COI loses 236 staff upfront – 51 more to go involuntarily

November 5, 2010

More news of the bloodbath at the Central Office of Information. In reply to a parliamentary question, cabinet office minister Francis Maude – who has openly questioned whether the COI has a viable future – acknowledged that 236 of the original 287 (or 40% of the work force) earmarked for dismissal have now applied for voluntary redundancy.

Unlike many quangos, the COI is taking all its punishment upfront – with potentially disastrous consequences for its efficiency.

The voluntary redundancy programme is limited to a maximum of 15 months’ pay, or £76,700, whichever is the lesser. It was carried out under the shadow of legislation capping the theoretical maximum available via normal employment law.

Fifty-one more will presumably head to the exit under less benign circumstances in the coming weeks.

UPDATE 2/12/10: Peter Buchanan, the COI’s deputy chief executive, who has been with the organisation for 16 years, has added his name to the long list of those departing. He go at the end of this year.

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Francis Maude’s Sword of Damocles leaves the COI’s future hanging by a thread

October 15, 2010

Clearly the future of the Central Office of Information, which has been around since 1946, is even more precarious than I – or I suspect its chief executive Mark Lund (left) – had imagined.

Not content with imposing an emasculating 40% cut on the COI’s 737-strong workforce, the Government is now openly toying with the idea of casting its eviscerated carcass onto the bonfire of the quangos.

The decision, which will not be finalised until the end of November, is in the hands of cabinet office minister Francis Maude. Maude’s views on the subject may readily be gauged by his recent actions. He has floated the idea of the BBC airing COI campaigns free of charge – presumably in place of the many self-indulgent programme trailers and cross-channel promotions which now clog our viewing. Indeed, he has gone further. Since media buying would, to the extent that campaigns are aired by the BBC and not commercial channels, become redundant, he has taken the logical step of opening negotiations with WPP over M4C’s £200m centralised media buying contract.

Strip out centralised media buying, and it is very difficult to see what else is propping up the rationale of the COI. Specialised consultancy advice? Increasingly unlikely. Such industry knowledge will be a rare commodity once the organisation has been cut to the bone. And if that is so, the road to dissolution begins to look like a four-lane motorway. As with other quangos facing the axe, any essential functions will be transferred to alternative organisations – here, the bigger-spending departments of state such as the DoH.

All this would be a terrible blow for commercial television (especially ITV, which carries the bulk of COI campaigns). But it is doubtful whether agencies (beyond M4C and the media buying community) would shed anything other than a few crocodile tears. Someone still has to make the ads; and Richard Pinder, chief operating officer of Publicis Worldwide, has made it abundantly clear that his agency for one would be right behind the Maude proposal. Others may be more muted, but it’s unlikely they will disagree with him.

If Maude gets his way, it will be the realisation of a terrible irony. Previous COI ceos – namely Carol Fisher and Alan Bishop – have fought tooth and nail over the past decade, ultimately successfully – to suppress a secession by departments of state.

But will Maude actually go through with it? Don’t underestimate the BBC’s ability to kick up a stink over this: it doesn’t like the Maude Plan any more than ITV, although for a quite different reason. The whole issue threatens to become mired in a heated “public interest” debate, pivoting on the BBC’s impaired political impartiality. What with the brouhaha over BSkyB (to refer, or not refer, Rupert Murdoch’s bid), I doubt that the coalition government will have the stomach to take on an alienated ITV and truculent BBC as well. No doubt about it, though, it’s a thin thread the COI’s future hangs by.


Murdoch-bashing is the BBC’s best defence

October 8, 2010

Say what you like about BBC director-general Mark Thompson (and some do find him a bit antenna-challenged), he’s doughty in defence.

BBC's best defence?

