, a panel of private-sector marketers and their Whitehall peers, who met to discuss publicsector marketing, was axed. A replacement called the Government Communication Oversight Panel is mooted by Tee. This would consist of external communication experts who would report to the Public Administration Select Committee on whether marketing activity is effective, provides value for money and is non-political.
WHAT IT MEANS FOR ADVERTISERS
While this is a coalition government made up of Conservatives and Liberal Democrats, its dealings with brands have the Tory stamp. The self-styled party of business set out its plans for greater involvement of the private sector in government communication when it was in opposition, and has made good this promise on gaining power.
Working in partnership with brands (while scrapping the multimillion-pound media spend earmarked by the Labour government) immediately became a major part of the Change4Life campaign, and this desire shows no sign of abating.
The outgoing permanent secretary for government communications, Matt Tee, envisages moving away from the default position of paid-for communications being seen as the answer to every given communications problem.
Instead, public-sector marketers will be encouraged to consider whether elements of activity could be 'delivered in partnership with commercial or civic organisations that have a strong interest and incentive to get involved'.