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PRCA submission to consultation on COI reform
Consultation Submission
The PRCA welcomed the opportunity to respond to the Cabinet Office consultation of Government communications, and possible reform of the COI.
The PRCA's response argued the following key points:
- a call for fundamental reform of the COI
- that millions of pounds have been wasted on ineffectual Government advertising
- a shift towards PR and away from advertising
- that the US Advertising Council model may be the wrong choice
Executive Summary:
We agree with the Government's general premise that the way it handles communications needs to change; and that the COI is ripe for fundamental reform. Our experience both of central Departments and of the COI convinces us that significant improvement is possible.
Indeed, we believe that this review should be root-and-branch, in order both to enhance the Government's legitimate communications needs, and to deliver improved taxpayer value for money and return on investment.
The COI needs to be made smaller, less bureaucratic, more business-friendly and more business-savvy. It also needs to be more authoritative within central Government Departments and other public sector communication operations, and to help raise the standards of the weaker-performing operations to those of the best.
We further agree with the Government's proposal that it should pursue a greater use of non-paid-for channels -again both by way of producing greater cost efficiencies, and in order to improve the efficacy of its communications activity. We believe that Governments have gradually become mesmerised by the attraction of advertising, lavishing increasingly large amounts of money upon it, while failing to evaluate its value. Quite simply, millions of Pounds are wasted on advertising ever year.
We support the creation of a cross-industry body, bringing together the professional representatives and largest commercial players in the marketing communications industry. There is a clear need for greater engagement between the public and private sectors, and such a body could be extremely useful in facilitating this.
We are convinced that such a body must be genuinely representative of the whole industry, and not be dominated by advertising interests. We are therefore concerned by the explicit reference to the US Ad Council which, as the name suggests, is not as broad-based as we would expect a UK cross-industry body to be.
We believe that the COI must be central to the Government's stated communications aims. It must also, however, receive strong and clear guidance from the Cabinet Office, and undergo radical reform if it is to achieve the Government's goals.
Detailed Responses:
1. What is your experience and opinion of Government direct communication and COI?
Our experiences are mixed.
Naturally, we believe in the power of cost-effective communications to effect powerful and necessary change. However, while recognising the case in favour of an organisation such as the COI, we believe it frequently has failed to deliver value for money to taxpayers or return on investment to Government. Equally, the direct work of central Government communications Departments has often been skewered towards the headline-grabbing, rather than the effective. There are massive differences in the quality of individual Departmental communications teams -some are excellent; others are not.
With regards specifically to the COI, an entirely appropriate imperative to ensure transparency and fairness in the awarding of Government contracts has led to an overly-bureaucratic process which deters many smaller organisations from biding for public sector work. In so doing, it restricts unduly the pool of talent available to taxpayers.
By way of example, we would cite the 2008 Roster review, which was, in our view, shambolic, and which, for many consultancies, continues to personify the COI's attitude towards the private sector.
In the 2008 Review, because of the COI's failure to keep to its own timetable, consultancies that had already failed to pass stage one of the process (but had not been made aware of that fact) were invited to complete the equally onerous second-stage application process. Completing each stage is estimated to cost a consultancy a week of billable time, and as such is a very significant investment -particularly if it is a wasted one. After lobbying from ourselves and others, the process was amended.
The handling of the Roster process is in our view a symptom of one of the COI's main problems -a failure to engage with, or understand, the private sector.
The COI needs fundamental reform to make it more friendly to business, and more efficient for taxpayers. A system whose administrative requirements deters many of the best marketing communications consultancies from engagement fulfils neither of those aims. The Roster process should be significantly streamlined and simplified in the interest both of reducing the burden on business, and of encouraging the best private sector providers to engage with the Government.
Mere tinkering with existing structures is clearly inadequate. It appears obvious to anyone who interacts with the COI that it employs an excessive number of people, consequently passing on to Government Departments an excessive amount of cost; that it is slow-moving; and that it employs few people with private sector knowledge and empathy.
