A new report says the advertising industry will lose out under a Labour
government, writes Katharine Raymond
In 1979 the Tories won an election with the help of Saatchi & Saatchi’s
‘Labour Isn’t Working’ advertising campaign. In 1996 the Tories used
posters to depict Labour’s Tony Blair as the devil. As it approaches the
general election, New Labour may well be asking itself: ‘What has the
advertising industry ever done for us?’ Could this be payback time?
According to The Devil’s in the Details, a new report by Ogilvy & Mather
on how Labour policies may affect the marketing industry, advertising
could be in for a hard time. It is one of the losers identified in the
report, whose authors, Simeon Duckworth and David Muir (pictured), argue
that increased media fragmentation and tougher legislation will divert a
lot of expenditure away from above-the-line media.
Nigel Griffiths MP, once Labour’s City spokesman and now the party’s
consumer affairs expert, is dismissive of claims that the marketing and
advertising industry is in for a hard time under Blair. ‘It’s ludicrous
to say that advertising agencies will lose out under a Labour
government. I’ve met with 20 different large agencies and not one of
them has expressed any fears on that score.’
Interestingly, Griffiths says O&M has not been one of the agencies
banging on his door. ‘O&M hasn’t approached me or attempted to arrange a
meeting with me.’
The report does conclude that Labour’s macroeconomic policies will not
have an adverse effect on business in general, but Muir stresses the
need to read the small print. ‘In the past you could predict how Labour
would act because of its strong ideological anchor. That anchor has
slipped, so it is harder to predict. That’s why nuance and detail are
According to Muir, an example of this ‘nuance’ is Labour’s belief in
markets. ‘Markets are generally a good thing, but some require more
government involvement than others. Some, like advertising, will be
reined back.’ A major reason for thinking that Labour will get tough on
advertising is its voter-friendly pledge to ban tobacco advertising.
Muir warns that a UK ban is likely to trigger a pan-European ban as the
balance of votes in Brussels tips in favour of the anti-tobacco lobby.
As well as spelling disaster for agencies with pan-European tobacco
accounts, this would set a crucial ideological precedent. Advertising to
children could be the next to go under the spotlight, followed by
financial services and utilities.
Winston Fletcher, chairman of the Advertising Association, shares this
view. The problem, he points out, is that as soon as tobacco advertising
is banned, the many pressure groups anxious to ban other sectors of
advertising will ‘smell blood’. Griffiths disagrees: ‘Nonsense. A Labour
government certainly means bad news for the tobacco industry, but it
certainly does not mean bad news for the advertising industry or for
David Pugh, commercial director for Mills & Allen, shrugs off the
suggestion that the loss of revenue from tobacco advertising will badly
affect the poster companies. ‘Labour is making far more pro-business
noises than ever before,’ he says.
‘If this was happening ten years ago, when tobacco advertising made up
25% of our revenue, I would have been a worried man. But now tobacco is
between just 8% and 9%. Seventy-five percent of the top 200 advertisers
use posters; five years ago it was only 35%. Posters are doing very well
generally and that trend will continue.’
According to Pugh, the increased fragmentation of television has also
helped to make posters more attractive. ‘The more competition there is
between the television companies, the better it is for us. Television
advertising will become a targeted, niche market. Everyone gets to see
posters and companies realise that.’
But what about the rest of the industry? ‘One can only speculate, but
Labour is making the right noises. The industry is generally very good
at self-regulation, and Labour appears to recognise that. One can’t tell
yet, but I don’t really think the industry has anything to fear,’ says
Dr Lewis Moonie MP, broadcasting spokesman for Labour, admits that a new
communications policy - a key part of New Labour’s manifesto - means
that ITV and Channel 4 will have to ‘work harder to keep advertisers’,
and ad spending certainly ‘won’t go up’. But he points out that
companies will continue to want high quality advertisements on high
quality channels. ‘Television companies will need to retain viewers in
order to attract advertisers, so overall quality will be good,’ he says.
