Politics: The Labour revolution 10 years on

Savvy marketing drove Tony Blair's Labour to power. A decade on, its next leader will inherit a brand in need of a revamp.

On 23 November 1985 a group of Labour strategists met to discuss the party's future. The mood was bleak. Labour had lost the 1983 election by a landslide and showed no signs of recovery. The strategists, among them high-ranking members of the marketing industry, decided new policies and a fresh approach were required. The response took years to implement, but now, as Labour celebrates 10 years in government, the ramifications of that meeting are still felt.

The party's decade in power is an estimable achievement, and one built on marketing techniques. The 1985 meeting, recounted by Labour strategy and polling supremo Philip Gould in his book The Unfinished Revolution, involved an all-day presentation by Abbott Mead Vickers BBDO and Strategic Research Group of research findings, which, says Gould, 'were the most important of any presented during the period I worked with the Labour Party'.

The research showed a chasm between Labour and its potential voters. The party was still campaigning on a battleground developed in the 40s; in the aspirational 80s, this was no longer relevant. The study also introduced the party to 'Thatcher's children' - young consumers for whom Thatcherite economics and attitudes were the norm.

From there, Gould, Peter Mandelson and others within the party began to guide the repositioning of Labour. The culmination was the 1997 election campaign, when Tony Blair led 'New Labour' - perhaps the most brand-savvy political project in British history - into power. Three general elections later, how effectively has Labour maintained this image? And what shape is it in as Blair prepares to step down?

Labour's brand in 1997 had been crafted to appeal to 'Middle England', the aspirational upper-working and middle class that supported Thatcher but became disillusioned with John Major's government, which could be persuaded to switch to Labour if they thought it reflected their ideas and ideals.

Central to Labour's repositioning was an acceptance of Thatcher's legacy - namely, that the free market was the most efficient creator of wealth. Its key messages were about careful management of the economy and encouraging aspiration, alongside a promise of national renewal. By vowing to invest the proceeds of the market in public services, Blair offered a 'Third Way' between socialism and free-market capitalism.

Key to this process was Blair himself. Much of the repositioning work had been done by 1992, but Labour still lost that year's election badly. Voters' perceptions of Labour had to change. In 1992 they did not trust the party to deliver, but Blair - young, enthusiastic, untainted by past infighting - embodied the new-look party in a way his predecessors could not. An instinctive moderniser, he pushed through the adoption of the New Labour brand name first used at the party's conference in 1994.

Compared with the Major government, dogged by sleaze and internal strife, Blair seemed a breath of fresh air. 'Voters don't look at manifestos in detail - they vote with their gut. In 1992 they saw Labour as wounded,' says Leslie Butterfield, partner at The Ingram Partnership and an adviser to Labour from the 80s until the last election. 'Blair was fundamental. The leader is a symbolic pinnacle of what the party stands for.'

In keeping with the New Labour message, the party's 1997 campaign attacked the economic record of the Tories following 1992's Black Wednesday and promised national renewal, memorably using D:Ream's song Things Can Only Get Better.

Chris Powell, chairman of DDB London, was, like Butterfield, at the 1985 briefing, and advised Labour on marketing until 1997. 'A lot of the advertising effort was put into reminding previous Conservative voters who now intended to vote Labour why they had fallen out with their old party,' he recalls. 'There was no need to convert anyone, but there was a need to bolster the determination of switchers and to provide comfort that Labour wouldn't harm them financially.'

The careful use of focus groups guided much of this process. Qualitative research focusing on the key electoral groups Labour wanted to target (caricatured as 'Mondeo man') had been a key part of the party's turnaround after 1992. Gould conducted one focus group a week in the three years before the 1997 election; during the 1997 campaign he ran six a week. In government, a polling programme allowed ministers to monitor public opinion of policies. The information garnered was restricted to a small circle of MPs and advisers around Blair, underlining the centralised nature of the New Labour project - a tendency that led to accusations of control-freakery.

The other major aspect of Labour's marketing activity was dissemination of information. The practice of media management, or 'spin' as it became known, had begun in opposition as a way to get Labour into the headlines. In office, it became a defining characteristic of the early Blair government. Those responsible for promoting and protecting the Labour brand gained important roles. Off-the-record briefings and leaks - often directed at other members of the government - became commonplace. At the head of it all was Alastair Campbell, who headed the Strategic Communications Unit, set up in 1998 to co-ordinate publicity and news management.

Campbell defended the system in a lecture delivered to The Marketing Society soon after he left the government in 2003. His argument was that government needed to keep up with the demands of a 24/7 media and find ways to communicate to effect political change for the better. 'Politics is never static. The media age has made it even less so,' he said. 'We have to create change or change will be created for us. That's how companies have to operate vis-a-vis their competition. That's how we have to be vis-a-vis ours, be they other parties, political trends or ideas, or the media in a battle for the agenda.'

