Govt pays £78m to two agencies for COVID-19 messaging

Government has spent further £8.4m on Brexit-related work.

MullenLowe London created the 'Hands. Face. Space' campaign
MullenLowe London created the 'Hands. Face. Space' campaign

The government has paid MullenLowe London and Manning Gottlieb OMD £78.4m on COVID-19 communications so far in 2020.

Campaign's analysis of Cabinet Office figures shows that MullenLowe was paid £5.2m for its work on ads such as "Hands. Face. Space" and "Enjoy summer safely". The Interpublic agency received £1.1m in May, £1.6m in June, £860,000 in July and £1.6m in August.

The Cabinet Office releases data on any spend over £25,000 by month and figures currently go up to August.

MG OMD, a subsidiary of Omnicom, received £72.7m, which breaks down as: £6.1m in May, £26.8m in June, £31.5m in July and £8.3m in August.

Much of the agency's payments would go towards the buying of media as opposed to fees directly to the agency, although the exact proportion would depend on the account as well as the client.

MG OMD won the government's buying account in 2018, when it was worth an estimated £150m a year, and it set up a special unit, OmniGov, to handle what is almost certainly its largest client.

Ian Graham, partner at Moore Kingston Smith, said: "OMD Group's last publicly filed accounts (to 31 December 2018) showed that, across their whole business, their fees were 10.6% of total media billings (£95.3m of £903.5m). While the agency's exact fee on this account is unknown, given its size and subject to government procurement, it's reasonable to assume it will be below that average."

There were other agencies that handled COVID-19 work. Engine was paid £365,000, while WPP's Wavemaker received £98,000, with both sets of payments made in June.

Meanwhile, the government has spent £8.4m on Brexit-related communications this year. It appeared to have gradually reduced spending as the coronavirus outbreak took hold, from almost £500,000 in March to just £195,000 in June.

However, spend in this area increased significantly to £3.6m and £3.5m in July and August respectively, likely as a result of the government stepping up negotiations with the European Union.

MG OMD accounted for the majority of payments, receiving £7.3m so far in 2020. Other agencies that have been paid for Brexit work since the start of the year were Engine, MullenLowe and Wavemaker, with their combined payments totalling £1.1m.

As the lead creative shop on coronavirus-related activity while also handling some work on Brexit, MullenLowe has likely seen a boon in earnings from the government at a time when rival agencies have seen a slump in fees from clients in the private sector.

The agency's latest declared income was £33.7m in 2018, according to its Campaign School Report.

Graham said: "It's important to view the total government spend of £78.4m [for COVID-19 so far this year] in context. Combined billings of the biggest 30 media agencies in the UK were recorded at over £10bn in their last available accounts. In this light, the spend looks extremely modest.

"The fees for OMD and MullenLowe will doubtless have been very welcome to both of those businesses at a time when many brands significantly reduced their spend on both media and creative work.

"A combination of reduced hours, salary cuts and the government job retention scheme got a lot of businesses through the spring and summer. However, as the furlough scheme winds down, this sort of relatively modest spend, while welcome for both OMD and MullenLowe, is no substitute for meaningful government support across the whole sector."

Elsewhere, the government also paid agencies for work away from the two key areas of Covid-19 and Brexit. M&C Saatchi received £888,000 for work on the international branch of the Government Communication Service, while 3SG OMD was paid £531,000 for the same client.

Engine received payments for a people survey and the Geospatial Commission, and MG OMD was also paid for research work and for a "finance business partnering team".

The government's coronavirus messaging continues to evolve because of a second wave of infections this autumn and variations across the UK, as different regions, including parts of Scotland, the north west of England and Leicester, have imposed tougher restrictions to tackle local outbreaks.

A version of this article first appeared on PRWeek sister title Campaign

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