Lund heralds a new era for the COI

Former ad man Mark Lund now presides over the UK's largest advertiser. He tells Media Week why the COI has decided to consolidate its media-buying contracts into one agency

Mark Lund, chief executive of the Central Office of Information
Mark Lund, chief executive of the Central Office of Information

He may have come to it late in life, but Mark Lund makes the perfect civil servant: charming, intelligent and, at times, skilfully evasive.

Just two months into his new job as chief executive of the Central Office of Information, Lund appears entirely at ease in his surroundings.

This assimilation is all the more remarkable when you consider the position the advertising veteran and co-founder of creative agency DLKW now finds himself in.

Lund, who turned 50 in April, has just put his signature to an annual report that confirmed the COI as the country's biggest advertiser, with media spend rocketing 35% in the last year to £211m.

That is £35m more than second-placed multi- national conglomerate Procter & Gamble, and the figure rises to £250m once the Government's burgeoning digital spend is included.

Furthermore, once all aspects of advertising and marketing have been accounted for, expenditure at the COI, which acts as the central purchasing body for all government departments, totalled £540m in the financial year 2008/09.

But this is no time to be leader of the pack. The Conservative Party continues to attack state spending on marketing and communications at a time of economic turmoil and David Cameron, the man most people expect to be Prime Minister this time next year, has pledged dramatic cuts if elected.

"If there is a change of government we'll deal with that and cope with it when it happens," says a politically sensitive Lund. "I'm fairly apolitical. I'm interested in the government process, but more from a good management point of view and in government being done well generally, as opposed to a political or tribal process."

Pushed on what his message would be for any party considering scaling back COI activity, Lund slips easily into the role of advocate.

Campaign record
"You have to look past the headline money figure and ask what it is we're trying to do," he says. "Look at the big campaigns, like trying to stop people smoking, where numbers are now at their lowest level on record; or trying to tackle obesity, which is already costing the health service in the region of £4bn a year; or trying to recruit teachers; or getting people to join apprenticeships. They are all important, both socially and economically."

This benevolent, agenda-driven remit of social programmes seems to genuinely excite the experienced ad man, who now appears less concerned with how to get ahead in advertising and more interested in how to make a difference.

In his salad days as account manager at legendary creative powerhouse CDP, Lund says he "learnt how the power of the idea can capture people's imagination and make things happen". He believes this premise is still a key element in changing behaviour.

"The need for government to communicate with the public is greater than ever, as society faces challenges such as obesity and climate change," he says.

Lund knows better than most that the one thing that has changed is the way government departments need to communicate with the public in a rapidly evolving media landscape.

"Did you know that, 20 years ago, it took 66 spots on TV to generate a standard TV campaign?" he asks. "Today, in a Sky home, it takes 7,644."

Such shifts in media consumption are behind the COI's decision to scrap its media-buying contracts by medium, in favour of a centralised framework, meaning that one agency or alliance will handle its entire media buying from spring 2010.

Full integration across media platforms and channels is expected to deliver a number of benefits for the COI and its government and public sector clients. A review of its creative roster is also underway, a process that will directly affect Lund's former agency, in which he still holds a financial stake. But any potential conflicts of interest are said to be negated by the company's operational set-up.

"Historically, the chief executive of the COI has not been involved with making any agency appointments," he says, "and I see no reason to change that."

Lund places digital media, already up 84% to £40m year on year, at the heart of the COI's media activity going forward. This, he adds, does not mean the demise of traditional media, rather that he recognises digital's potential to be "a more intimate, direct and engaging form of communication".

"The most effective, sophisticated campaigns the Government is now running, such as Change4Life, are a combination of the big broadcast media, but they also incorporate a huge amount of digital, customer relationship management and media partnerships too," he says. "So there are more complicated campaign architectures and, under those circumstances, buying media as silos just feels outdated."

The COI's 1960s Hercules House building in north Lambeth, next to a tower block with office space to rent and rows of council flats, seems a far cry from Lund's former home in Covent Garden - but he insists appearances can be deceptive.