Yet the actions of Labour's spin doctors caused serious concern among senior advisers. In a memo written by Gould and leaked to the press in 2000, he warned that the government had been 'undermined by a combination of spin, lack of conviction and apparently lack of integrity'. He concluded: 'The New Labour brand has been badly contaminated.'

Despite Gould's concerns, Labour had little to worry about at the polls. The 2001 election brought a second landslide majority. Key to Labour's campaign was its economic record. Its major success had been to assume the Tories' role as the party associated with sound economic management. Labour had been recreated as the party for the majority, leaving the Tories under Hague portrayed as a party for fringe groups.

There was also a growing sophistication in Labour's marketing techniques. In 1999 the party had launched a strategy to keep the gains it had made in 1997. It focused on these battleground constituencies, using a call centre to canvass constituents. This targeted approach was refined further in the 2005 election, when it used demographic and lifestyle databases to identify potential Labour voters in key constituencies and bombard them with information. And this year, the party hired Experian to build a new database for email and direct mail.

The 2005 election was different in another, significant way: Blair took less of the limelight, as arguably he required the support of his chancellor, Gordon Brown, to maintain Labour's popularity - the subtext was 'vote Blair, get Brown'. As a result, the two men, despite growing hostility between them, appeared in a high-profile election broadcast directed by Academy Award winner Anthony Minghella.

The major reason for Blair's dip in popularity was the invasion of Iraq in 2003. 'It was the moment when Labour lost a lot of its traditional support,' says Dirk Patterson, head of public affairs at Lansons and now on Labour's list of potential candidates. Blair had calculated that once troops were in the field, public opinion would swing behind the invasion. But the slow dismantling of the government's case for war, allied with the carnage that has befallen the country since, has made Iraq an issue that he cannot shake off.

This has seen the slow decoupling of Blair from the Labour brand. Many in the party who had acquiesced quietly to the New Labour project have become openly critical. Since Blair's announcement last September that he would step down within a year, speculation over the leadership has been rife. Backbench rebellions over issues such as the renewal of Trident have only heightened the perception of a leader divorced from his party.

So where does this leave the Labour brand? Brown, Blair's heir apparent, is in an awkward position. As a key member of the government since 1997, he can hardly declare himself as a fresh start. Yet being seen as the natural successor to Blair risks associations with ongoing sore points such as Iraq. Patterson believes his best option is to refresh the Cabinet. 'If he's careful, Brown will present himself as the architect of everything that has been achieved,' he says. 'He will have three or four big, impressive policy moves that he will have carefully costed. He will clean out anything that may have tarnished the brand.'

He could also renew Labour's appeal to its traditional support. Dr Dominic Wring, senior lecturer in communications and media studies at Loughborough University, who has written on the party's marketing tactics, argues that New Labour probably took a narrow approach, focusing on middle-class voters who could win it key constituencies, and assuming it could ignore its core working-class vote as it had nowhere else to go. The result is a party whose grass roots have withered (in 2005 membership dropped below 200,000, less than half that of 1997) and which has debts of about £23m. 'New Labour has sown the seeds of its destruction,' Wring argues. 'You can only test the patience of your core supporters so much.'

Butterfield disagrees, arguing that, by focusing on aspiration, New Labour has always been a mass political movement. 'It is very patronising to talk of the working class as though they know their place. They too want to see their lives get better. The fundamentals of New Labour are still good principles.'

But finances will be a major problem for Brown. Focus groups and targeted marketing strategies cost money. His challenge will be to resuscitate a largely disillusioned party while maintaining the 'broad church' positioning that served New Labour so well. 'Brown will talk a lot about unity in the run-up to the next election,' predicts Wring.

When Blair steps down, it will bring to a close one of the most remarkable rebranding exercises in British politics. It is for history to judge his government's record, but there is no doubt that the process by which Labour repositioned itself and communicated that shift to the electorate was ruthlessly effective. Over the past decade it has reshaped the centre ground. Gordon Brown's job will be to deal with the consequences.

1997: On 1 May Tony Blair wins a 179-seat majority, ending 18 years of Tory rule. The Labour campaign, co-ordinated by figures including former Daily Mirror political editor Alastair Campbell and Peter Mandelson, previously a producer on LWT's Weekend World, focuses on the Tories' tax record. A series of more positive posters created by BMP uses the line 'Britain deserves better', but the campaign's most memorable image is the Tories' 'Demon eyes' poster.

1998: Downing Street sets up a Strategic Communications Unit under director of communications Alastair Campbell to co-ordinate publicity and news management. The culture of secretive briefings and 'spin' culminates in an anonymous aide accusing Gordon Brown of having 'psychological flaws'.

1999: In December the Labour Party decides to focus resources on battleground constituencies won in 1997. The project involves direct mail and a newly opened call centre on Tyneside. The intention is to contact potential allegiance-switchers in these constituencies.

2000: The Labour Party appoints TBWA, led by long-time Labour supporter, Trevor Beattie, to handle its advertising account. Early work uses the lines 'The work goes on' and 'Thank you'.