Having got his hands on a big stick to club his bete noire and tormentor James Murdoch at this year’s MacTaggart Lecture, he’s now taken the media war to Murdoch Snr’s “home” terrain by  very publicly wading into the “Stop Murdoch getting Sky at any price” debate on America’s normally unremarkable public service television network (PBS). Thompson told the Charlie Rose programme that giving Murdoch what he wanted – the other 61% of BSkyB – would result in “a significant loss of plurality in our media market” and the “potential of an abuse of power.” In effect, it’s the old “Silvio Berlusconi” caricature – lovingly etched by Claire Enders – being given a new lease of life.

Whether a wholly-owned Murdoch Sky would really lead to an abuse of power I have no idea; beyond mentioning what people seem to conveniently forget in this debate – Murdoch’s imploding newspaper revenues. But the truth of the matter is less important than its plausible representation. And here – hats off – I must admire Thompson the tactician. Intelligently using the fewer resources at his disposal he has turned attack into the best form of defence. Like some latter-day Stonewall Jackson.

What Thompson has scented is a definitive change in the balance of UK media power which he is exploiting to the BBC’s advantage. It cannot have escaped notice that the regulatory authorities – prodded by the politicians – are spending an increasing amount of their time pursuing alleged abuses of BSkyB’s power – as instanced by investigations into its significant stake in ITV, and its control of premium sport and film content. What juicier opportunity to get politicians frothing at the mouth than pointing up the imminent prospect of Murdoch getting his hands on all of Sky’s £6bn revenues and £950m cashflow? Thompson nicely emphasised what’s at stake in his MacTaggart Lecture when he suggested Sky’s marketing budget alone dwarfs what ITV spends on its programmes. It now appears he has made common cause on the matter of Murdoch’s overweening power with some very odd bedfellows indeed: just about every other newspaper proprietor in the country.

And while the media and the politicians are diverted by the prospect of one long, uninterrupted, Murdoch-bashing fest, who’s going to be bothering with such pettifogging issues as bloated budgets, out-of-touch management, abuse of the internet media market and pension funds running amok at the BBC? Which should make for a fairly uninterrupted run-up to the next licence-fee negotiations.


Arts Council prepares to give Tweedy’s business sponsorship body the heave-ho

September 28, 2010

Doyen of business sponsorship of the arts Colin Tweedy is in rueful mood these days, and for good reason. He’s waiting on tenterhooks to find out whether Arts & Business – the organisation he has built up over 27 years to champion commercial participation in the arts – has become the victim of a stitch-up hatched by his host body, the Arts Council.

The Arts Council, like every other quango, is under intense pressure to make deep cuts in its budget. And the suspicion is growing that, in order to save its own hide, it’s quite prepared to sacrifice A&B – which depends on the Arts Council for over half of its funding.

Naturally enough, that’s not going to be the way the proposal is presented to culture secretary Jeremy Hunt. The pitch is more like this: [Much wringing of hands] “…so, Secretary of State, unfortunate sacrifices have had to be made for the greater good of the arts community and we feel Colin’s organisation… well, it does receive quite a lot of private funding, and it’s about time it stood on its own two feet…” Or words to that effect.

Actually, it does receive quite a lot of public money – about £4m a year – which for obscure reasons is within the remit of the wholly subsidised Arts Council rather than being funded directly by the DCMS (the case before 1999 with the then Department of Heritage). Pulling the plug of public finance, however, would not be the best calculated method of ensuring it stood on its own two feet. In fact, quite the contrary. Much of the 45% private funding might disappear if it is not matched by a pledge of public money. And even if it did not, A&B would be crippled by the drastic restructuring that would have to take place to ensure some pale ghost of an afterlife.

It says a lot about the arts world that some would greet this outcome with ill-disguised glee. To them, commerce is a grubby word contaminating the purity of the artistic dialogue. And, let’s face it, Tweedy – tireless champion of commercial support of the arts over nearly three decades – has made a few enemies on this account along the way.