The reluctance of Departments to work through the COI could be addressed in part at least by reducing its central costs (thereby reducing the internal charges it passes on), and streamlining the process for appointing relevant consultancy support.
The COI emphasis on advertising spend is clear and well-known. By way of example, we would cite the COI's 2009/10 spend of £213m on advertising, compared with £19m on PR and £44m on digital marketing.
This over-emphasis on advertising serves to deter bids from communications consultancies which do not have an advertising element to their offering. It necessarily discriminates against smaller -especially out-of-London- consultancies from biding for Government work. Not only is this unfair in itself, it also deprives the Government of access to the widest range of communications support.
We endorse the Government's embrace of targeted, evaluated communications. However, the Government's desire to change behaviour via nudge techniques will be unrewarded without an investment in direct communications. This investment needs to be evaluated, publicly justified, and present at every level of the public sector, from central Government Departments, through NDPBs, to local authorities. It need not add any net cost to Government communications expenditure, as it would allow the Government to identify and discontinue ineffective work.
Too often, the urge to be seen to be active has been treated as more important than the need to effect change and deliver return on investment. We believe that the Government has a unique chance at this moment in the political cycle to change direction here. Large-scale advertising campaigns may well create an impression of activity, but unlinked to change, they are simply vanity exercises.
The Government should be far more willing publicly to evaluate campaigns against pre-determined and publicised targets, and then to abandon those campaigns which have not delivered a proper return on investment.
2. The new Government has a clear intent to have fewer, more effective communications at lower overall cost, a greater devolution of responsibility to partners both commercial and civic and a greater use of non paid for channels. Within this context:
o When should Government use direct communications, and when should it not?
o What are the most important changes Government should make in its approach to direct communications?
o Are there any other principles you think should guide Government's use of direct communication?
The Government's desire to reduce the cost of its communications is understandable in the current circumstances. We endorse also its desire to change the balance of paid-for and non-paid-for channels.
We would, nonetheless, argue that it is wrong to see all communications as necessarily a drag on the public finances -behaviour-changing work (for example campaigns that encourage healthier lifestyles and alleviate cost pressures on the NHS) make a net positive contribution to the public finances, and deliver fantastic ROI.
In itself, abandoning many of the big-budget, arguably low-delivery advertising programmes would deliver both the better mix the Government aims for, and at a lower cost.
We would argue that the Government should use direct communications when such communications have clear targets, clear evaluation and a clear timescale to establish the value they have delivered. With more limited resources, the Government should target its activity on the work which delivers the best ROI.
The Government has, historically, failed to invest in the evaluation of campaigns and longer-term behaviour-changing activities. If it were to address this failing, then it would be able more effectively to monitor the impact of taxpayer spending, and to invest in success.
Justifying spend on communications is essential in the current climate. With that in mind, and given our belief that Government Departments should integrate robust evaluation into their work, we would argue that estimates (suitably composed with commercial confidentiality in mind) of the effect of individual campaigns, contracts and longer-term pieces of work, should be laid before Parliament and put in the public domain.
The Government might wish to consider how reasonable it is for it to be one of the largest advertising commissioners in the country, and might also consider whether other, already publicly-funded media might be more suitable vehicles for advertising than commercial channels. It might, for instance, consider moving its television advertising to the BBC.
3. In seeking to communicate directly with citizens, what type of relationship should Government have with the following groups?
o Advertising and marketing industry
o Media owners
o Brand owners
o Charities and civic society
It would be wrong for the Government to have anything other than a formal, open and professional business relationship with brand owners, media owners the marketing communications industry, and others.
Given the sometimes misunderstood nature of marketing communications, it is important that impartiality is maintained, whilst not cutting off Government from industry knowledge and views. In our opinion, there is insufficient private sector knowledge within Government communications, impeding knowledge transfer and understanding of the private sector ethos.
