Public sector adspend to plummet in UK

05 August 2010

LONDON: The UK government, one of biggest advertisers in the country, has unveiled plans to slash its expenditure in this area by almost half.

During the year to March 2010, the Central Office of Information, or COI, which handles the majority of public sector marketing, spent £531m, some £211m of which was directed to traditional media.

This constituted a decline of just £9m compared with the previous 12 months, despite the fact most companies were drastically reining in their outlay as a result of the economic downturn.

However, the government's efforts to tackle the UK's deficit will result in figures being cut substantially, with a contraction of nearly 52% generating savings of £6.5m in June alone.

A number of "essential" campaigns are set to remain in place, such as recruiting for the armed forces, promoting galleries and museums, and ads seeking to ensure timely tax payments.

Road safety and the National Savings scheme will similarly stay on the agenda, alongside platforms providing "measurable benefits relating directly to immediate public health and safety".

Despite this, all media initiatives with a budget of at least £25,000 now require approval from the Efficiency and Reform Group.

"The days of spending millions of pounds on expensive projects are over," Francis Maude, minister for the Cabinet Office, said.

"As we go forward, we will continue to look for more cost effective ways of delivering key government communications."

Elsewhere, the COI will also reduce its headcount by some 40%, with a total of 287 members of staff facing redundancy.

"A leaner COI is in line with new government priorities," said Mark Lund, the organisation's chief executive.

In a bid to maximise the resources at its disposal, social media platforms like Facebook and Twitter will become more important.

"We anticipate more focus on partnerships with brand owners, media owners and civic groups, as well as increasingly innovative approaches to joining up paid-for and other media channels," said Lund.

Patrick Kirby, an analyst at Deutsche Bank, suggested the government's announcement would exert a "big impact" on the media industry when sentiment was showing signs of improvement.

"Even at the start of the year there were expectations of a slowdown, post-election," he said.

"Two or three months ago people were a bit worried about a more cautious view for the second half, but the outlooks have been quite positive [in the more recent past."

Data sourced from Financial Times/Guardian; additional content by Warc staff