But he’s not without friends, either. And one of them is George Osborne, Chancellor of the Exchequer. It is a peculiar irony that Osborne, in whose name these swingeing cuts are being made, was – until his present elevation – a passionate advocate of the engagement of art with commerce. As you would expect, given he sat on the board of A&B.

Maybe the Arts Council should have a rethink. Not just because of Osborne either. The whole idea of doing away with our best-known and most successful arts sponsorship body seems daft, given that public subsidy of the arts is about to crater.

More about this in my magazine column this week.


What are the chances of the BBC negotiating a decent licence fee for 2016…

August 30, 2010

… and Mark Thompson, the present director general, leading those negotiations? Much better than they were a few weeks ago.

In his much-awaited MacTaggart lecture at the Edinburgh Festival, Thompson skilfully deflected the incessant barrage of brickbats hurled at the BBC’s corporate flatulence by painting BSkyB as the real enemy of UK media plurality.

Get-back time at James Murdoch, head of News International, after his cruel gibes in last year’s lecture at the expense of the corporate bloater, of course. But more than that, Thompson has read his runes well. The times, they really are achanging.

The argument, beloved of BBC critics, that the corporation is stifling commercial competition falls to pieces once we begin to examine the success story that is BSkyB. A few deft brush marks from Thompson’s speech tell the tale well enough. Sky’s dominance is underlined by a marketing budget that is bigger than ITV’s programme budget; and subscription revenues of £4.8bn that “dwarf…all other commercial broadcasters put together.” Lurking not very far below the surface is the suggestion that in Rupert Murdoch we have a UK version of Silvio Berlusconi – owning well over 40% of our newspapers, and poised to buy out the 61% of BSkyB his organisation does not already own.

That last bit may be a bit fanciful, but there are certainly compelling elements to the Thompson narrative that argue for a strengthened rather than reduced role for the BBC. If there’s been a failure in public service plurality over the past 20 years, it’s not so much the overweening power of the BBC that has been responsible for it as the inability of the ad-funded sector – represented primarily by ITV, C4 and C5 – to build a countervailing digital subscription-driven complement to their free-to-air analogue offering. If BSkyB could do it, runs the argument, why couldn’t they? To which, once we dust down the sorry case study of ITV Digital, there is no very good riposte.

Moving on, and acknowledging the chronically weakened position of the free-to-air, ad-funded sector, there seems little sensible alternative to recognising a new balance of power if broadcast plurality is to be maintained. Unpalatable as it may seem to people at ITV, the BBC is now the best bastion it’s got against further encroachment from Sky – along the lines of the enemy of my enemy is my friend.

Thompson’s specific proposal – that Sky should pay the ad-funded channels for carriage of their content, rather than the other way round, which is what now prevails  – is unlikely to gain traction. But it was shrewd propaganda, underlining the point – as it does – that Sky would not be where it is today without a big subsidy from free-to-air sector content.

What’s more, Thompson’s thinking chimes nicely with a change of heart by the regulatory authorities. Ofcom’s recent decision to open Sky’s lucrative but restrictive Hollywood first-run film offer to the Competition Commission is an indication of increasing concern that Sky is getting too big for its boots. It comes hot on the heels of an earlier probe into Sky’s sport offer.

A back-handed compliment, in a way. Sky has become the one to beat. A situation which, if nothing else, will give the BBC a breather for a while.


Finding marketing meaning in Big Society rhetoric

August 5, 2010

What exactly does David Cameron’s vision of the Big Society amount to? The cynical, but evidence-based, conclusion is: spontaneous acts of unrewarded generosity by almost every segment of society except the state itself.

While ‘mad axeman’ George Osborne frenziedly appeases the rapacious dictates of international capital markets, the rest of us  – it appears – must supply the deficit with sundry forms of “volunteer” work. At the local community level, Cameron seems to be proposing a boy-scout initiative with a bit of unpaid crowdsourcing thrown in. Similarly, business is expected to dig deep into its pockets to subsidise national policy initiatives – such as Change4Life – left destitute by the annihilation of the public funding formerly underpinning them.