2001: The election campaign gets under way in May with horror film-style posters and an image of Tory leader William Hague topped with Margaret Thatcher's hair. Labour wins the June poll with a majority of 167 seats. A row erupts after spin doctor Jo Moore tells a colleague on 11 September that it would be 'a good day to bury bad news'.

2002: Labour tries to focus on law and order to woo back the working classes ahead of local elections in May. In Burnley, the British National Party won three council seats - its first in nine years - highlighting dissatis-faction with Labour's middle-class focus.

2003: In May reporter Andrew Gilligan claims the dossier used to justify the Iraq invasion was 'sexed up'. In July his source, Dr David Kelly, is found dead, prompting the Hutton inquiry. Alastair Campbell resigns on 29 August.

2004: The Hutton Report is published in January, largely absolving the government of blame but damning the BBC. In the same month, the Phillis Report recommends less use of the media to convey government messages to reverse distrust of 'spin'.

2005: In May Labour wins a third election following a campaign with the theme 'Forward, not back' featuring a strong direct-mail element. Data sources such as Mosaic are used to target likely floating voters. Blair, weakened by Iraq, requires support from Gordon Brown, and the two appear together in an election broadcast directed by Anthony Minghella.

2006: Labour launches a short film mocking Tory leader David Cameron as 'Dave the Chameleon' for his flip-flopping ahead of local elections in May. The Labour Party comes third behind the Conservatives and Lib Dems with a 26% share of the vote, its worst performance in two decades.

2007: Labour hires Experian to build a database to improve its targeting. The party prepares for a battering in the local elections, as Blair prevaricates over setting a date for his departure.

1997: ELECTION

10.3% - The biggest ever swing from Conservative to Labour. Among skilled working-class voters, the swing was 29%

2001 ELECTION

59.4% - The lowest voter turnout at a general election since 1918. Labour's share of the vote fell just 2.5% on 1997

2005 ELECTION

£17.9m - Labour expenditure on the campaign, up from £10.9m in 2001. Its spend on direct mail rose from £1.5m to £2.7m

ESSENTIALS

WHAT HAS LABOUR DONE FOR YOU?

The marketing industry has not gone untouched by 10 years of Labour government. A series of policies and initiatives have helped to change the communications landscape.

The government has been largely supportive of self-regulation in the marketing industry. It oversaw the transfer of the regulation of broadcast advertising to the Advertising Standards Authority, and perhaps its biggest piece of legislation has been the 2003 Communications Act, which replaced a disparate range of regulators with Ofcom. 'It has been a great regulator in lots of ways,' says Nick Johnston, partner at law firm Osborne Clarke. 'It is more in touch with the industry and its issues than its predecessors.'

The support for self-regulation reflects Labour's generally pro-business stance. Self-regulation is usually a cheaper option than government regulation, and can protect ministers from controversial areas, though the government can always lean on the regulator to make the decisions it wants.

The major exception has been the issue of marketing food to children. Following the publication of the 'Choosing Health' White Paper in 2004, the government's attitude toward food and drink marketing has hardened as lobby groups have become noisier and more influential. The unexpectedly harsh Ofcom rules on broadcast advertising, unveiled late last year, have been viewed as the consequence of government pressure for a stricter code.

Some regulations that the government has introduced have originated from Europe, such as the ban on tobacco marketing - although Britain adopted it far quicker than many other European nations - and regulations on email marketing. The Audiovisual Media Services Directive currently being hammered out in Brussels will also affect marketing in the UK.

Perhaps the Blair government's greatest success in relation to the marketing industry has been winning the Olympics. How much it will cost remains to be seen, but the biggest marketing bonanza on earth is heading this way in five years' time.

BRITAIN TURNS DIGITAL

Labour has presided over the launch of digital TV services that have revolutionised the UK TV market. Much growth has been driven by the private sector and Freeview, but the government has co-ordinated the drive toward analogue switch-off.

TRANSFORMING REGULATION

One of Labour's most important legacies to the communications industry, Ofcom was formed in 2002 and given full authority by the 2003 Communications Act. A single body replacing a patch-work of regulators, it has been viewed as a success.

A SINGLE ITV

The 2003 merger of Carlton and Granada to create ITV plc was another product of the 2003 Communications Act, which liberalised media ownership. The Contract Rights Renewal system was subsequently created to protect advertisers.

FOOD ADS TRIMMED

The 'Choosing Health' White Paper, published in 2004, laid the foundations for the govern-ment's response to the obesity crisis. The result has been new codes for advertising through both broadcast and non-broadcast media.

GAMES' BIG WINNER

When London pipped Paris to win the right to stage the 2012 Games, much of the credit went to Blair himself, whose lobbying of key IOC members ahead of the vote in July 2005 outwitted the French delegation. Just don't ask how much it will cost.

CANNY GAMBLE

Due to come into force in September, the Gambling Act is one of the biggest pieces of marketing deregulation. The Act lifts the ban on broadcast ads for casinos, betting shops and gambling websites, and makes it easier to run prize draws.

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