"The business inside the walls is in many ways very similar," he points out. "It's full of bright, creative people doing stuff on behalf of clients. The difference is we are doing a greater variety of briefs than any agency."

The decision by the "L" of DLKW to take the helm at the COI came as no surprise to former business partner and chairman of the agency, Greg Delaney, who says he knew Lund was well-suited to the role from the moment he looked at the job.

"He's a great diplomat and a brilliant people person, who is fantastically intelligent," says Delaney. "I'm sure he'll do honourably well."

Lund's decision to end the successful 10-year partnership, during which time DLKW became one of the top 10 largest agencies in the country, follows the company completing its three-year earn-out deal after being sold to Creston in 2005. And, with a landmark birthday looming, Lund admits he was ready for a new challenge.

But he's not walking into uncharted territory. His predecessor, Alan Bishop, another former ad man of Saatchi & Saatchi fame, is well-regarded in the industry and by the COI itself. Bishop is credited with introducing a new sense of confidence and cohesiveness to the organisation.

Lund says he is happy to build from where Bishop left off, while focusing on better joined-up thinking, developing behavioural change expertise and increasing the use of digital engagement. Lund also brings the perspective of being a COI roster agency for most of the last decade.

He knows the importance clients now place on accountability and, with the COI acting as an agency to the many government departments, says proving effectiveness will be at the very top of his agenda.

Efficiency rating
Formed from a division of the Ministry of Information at the end of the Second World War, the COI today is bigger than it has ever been, housing about 800 staff once its regional divisions are included. But has it become too bloated?

"My background for the past 12 years has been running an organisation as efficiently and effectively as I can in a very competitive, private sector, commercial environment," says the new chief executive. "I have absolutely no interest in presiding over an organisation that is unfit for purpose or has significant waste in it."

Lund has not seen any evidence of overstaffing so far, but says he will make the COI "as good, fit and appropriate" for the next few years as he can.

"We've grown partly because there has been an increase in the number of campaigns going through us, partly because we have been offering more services, and partly because we have taken share in government from clients who weren't using us before.

"In that sense we're responding to the dynamics of our particular market. If you look at the way we've grown in terms of cost, compared to the amount we've done, we are probably more efficient now than we have ever been."

The increased use of COI by government departments is credited with saving £240m of taxpayers' money in media alone in the last financial year.

The man responsible for the independent review of the COI's media-buying systems, industry expert Douglas McArthur, says the new agenda for integration promises to bring a big step forward.

"With the new focus on outcomes rather than outputs, I believe the COI can lead the advertising industry at a time when return on investment is key," he says. Future activity by the new-look COI will, ultimately, be determined after the next General Election.

While Lund is confident media spend for 2009/10 will remain "largely in line with the previous year",  anything beyond that is not known, suggesting evidence of the effectiveness of the COI and its campaigns needs to be robust if it is to remain the UK's biggest advertiser.

Should the COI rationalise its roster?

Bob Wootton,
Director of media and advertising, ISBA

The COI is certainly right to be looking to rationalise its roster. As the UK's highest-spending advertiser, with a skilled and dedicated team in place and its agencies segmented by media channel, the COI is already in an excellent trading position.

My guess is the decision to consolidate the media-buying accounts is about being well placed to exploit further added value from the truly convergent, joined-up and powerful multichannel and multi-platform solutions that media owners now offer.

Morag Blazey
Former chief executive, PHD
I understand why the COI used to go with the best in class, because some agencies were great TV or press buyers, but the market isn't like that any more. This is absolutely the right step forward for the COI portfolio.

The COI is not a traditional advertiser and media owners have multiple platforms, so to split buying and ring-fence deals within a medium is nuts. The COI will go to a big network and will continue to get very good media value delivered in a much more effective way.

Andy Pearch
Co-founder, Billetts, now a director at Media Sense
The inefficiencies and complexities of the COI's approach are incompatible with the speed and flexibility demanded of today's top performers, and the commercial timing is right to re-engage with an industry in distress.