Nowhere, right now, is the fallout more visible than in the marketing communications community, which is tasting the bleak disparity between political rhetoric and reality encapsulated in permanently truncated public sector budgets and a crippled COI.

What can be done to reverse this dreary cycle of perpetual cuts and reignite some top line growth? The glimmerings of an answer has been provided by Cameron’s friend Sir John Rose, who happens to be the chief executive of aerospace engineering company Rolls-Royce. Rose is trying to persuade Cameron to engage in a long-term industrial innovation strategy. That may seem a far cry from the immediate needs of the cash-starved marcoms community but, believe me, there is a marketing angle in all of this for those with the skill to exploit it.

Rolls-Royce has recently produced an audit, based around an analysis by the Oxford Economics consultancy, which seems to demonstrate that its activities contribute a quite extraordinary amount of added value to the UK economy. The figure quoted is 0.56% of UK GDP: £7.8bn of £1,400bn. All the more extraordinary, as the FT points out, when we remember that Rolls-Royce employees account for only 1 in 3,000 of the UK population.

Even allowing for exaggeration, there is clearly an important multiplier effect here. The calculus is apparently based on such things as former workers leaving to start their own ventures (one cited example used the skills he had acquired to set up a coffee-machine factory); through to suppliers who assimilate new engineering techniques by working with the company.

The detail is less significant than the power of the idea behind it. Rolls-Royce is embarking on a new form of corporate social responsibility – dubbed in some quarters corporate social activism. Part educational and part public policy oriented, it is designed to help transition Britain from being a vulnerable service economy to a high-value engineering one.

Rolls-Royce is not unique in this endeavour. Only last month BAE Systems, our biggest aerospace and defence contractor, announced a £50m investment in its Skills 2020 programme, which aims to supply the UK with a continuous stream of high-level engineering talent. Crucially, BAE has managed to persuade the government to actively support its initiative.

Corporate social activism need not be restricted to prominent aerospace corporations. Look to the United States and you will see that Geoff Imelt, chief executive of GE, recently launched the Ecomagination Challenge. It offers $200m of venture capital money to anyone enterprising enough to find a winning solution to revolutionising the US power grid.

Nor is the consumer goods sector excluded from such activism. Pepsi has recently announced a ‘Refresh Everything’ project, which is funding social enterprise at the local level with hundreds of millions of advertising dollars diverted from supporting the Super Bowl earlier this year.

Here, then, are a few ideas that appear to chime readily with Cameron’s Big Society rhetoric. It’s up to marketers to provide the small print, according to Alan Bell, chairman of Bell Design & Communications – whose company recently pitched for the Rolls-Royce account:

“There needs to be a debate about what the Big Society actually means in terms of industry participation. One of the problems with this country is its ‘quick, quick, quick’ City mentality. We don’t look enough to the long term. And now, as this recession is demonstrating, we’ve  been caught out – with devastating consequences for our service-driven economy. In a funny sort of way, the age of austerity may prove a catalyst for new thinking. If we don’t – for example – train our engineers of the future they, too, will be lost to China and India. That new thinking also applies to marketing. It takes time to understand the longer view; branding is not all about identity makeovers.”

Bell speaks from an unusual standpoint. His was the only agency to be selected by UKTI – the government-sponsored body that promotes British businesses internationally – to represent Britain at the Shanghai Expo this year. Bell Design, which now has an office in China, has been conducting a series of branding workshops that brought its team into contact with some of the country’s most powerful regional bosses.

One thing the Chinese certainly understand, Bell says, is the longer view. He is fond of quoting the late Chinese leader Zhou Enlai. When asked what he thought about the impact of the 1789 French Revolution, Zhou – the architect of China’s industrial take-off – replied: “It’s too early to tell.”

The message is: take a leaf out of China’s book, or get left behind.


