MARKETING FOCUS: Labour losses, Labour gains

A new report says the advertising industry will lose out under a Labour

government, writes Katharine Raymond

In 1979 the Tories won an election with the help of Saatchi & Saatchi’s

‘Labour Isn’t Working’ advertising campaign. In 1996 the Tories used

posters to depict Labour’s Tony Blair as the devil. As it approaches the

general election, New Labour may well be asking itself: ‘What has the

advertising industry ever done for us?’ Could this be payback time?

According to The Devil’s in the Details, a new report by Ogilvy & Mather

on how Labour policies may affect the marketing industry, advertising

could be in for a hard time. It is one of the losers identified in the

report, whose authors, Simeon Duckworth and David Muir (pictured), argue

that increased media fragmentation and tougher legislation will divert a

lot of expenditure away from above-the-line media.

Nigel Griffiths MP, once Labour’s City spokesman and now the party’s

consumer affairs expert, is dismissive of claims that the marketing and

advertising industry is in for a hard time under Blair. ‘It’s ludicrous

to say that advertising agencies will lose out under a Labour

government. I’ve met with 20 different large agencies and not one of

them has expressed any fears on that score.’

Interestingly, Griffiths says O&M has not been one of the agencies

banging on his door. ‘O&M hasn’t approached me or attempted to arrange a

meeting with me.’

The report does conclude that Labour’s macroeconomic policies will not

have an adverse effect on business in general, but Muir stresses the

need to read the small print. ‘In the past you could predict how Labour

would act because of its strong ideological anchor. That anchor has

slipped, so it is harder to predict. That’s why nuance and detail are

important.’

According to Muir, an example of this ‘nuance’ is Labour’s belief in

markets. ‘Markets are generally a good thing, but some require more

government involvement than others. Some, like advertising, will be

reined back.’ A major reason for thinking that Labour will get tough on

advertising is its voter-friendly pledge to ban tobacco advertising.

Muir warns that a UK ban is likely to trigger a pan-European ban as the

balance of votes in Brussels tips in favour of the anti-tobacco lobby.

As well as spelling disaster for agencies with pan-European tobacco

accounts, this would set a crucial ideological precedent. Advertising to

children could be the next to go under the spotlight, followed by

financial services and utilities.

Winston Fletcher, chairman of the Advertising Association, shares this

view. The problem, he points out, is that as soon as tobacco advertising

is banned, the many pressure groups anxious to ban other sectors of

advertising will ‘smell blood’. Griffiths disagrees: ‘Nonsense. A Labour

government certainly means bad news for the tobacco industry, but it

certainly does not mean bad news for the advertising industry or for

other industries.’

Pro-business noises

David Pugh, commercial director for Mills & Allen, shrugs off the

suggestion that the loss of revenue from tobacco advertising will badly

affect the poster companies. ‘Labour is making far more pro-business

noises than ever before,’ he says.

‘If this was happening ten years ago, when tobacco advertising made up

25% of our revenue, I would have been a worried man. But now tobacco is

between just 8% and 9%. Seventy-five percent of the top 200 advertisers

use posters; five years ago it was only 35%. Posters are doing very well

generally and that trend will continue.’

According to Pugh, the increased fragmentation of television has also

helped to make posters more attractive. ‘The more competition there is

between the television companies, the better it is for us. Television

advertising will become a targeted, niche market. Everyone gets to see

posters and companies realise that.’

But what about the rest of the industry? ‘One can only speculate, but

Labour is making the right noises. The industry is generally very good

at self-regulation, and Labour appears to recognise that. One can’t tell

yet, but I don’t really think the industry has anything to fear,’ says

Pugh.

Dr Lewis Moonie MP, broadcasting spokesman for Labour, admits that a new

communications policy - a key part of New Labour’s manifesto - means

that ITV and Channel 4 will have to ‘work harder to keep advertisers’,

and ad spending certainly ‘won’t go up’. But he points out that

companies will continue to want high quality advertisements on high

quality channels. ‘Television companies will need to retain viewers in

order to attract advertisers, so overall quality will be good,’ he says.

