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MullenLowe Singapore Government Wavemaker

Public sector ad spend is set to fall. How will agencies be affected?


By Sam Bradley, Journalist

August 31, 2022 | 12 min read

After years of funding some of the biggest public health campaigns ever staged, governments are among the biggest-spending advertisers on the planet. All eyes are now on their budgets.


The British government was the biggest advertiser in the country in 2020-21 / Unsplash

Figures released last week by the World Advertising Research Center (Warc) show that, globally, public sector spending on advertising rose 21.6% between 2020 and 2021.

Nielsen, meanwhile, reports that in Australia, the federal government and the state governments of Victoria and New South Wales ranked as the first, second and fourth-largest advertisers in the first half of 2022.

In the UK, Boris Johnson’s government spent over £1bn on advertising since the beginning of the pandemic; the Cabinet Office alone spent £376m in the 2020-21 financial year, £335m more than it did in 2019. In 2020, it was the biggest advertiser in the country, ahead of Unilever and Sky.

And in Singapore, the Ministry of Communication and Information was the second-largest advertiser for H1 2022, ahead of KFC and Shopify (three other ministries appear in Neilsen’s ranking of the top-spending organizations in the island country).

Plenty of that cash makes its way back to the agencies working with government departments. But is working for a government agency or department different from a typical relationship with a private sector brand? And how are agencies affected by the political decisions behind budget boosts or cuts?

Different aims

The objectives of government media and creative accounts are inevitably quite different from those of consumer brands. Engine’s campaigns for the Royal Navy sought to boost recruitment into the service, for example, while MullenLowe’s work for the Cabinet Office aimed to promote (or deter) public behavior and hygiene measures amid the Covid pandemic.

Oliver Halliwell, a managing partner at Wavemaker UK, says that government campaigns have one fundamental difference from commercial world, which entirely dictates how they are approached – they are ”focused on outcomes and not sales”.

He says: ”These outcomes can involve significant, even dramatic behavior changes that may need to be measured not in traditional financial quarters but in human lifetimes.”

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Wavemaker has worked with the UK government for the last 15 years and now handles media strategy and planning for nine UK government departments, including the Home Office, the Royal Navy, the NHS and the Department for Education.

Halliwell says that working on government accounts can be ”highly rewarding” for staff because the agency’s services become part of implementing government policy. ”Our planning makes a real and tangible difference to people across the UK. Our campaigns range from improving the quality of lives, making the country a safer and more prosperous place to live, supporting businesses to succeed and improving families’ health.”

Thompson, a branding agency specializing in the healthcare and wellbeing sector, has worked with the NHS for over a decade. Its work for the health service has included branding for NHS Direct, which was the precursor service to 111, and has helped the agency establish itself as a force within the wellbeing sector.

”It’s a big part of what we do,” says managing director Rachel Cook. ”The NHS accounts really pointed us into lots of other directions. Over 60% of our revenue last year was from purpose-led clients, a lot of which were in the health and mental health space.”

Emily Jeffrey-Barrett is the co-founder of the London agency Among Equals. Her business works with several local government organizations, including Waltham Forest and Lambeth councils; Re: London, which is a sustainability body established by the mayor; and the UK Atomic Energy Authority.

”We get to work on quite big topics,” she says. Previous campaigns have focused on tackling sexual harassment and promoting sustainable ways of living. ”You’re not just trying to sell more stuff, you’re working to make life better for people or for society as a whole.”

Getting the work

Bidding for the work itself is very different from pitching for a consumer brand’s business. In the UK, agencies wanting to take on government accounts need to be part of a procurement system called the Campaigns Solutions Framework and they must pitch to be added to, or remain on, the roster of available suppliers. The NHS, local and devolved governments each maintain their own agency rosters.

”There’s quite a lot of admin involved with onboarding and the procurement processes can be quite lengthy, but ultimately it’s a good thing because it means it’s fair,” says Jeffrey-Barrett. ”The only downside is that it can be a little slow-moving, but in some ways, that’s no different to working with a really big [private sector] client.”