Changed4Life – policy U-turn puts advertisers in the driving seat

July 8, 2010

For the health lobbyists, it was a rout; for advertisers – and especially those in the food, soft drinks and alcohol sectors – a triumph and an indisputable turning point.

Lansley: A Mars a day may help you work, rest and play

Yesterday’s landmark speech by health secretary Andrew Lansley left not a shadow of a doubt about the government’s future stance on the obesity debate. Nannying – in the sense of strict legislative curbs – is out and “nudge” – the employment of persuasion techniques to mould consumer behaviour – is definitively in.

In practice it means that a fiscally-challenged Government intends to withdraw some public funding from the 3-year Change4Life programme, leaving business to take up the financial slack. Almost without saying, this puts the members of the Business4Life initiative in an unprecedentedly powerful position.

As if to underline the point more graphically, Lansley made specific reference to some of the main consortium members in his redefinition of government policy:

“It is perfectly possible to eat a Mars bar, or a bag of crisps or have a carbonated drink if you do it in moderation, understanding your overall diet and lifestyle. Then you can begin to take responsibility for it and the companies who are selling you those things can be part of that responsibility too.” Companies which include Mars, Coca-Cola and Pepsi Cola (owner of Walkers Crisps).

What this means for the health lobby was bleakly summed up by Tam Fry, the feisty leading-edge of the National Obesity Forum. “NOF is horror-struck at Mr Lansley’s remarks. It sees them as nothing other than a bare-faced request for cash from a rich food and drink industry to bail out a cash-starved Department of Health campaign, ” he says. I might scruple at the “nothing other” bit, but find it hard to disagree with his argument, as far as it goes.

Lansley’s new concordat is at once an opportunity and a trap for the food and drink industry. It’s an opportunity to exercise more responsibility in what it sells, and how it sells it, to an increasingly wary consumer. As Fry points out, many food manufacturers continue to sell products whose salt, sugar, and fat content is well in excess of Food Standards Agency guidelines. There are signs of greater self-restaint, particularly in the area of trans fats, but it is slow and grudging. The science surrounding obesity meanwhile moves on, and with it – if diffusely and haphazardly – the consumer perception of what is acceptably healthy and what is not. Only this week, for example, a study found that children who are obese tend to exercise less, because they are already overweight; rather than because their lack of exercise causes them to put on weight. In other words, from the complex miasma of obesity’s causes – among them poor education, lack of exercise and poverty  – junk food has once more emerged as an all-too-visible spectre.

So, when Lansley advises Business4Life to reach for the till, it should reach for the till. But its members must also remember that what they are doing will lack all public credibility if it is unaccompanied by measurable changes in the behaviour of the food and drink companies themselves. This is not an opportunity for coasting.


Unison lets off steam over sexy nurses, but what about flighty attendants?

July 6, 2010

Our favourite union Unison has been getting into a terrible lather about a Head & Shoulders commercial that supposedly demeans nurses.

The offensive ad features numerous nymphettes, clad in clinging white uniforms and red high-heeled shoes, serenading the bemused male occupant of a steamy shower.

Actually, says Saatchi & Saatchi – the agency responsible for the ad – they’re not nurses at all; they’re “a cross between beauticians and dermatologists”. Mmm, since when have beauticians worn those medal watches? But I’ll let you be best judge of that.

Moving on, I’m not surprised the Advertising Standards Authority has found no grounds for a formal investigation into Unison’s complaints. As far as I know silliness is not a CAP offence.

Besides, where would it all end? Nymphettes, red high-heeled shoes and sexually suggestive behaviour readily recall another, more famous, campaign: last year’s Virgin Atlantic retro ad. Given that flight attendants are a core trade union constituency, should that be blacklisted too?

Mind you flight attendants (or “air hostesses” as we used to insensitively call them) have every right to apoplexy over this raunchy little number from Russian budget airline Avianova:


NICE oversteps the mark in ‘last hurrah’ against Big Food

June 22, 2010

If I were the chief executive of the National Institute for Health and Clinical Excellence, I would be very careful where I trod right now. Quangos are looking highly dispensable in the forthcoming Exchequer purge of the public sector.