It is also important that taxpayers are able to see how much of their money is being spent, to what objective, and with what effect. That is why we applaud the COI's efforts to put objectivity at the heart of its work, even if we believe that such efforts have gone too far, and have served to create an unnecessarily bureaucratic system.
We believe however that work assigned can readily and effectively be linked to progress achieved, through the adoption of certain simple, key, unified, appropriately flexible evaluation techniques. We would be delighted to work with the Government to create such evaluation techniques, and would suggest that they also invite contributions from organisations such as AMEC -the International Association for the Evaluation and Measurement of Communication.
4. Could a ‘US Ad Council' style model work in the UK ?
o If so, how?
o If not, what are the reasons?
The idea of creating an overarching cross-industry body to advise the Government on making the best use of its communications resources is a sensible one, and one which we would support. Modelling such a body on the US Ad Council is, however, a very poor idea, which we would caution against.
There are two reasons such a body should not be based on the Ad Council.
First, the very name of the Ad Council contradicts entirely the review's avowed aim of making ‘a greater use of non-paid-for channels'. A UK Ad Council would, inevitably, be heavily if not entirely focussed on paid for sources -i.e. advertising. If it were not, it would be an obvious and discouraging misnomer.
If the Government wishes to change the balance of its marketing communications' spend, then creating an organisation with such a name would be inevitably and blatantly counter-productive, sending entirely the wrong message to the marketing communications industry.
Secondly, the US Ad Council is far from an ideal model for such a body. In our view, it is a cumbersome body, whose attempt to cover the whole industry results in an unwieldy large organisation. We would point, for example, to its 100+ Directors, each appointed for a term of three years. There are undoubtedly better models available if the Government wishes to find an off-the-peg solution.
Instead, we would suggest that a broad-based marketing communications advisory body, reflecting each of the disciplines within the industry, and composed of representative industry bodies and major commercial players alike, should be formed.
We would strongly urge that the numbers involved in such a body did not come close to approaching the numbers involved in the Ad Council; that its members should be unremunerated so as not to add to the burden on the public purse; that it should agree with the Government common methods and metrics of campaign evaluation; and that its members should provide their advice transparently and publicly, albeit with the usual exemptions relating to commercial sensitivity.
5. How could Government extend its use of payment by results i.e. consultancies and media owners being paid according to the outcomes achieved?
In principle, the public relations industry has no objection to payment by results (PBR). It is, indeed, a model of which we have first-hand knowledge, and which has become more normal during the recent downturn. We accept that any industry which believes in the professional value it delivers should not be afraid of linking its reward structures to its results.
However, before entering into such a system of professional reward, the Government needs to pay careful attention to the potential pitfalls it must seek to avoid; and to be aware of the unintended consequences it might provoke.
PBR will work only if the commissioning bodies are willing and able to provide rigorous and credible evaluation of campaign results. Such campaigns might be one-off efforts or longer-term programmes. In the absence of such evaluation, PBR becomes subjective and inconsistent.
The experience of the last Government in setting targets shows not only the inherent difficulty of evaluation, but also the danger of unintended consequences. We assume and hope that the current Administration will learn from those experiences.
Accordingly, the PBR mechanisms employed must be sufficiently more subtle. We are very happy to work with the Government to create universally-agreed techniques across the industry. It will find particular challenge in evaluating long-term behaviour change, compared with short-term, time-limited programmes.
If this is to work, then we would urge the Government to recognise four principles:
1. It must put uniform and credible evaluation techniques at the heart of the terms of reference of any marketing communications work. It will fail if it treats such evaluation as an add-on; or if it expects it to be delivered for free..
2. It must agree those evaluation techniques and targets before any work commences, rather than -as often happens at the moment- changing targets during the course of work; creating them mid-process; or creating them retrospectively.