By the time this recession and the next election are over, the media trading market will look different. Digital channels will be even more important, cross-platform deals will proliferate and new and powerful players will have emerged. With budgets under increasing scrutiny, it is responsible of the COI to leverage more value for taxpayers' money.

Mark Henshaw
Partner and head of media and entertainment group Grant Thornton

Consolidating media buying in the multi-platform age is more and more common. Whether it is practical for the size and complexity of the COI remains to be seen. The strategy will require an adaptable agency and having all its eggs in one basket will not be without risk.

There must be a belief that centralising expenditure into a single procurement will enable the COI to use its considerable purchasing power to buy advertising at cheaper rates.

The Government's media buying agencies

The COI currently splits its six media buying contracts by medium across five agencies. Until the purchasing and planning contracts expire in March 2010, Carat holds the TV and cinema accounts, MediaCom handles press, I-Level looks after digital, Starcom buys radio and Posterscope manages outdoor.

There are 13 agencies on the roster for the COI's communications planning framework, including PHD, Naked, Arena BLM, Manning Gottlieb OMD, Mediaedge:cia, Mindshare and ZenithOptimedia. Under the existing comms planning framework, which also expires in March 2010, the COI and the client typically invite three or four agencies to pitch for each brief on a project-by-project basis.

MediaCom
MediaCom retained the COI's press purchasing and planning contract in December 2005, when it was valued at £35m. MediaCom, the incumbent, fought off competition from Starcom, Walker Media and Initiative to secure the brief and the WPP agency has now handled the COI's press buying since 2000.

This year's major project is the ongoing swine flu campaign for the Department of Health. The ads launched in May across all national press titles, including a recent burst of double-page factual spreads about the disease. In the past year, MediaCom has also bought media space for the Home Office's Know Your Limits campaign and the Department of Health's Change4Life

Carat
Carat won the COI's £70m TV planning and buying account in April 2005, after a four-way pitch that marked the end of the COI's 13-year relationship with incumbent Starcom MediaVest. One year later, Carat also secured the Government's cinema purchasing and planning business, then worth £4.5m, beating Manning Gottlieb OMD and Mindshare in the final stages of the pitch.

Memorable broadcast ads for the COI include the Know Your Limits anti-alcohol abuse campaign, featuring a man falling from scaffolding while drunk, and the FAST stroke awareness marketing.

Starcom
One month after losing the COI's TV-buying business to Carat, Starcom went some way towards making up for the loss by winning the Government's radio account. Starcom won the radio buying business in May 2005 from incumbent OMD, with Carat, Mindshare and ZenithOptimedia also competing in the pitch.

The Nielsen Company puts the Government's radio ad spend in 2008 at £47.6m. Recent radio marketing includes the campaign for RAF Stewards, as well as the Home Office's multi-platform anti-knife crime initiative and a project aimed at tackling drink-driving for the Department of Transport.

I-Level
I-Level retained the online planning and buying business for COI in January this year in a deal worth a reported £29m. Interestingly, given last month's announcement that the COI is to consolidate its media buying contracts, the Government only extended I-Level's contract for a year, rather than holding a full review for the business. The independent digital agency has handled the COI's online media buying since 2000, successfully retaining the account in 2003 and again in 2006.

High-profile digital campaigns in the past year include the anti-drug initiative Frank, which featured the unveiling of Sofia's Diary; a Royal Marines promotion, where I-Level commissioned three short films showing marines undertaking challenges against extreme sports professionals; and the Home Office's anti-knife crime initiative.

Posterscope
Posterscope won the COI's outdoor planning and buying brief in 2004 from Portland Outdoor - which later merged with Poster Publicity to become Kinetic - when the account was worth an estimated £7.5m. The COI's outdoor activity has become increasingly bespoke, deploying rigorous research to ensure campaigns are closely tailored to the target audience.

Posterscope's most high-profile recent campaign for the COI was the advertising drive to promote the UK smoking ban in 2007. Key marketing efforts this year include the Department of Health's anti-smoking campaign and its high-profile Change4Life anti-obesity initiative.

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