US agency group Quad works with the US Postal Service. Extra scrutiny connected to such clients can mean further checks on agency staff and internal processes, and some programs require additional physical and IT security to protect data says Mark Raposo, its executive director of innovative business solutions. “They may also require additional checks and certification for any Quad employee that works on their specific program.“

Similar to agencies in the UK, procurement for the USPS is handled by the US Government Printing Office. “Quad maintains a specific vendor status that allows us to execute DM programs for the USPS and other agencies,“ says Raposo. In some cases, Quad is invited to participate in an online auction to bid on the upcoming program event. There is also a USGPO website that provides opportunities to bid on new print and direct mail programs when they are offered for vendor proposals.“

The sheer size of Britain’s health service means it deals with dozens of agency suppliers at any given time. Thompson, Cook tells us, has held multiple accounts with different NHS Trusts (the regional organizations which run the health service day-to-day) and is on several supplier rosters.

She says that the scrutiny involved in the procurement process can lead to healthier, long-term relationships with these clients. ”They like to minimize paperwork and they like to have a call-off agreement for three to five years if at all possible. They don’t want to have to go through the procurement process again.”

Agencies might find themselves working closely alongside other suppliers, notes John Tippins, a strategy partner at Wavemaker UK, which retained the media planning business for the Department for Work & Pensions in April. The British government employs one agency to handle all of its media buying (Omnicom Media Group’s OmniGov), but individual departments handle their strategic planning separately.

”In this way, we can be completely media neutral, recommending channels solely based on campaign effectiveness without any preconceived bias,” explains Tippins.

One upshot of working through such a rigid framework is reliability. Tippins says: ”We’ve always found that departments are aware of the importance of paying fairly and that their campaigns are sustainable. As far as we were concerned, even before government departments reported increased spending, the work was more than worthwhile.”

Government clients might not be the biggest contracts, but they can provide agencies with a reliable client partner. Cook says: ”Our business model isn’t centered around the NHS... but we have a good reliable income stream from that.”

Jeffrey-Barrett agrees: ”The budgets aren’t astronomic. But commercially, they are very dependable, trustworthy clients.”

Political choices

Though Warc predicts that global advertising spend will increase 8.3% this year, it forecasted a 19.3% drop in public sector and non-profit spending in 2022, as well as a further 3.9% fall the year after – a consequence of the lessened need for public health comms.

In the UK, both candidates competing for the leadership of the Conservative Party and for the office of the prime minister have promised to slash government spending. While it is unclear which, if any, of those plans will actually become policy, it’s not hard to imagine government comms budgets being lined up for the chop – especially as the immediate public health comms priorities of the last two years recede.

Current affairs aside, government budgets are ultimately always subject to political choices – and heavy scrutiny.

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Cook says that while government clients aren’t ”harsher critics” than the private sector, ”they try to be more democratic” in judging the value of an agency’s output. ”Wherever possible they try and include user consultation and trust their gut less, because they have to be responsible with public funds – and probably also because they’re conscious of repercussions. The Daily Mail or the Express might criticize them or something, so they are risk averse. They like it if we can give them some reassurances such as testing, or if we can give them assurances about the processes we follow.”

Rather than persuading departments to spend more outright, agencies are often called on to help make the case for advertising directly to budget-holders (in the UK, for example, the Cabinet Office controls departmental spending on behalf of the Treasury).

Louise Rowcliffe, client lead at Wavemaker UK, says: ”Once a department decides that a policy requires a communications campaign to help meet its objectives, Wavemaker will often help to build the case for budgets through data and insights analysis.

”In this respect, our role is making sure that we have built a robust case for an appropriately sized budget based on the objectives and the size of the audience. Getting this stage right ensures the most efficient deployment with minimum wastage. We have a responsibility to balance the needs of the campaign with the fact that this money comes from the public purse.”

MullenLowe Singapore Government Wavemaker

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