So what does NICE do? It plays the turkey voting for Christmas. Twice in the past month it has come out with a series of recommendations that are not only – arguably – beyond its remit but are also like a red rag to the new blue-and-yellow striped government.

First, it called for a watershed ban on advertising alcohol, when the government has already ruled that out. Now, in the process of advocating a total ban on so-called trans fats and a general assault on salty foods, it has not only recommended another watershed ad ban (see above) but proposed the introduction of the “traffic light” colour coded food warning system only days after it was rejected by the European Union.

NICE’s raison d’être is to save lives by improving the quality of healthcare (and by implication reduce the heavy financial burden associated with it). There’s no doubting that trans fatty acid is a nasty substance that can cause heart disease by promoting “bad” cholesterol at the expense of “good”; and that it’s also a suspect in other disorders, such as Alzheimer’s, cancer, diabetes and infertility. Nor that it has, in the past, been widely used by the processed food industry as a shortening agent (eg in biscuits) and as a substitute for butter (for instance, in margarine). But it’s definitely on the way out. Some countries – among them Denmark, Switzerland, Australia and parts of the United States – have already prohibited it. Britain has not got that far yet, but since 2006 our supermarkets have employed a self-denying ordinance, and the food manufacturers have been quietly phasing it out.

NICE’s determination to rid us of this noxious substance is not as disinterested as the organisation would have us believe. Behind it seems to lie an agenda: a crusade aimed at the food industry in general, and its freedom of commercial expression in particular.

Of course, in the longer run NICE is right to flag up the trans fat issue. Sooner or later its harmful effects – like those of tobacco – are going to become big business for lawyers in the States. For NICE, though, there may not be a longer run, if it goes on behaving the way it is. Government ministers are likely to conclude it is an organisation out of control. And we know what that could mean in these austere times.


COI letter makes grim reading for ad agencies

June 3, 2010

In true Sir Humphrey style, a letter from the Central Office of Information purporting to offer helpful guidance on departmental ad budget cuts has spread alarm and confusion among the roster agencies to whom it is addressed.

The letter, from COI deputy chief executive Peter Buchanan, attempts to rationalise the £160m of savings in advertising and marketing imposed by the new coalition government on May 24. But in doing so, it raises more questions than it answers.

First, it is not entirely clear how heavily the axe will fall on advertising – as opposed to other marcoms. Last year, the COI spent £540m globally on the taxpayers’ behalf, of which about £211m was advertising. The letter states that the expected savings “could represent a reduction for this financial year of at least 50 per cent in government advertising expenditure compared to 2009/10.” It stipulates that the “freeze will take effect immediately” and apply to the end of 2010/11.

So, about £105m of the £160m earmarked savings are to come from advertising. Which means, presumably, that the other £330m lower-profile marcoms get off comparatively lightly. Inequity aside, the picture for advertising looks bleaker still given we are already well into the financial year: the £105m of cuts will have to be made over 10 months, not 12.

By now you’ve probably got the impression there’s little scope for any ad expenditure at all. You’re not far wrong. For the avoidance of doubt, Buchanan’s letter goes on to explain that three stringent criteria will further throttle activity. “…Only essential campaigns will be allowed to continue. This will be defined so far (my italics) as campaigns:

“Where the government has a duty to provide people with information, eg changes to legislation or public services;

“Where providing the public with information is critical to the effective running of the country, eg information about paying taxes, recruitment of the armed forces; or” – most mystifying –

“Where there is unequivocal evidence that campaigns deliver measurable benefits relating directly to immediate public health and safety.”

Taken in the round, I suggest these restrictions will add up to a great deal more than 50% of the ad budget. For the rest of the year, roster agencies should start counting upwards from zero, not downwards from 50.


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