Suggestions that Labour will increase the regulation of television by

introducing a ‘clearing house’ to check advertising copy before it is

broadcast is dismissed by both Moonie and Griffiths. ‘I see no reason

why advertisers should be treated any differently from programme makers

in that respect,’ says Moonie. ‘Standards and controls are already very

reasonable and the idea of creating a clearing house for ads is

nonsense. We already have more than enough regulation. I want to see it

simplified, not added to.’

Griffiths has already said that the Advertising Standards Authority will

be given more power under a Labour government, allowing it to impose

fines on ‘bad’ advertisers and repeat offenders. David Pugh believes

that it is a sensible move to ‘give the ASA more teeth’.

Self-regulation

Despite recent complaints that the ASA is losing credibility, it is

still perceived by many as being the best way of ensuring standards are

adhered to. Direct government involvement is the only alternative and is

the least popular. As Griffiths points out: ‘By strengthening the ASA

we’re giving it another arrow to the quiver. It is the ASA, not the

government, that regulates advertising; it is not government that can

expel an agency or refer it to the director-general. This is self

regulation.’

Others are concerned that Labour will get tough on alcopops, currently

the fastest growing alcohol section. ‘Not if we can help it, and not if

brewers are able to regulate themselves,’ says Griffiths. Brewers and

distillers have already widened their code of conduct on marketing to

young consumers which includes guidelines on the marketing, naming, and

promotion of alcoholic drinks to prevent them being aimed at underage

drinkers.

‘Labour wants this voluntary code to work,’ says Griffiths. ‘If it

doesn’t, then I will take action. If the industry cannot regulate

itself, the government will step in. But that would be, from the

industry’s point of view, an admission of failure; it would show a lack

of self-discipline. They don’t want that either.’

But there is one thing that New Labour may well be really tough on.

Griffiths has been inviting - and receiving - submissions for some time

on introducing legislation that would make it extremely difficult for

own-label products such as Sainsbury’s cola to imitate brands like Coke.

Labour has not made a decision, but Griffiths admits to being

sympathetic to the view that lookalike products are unfair. As he points

out, he has had countless representations from companies on the subject.

None, as yet, have come from the supermarkets.

However, as Muir argues, a ‘get tough on copycats’ policy does not fit

in with Labour’s aggressively pro-competition stance. Competition, it

argues, stimulates innovation and is best for the consumer. Own-label is

seen by Labour as increasing choice and representing value for money. It

also allows the retailers to be more competitive. So, even if new

legislation to make copying harder is introduced, brands may find life a

little harder under Labour.

How we compare in Europe

If Tony Blair does get tougher on advertising, what precedents have been

set in the rest of Europe?

A recent document published by the EC, which details current

restrictions in force throughout Europe, makes for interesting, if

rather confusing, reading.

The EC is keen to bring differences in national policy into line on the

grounds that the different rulings across 14 countries are confusing to

consumers.

Germany

Cold-call selling is banned (creating a problem not just for double-

glazing salesmen, but for the political parties). Advertising that may

induce children to smoke is outlawed and food advertising must include

full-label information.

France

All promotional gifts are banned, as is alcohol sponsorship of sport.

Nudity is still the most controversial issue. A recent French ad for

Perrier which showed three topless women wearing Perrier caps, was met

with disgust. The Italians objected to a poster featuring the wife of

European Commissioner Carlo Ripa di Meana posing naked for an

International Fund for Animal Welfare ad, which used the line ‘This is

the only fur I am prepared to wear’.

The Netherlands

Despite its reputation for ‘social’ liberalism, use of the female body

in advertising is strictly controlled, as is the content of TV

commercials for alcohol. Tobacco advertising on TV is banned in all EC

countries, and only Britain and Spain permit radio advertisements.

Denmark

As in Germany, certain types of toys cannot be advertised, while alcohol

can only be advertised in the press.

Naturally, advertisers are as eager to prevent harmonising of rules

across Europe as the Commission is to impose them. According to the pan-

European self-regulatory body, the European Advertising Standards

Alliance, harmonisation of standards would conflict with economic and

cultural differences - such as attitudes to religion or sex - that exist

in different countries.

Rober Halfon, head of research for Market Access, a UK-based

international political consultancy, says the EC is trying to impose

unnecessary regulation: ‘We want a Europe of diversity, not of

uniformity. Advertising is part of a nation’s identity and if separate

countries are happy with their systems and regulations, why on earth

change it?’

This article was first published on Marketing