3. It must be prepared not just to pay less, but also to pay more. If campaigns exceed previously-agreed expectations, then the Government must not be surprised to pay more than if such campaigns had failed, or had only just met their targets. PBR should be seen as a means of improving quality of work and return on investment, rather than as a crude means to reduce initial outlay. If that does not happen, it will simply make government communications less effective.
4. It must agree evaluation techniques and a form of PBR appropriate to all marketing communications disinclines, in order to allow inter-disciplinary comparisons to take place. In this way -and with the endorsement of the wider marketing communications industry (including, naturally, advertising) it will be able to make judgements about the relative value of the various elements of the marketing communications mix. We do not believe that any part of that mix should be afraid of objective and agreed comparisons if it has faith in its own value.
6. What role and services in direct communication should be provided centrally by Government, if any, for example:
o Strategy and policy
o Planning
o Co-ordination
o Procurement
o Design & delivery
o Regional
There are clear and compelling arguments for central Government to provide or procure directly media buying and design support, preferably at a national level. At a time of fiscal stress, this priority is more important than ever. The Government -or an appropriate Select Committee- might usefully analyse the COI's performance in this area over recent years.
The COI's efforts to deliver economies of scale in procurement, and better use of public sector resources in delivery, are undermined by two things:
First, the fact that central Government Departments essentially have a blanket opt-out from the COI process, encouraging them to act independently in defence of their own autonomy.
Secondly, that where Departments do make use of the COI, they are recharged very significant amounts. This in itself is enough to deter many Departments from making full use of the COI, and undermines their efforts.
The Government might usefully consider whether Departmental autonomy in these matters might not be reduced. In doing so, it might need to balance however some significant changes to the existing COI Roster so as not to penalise a large number of existing commercial providers, and further to limit the range of organisations able to provide services to the Government.
7. Currently, direct communication capabilities exist both centrally and within individual government departments. What, in your view and experience, is the most appropriate way to organise and structure Government's direct communication capability - for example
o Capability resides within each department
o Capability is based in departments but shared across government (hubs of excellence)
o Shared service capability is based in centre (centre of excellence serving departments)
o Centrally directed capability
In our view, it would be a step too far to move significantly to any hub or merged capacity model. It would encounter significant opposition, and might well take away from the specialist knowledge which existing Departmental operations have and need to have.
However, should Departments prove reluctant to accept the guidance (for example around evaluation) which we believe a reformed COI should provide, then the Government might wish to revisit this option.
We do believe that there are large variations in quality between individual Departments. A reformed COI might usefully take the lead in bringing weaker performers up to the level of their more impressive peers.
8. What role should COI play in the future?
The COI needs to be smaller, less bureaucratic, more business-savvy, and yet wield greater authority in its dealings with Departments, and other publicly-funded communications operations. It also needs firmer and clearer guidance from the Cabinet Office about the Government's aims and expectations.
Its remit should cover principally:
• Running central procurement where economies of scale or bulk buying are appropriate
• Providing guidance to Departments and others public sector bodies on best practice
• Holding and revising periodically a central, simplified Roster of marketing communications consultancies
• Producing and enforcing common frameworks, for example around evaluation
• Encouraging greater understanding between the public and private sectors, for example through secondments between COI and Government Departments and private sector communications professionals.
• Raising the standard of some weaker Departmental teams.
At its heart though, it will need fundamental reform, and a change ethos, in order to deliver on the potential which clearly exists for a central body such as the COI.
9. Are there any other comments you wish to make?
We have no further comments to make
Francis Ingham,
PRCA Chief Executive
January 27th 2011
About the PRCA:
Founded in 1969, the PRCA is the professional body for UK PR consultancies and in-house communications departments. We represent around 260 consultancies, between them employing in excess of 6,000 people, and around 60 in-house departments, including many FTSE 100 companies. The Association exists to raise standards in PR and communications, and all PRCA members are bound by a professional charter and codes of conduct. 39 of our members appear on the COI Roster, and a much wider range of our consultancy members work with Government at varying levels.
