Agencies Hit as UK Postal Giant Axes Adspend

07 May 2004

Agencies have been left reeling after the Royal Mail slashed its advertising by more than 40% to £12m ($21.5m; €17.8m ).

The cutbacks, which include an abrupt halt to TV advertising, come as the beleaguered carrier tries to claw its way back into profit.

Abbott Mead Vickers BBDO is amongst the roster agencies likely to be affected. While AMV, the UK's biggest creative agency will probably weather the storm with relative ease, smaller shops such as Craik Jones Watson Mitchell may be harder hit.

To make matters worse, the financially embattled group, shamed by damaging revelations about the annual "loss" of 14 million postal items, also faces intense competition from rival operations.

According to Nielsen Media Research the company reduced adspend to just over £21.5 million last year, a 30% drop on 2002.

In a further bid to cut costs, its 360 strong marketing department was cut by half last year.

Data sourced from: BrandRepublic(UK); additional content by WARC staff