Suggestions that Labour will increase the regulation of television by
introducing a ‘clearing house’ to check advertising copy before it is
broadcast is dismissed by both Moonie and Griffiths. ‘I see no reason
why advertisers should be treated any differently from programme makers
in that respect,’ says Moonie. ‘Standards and controls are already very
reasonable and the idea of creating a clearing house for ads is
nonsense. We already have more than enough regulation. I want to see it
simplified, not added to.’
Griffiths has already said that the Advertising Standards Authority will
be given more power under a Labour government, allowing it to impose
fines on ‘bad’ advertisers and repeat offenders. David Pugh believes
that it is a sensible move to ‘give the ASA more teeth’.
Despite recent complaints that the ASA is losing credibility, it is
still perceived by many as being the best way of ensuring standards are
adhered to. Direct government involvement is the only alternative and is
the least popular. As Griffiths points out: ‘By strengthening the ASA
we’re giving it another arrow to the quiver. It is the ASA, not the
government, that regulates advertising; it is not government that can
expel an agency or refer it to the director-general. This is self
Others are concerned that Labour will get tough on alcopops, currently
the fastest growing alcohol section. ‘Not if we can help it, and not if
brewers are able to regulate themselves,’ says Griffiths. Brewers and
distillers have already widened their code of conduct on marketing to
young consumers which includes guidelines on the marketing, naming, and
promotion of alcoholic drinks to prevent them being aimed at underage
‘Labour wants this voluntary code to work,’ says Griffiths. ‘If it
doesn’t, then I will take action. If the industry cannot regulate
itself, the government will step in. But that would be, from the
industry’s point of view, an admission of failure; it would show a lack
of self-discipline. They don’t want that either.’
But there is one thing that New Labour may well be really tough on.
Griffiths has been inviting - and receiving - submissions for some time
on introducing legislation that would make it extremely difficult for
own-label products such as Sainsbury’s cola to imitate brands like Coke.
Labour has not made a decision, but Griffiths admits to being
sympathetic to the view that lookalike products are unfair. As he points
out, he has had countless representations from companies on the subject.
None, as yet, have come from the supermarkets.
However, as Muir argues, a ‘get tough on copycats’ policy does not fit
in with Labour’s aggressively pro-competition stance. Competition, it
argues, stimulates innovation and is best for the consumer. Own-label is
seen by Labour as increasing choice and representing value for money. It
also allows the retailers to be more competitive. So, even if new
legislation to make copying harder is introduced, brands may find life a
little harder under Labour.
How we compare in Europe
If Tony Blair does get tougher on advertising, what precedents have been
set in the rest of Europe?
A recent document published by the EC, which details current
restrictions in force throughout Europe, makes for interesting, if
rather confusing, reading.
The EC is keen to bring differences in national policy into line on the
grounds that the different rulings across 14 countries are confusing to
Cold-call selling is banned (creating a problem not just for double-
glazing salesmen, but for the political parties). Advertising that may
induce children to smoke is outlawed and food advertising must include
All promotional gifts are banned, as is alcohol sponsorship of sport.
Nudity is still the most controversial issue. A recent French ad for
Perrier which showed three topless women wearing Perrier caps, was met
with disgust. The Italians objected to a poster featuring the wife of
European Commissioner Carlo Ripa di Meana posing naked for an
International Fund for Animal Welfare ad, which used the line ‘This is
the only fur I am prepared to wear’.
Despite its reputation for ‘social’ liberalism, use of the female body
in advertising is strictly controlled, as is the content of TV
commercials for alcohol. Tobacco advertising on TV is banned in all EC
countries, and only Britain and Spain permit radio advertisements.
As in Germany, certain types of toys cannot be advertised, while alcohol
can only be advertised in the press.
Naturally, advertisers are as eager to prevent harmonising of rules
across Europe as the Commission is to impose them. According to the pan-
European self-regulatory body, the European Advertising Standards
Alliance, harmonisation of standards would conflict with economic and
cultural differences - such as attitudes to religion or sex - that exist
in different countries.
Rober Halfon, head of research for Market Access, a UK-based
international political consultancy, says the EC is trying to impose
unnecessary regulation: ‘We want a Europe of diversity, not of
uniformity. Advertising is part of a nation’s identity and if separate
countries are happy with their systems and regulations, why on earth