Is this crunch time for the COI?

The Central Office of Information's accounts for the last financial year show that the Government, one of the UK's biggest advertisers over the past decade, hiked ad spend by 15% to £157m.

But with the credit crunch biting and less money entering the Exchequer, questions are being raised over whether the COI's position as one of the UK's two top advertisers could be under threat.

TV buying director Kevin West, who looks after Carat's estimated £70m COI communications TV planning and buying account, points out that the COI is an anomaly, in that its advertising decisions are based on policy, rather than economics.

West said: "The COI is not a good barometer of where things are going, because while it might come in the top five of ad spenders, it relies on government policy and just doesn't know in advance where the Government is planning campaigns."

During the last financial year, despite the gradual onset of an economic slowdown, the Government still had a lot to shout about. The occupation of Iraq and Afghanistan, as well as concerns about the environment and child obesity, helped drive COI spend.

COI spend on digital media in particular increased significantly, by 57.6% to £35m, with £20.3m of this figure accounted for by advertising. Digital agency I-Level currently holds the COI's consolidated planning and buying account for online, thought to be worth around £6m per year.

Peter Buchanan, the COI's deputy chief executive, said: "In future, digital media ad spend will become part of the main media planning and buying unit - but whether this figure is included in the overall ad spend figures next year, has yet to be decided. We try to do the figures in a way that reflects the market."

Whether COI spend will fall further for economic reasons is less clear, although one senior TV buyer thinks that it is inevitable. "There are big problems out there," he says. "In one sense, the COI is safeguarded from recession because it does not rely on trade from abroad - but with potentially less tax revenue coming in, it will probably rein back spending".

Others are actually predicting a slight rise in COI spend next year. According to a World Advertising Research Center forecast for the Government, charities and education sector in the UK, 2009 media spend will rise by 4.7% to £670m.

WARC research director Colin McCloud said: "While growth for 2007/08 was higher, the forecast for 2009 is ahead of predictions for consumable spend, which is plummeting. This is partly because the COI is driven by perceptions of what is required, timing of elections, and so on."

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HOW THE COI SPENDS ITS ADVERTISING BUDGET

- Government advertising spend rose by 15% to £157m over the 2007/08 financial year to the end of March. Total COI spend was £391m, with ad spend accounting for 40.1% of this

- Digital was the biggest growth area last year for the COI in terms of expenditure. Spend on digital-related promotion - which is treated in a separate category to mainstream ad spend - totalled £35.4m, an increase of 57.6% year on year

- The COI was the second-biggest spender on advertising in the UK in 2007, according to Nielsen estimates for the period January to December 2007, investing £150.3m on advertising, behind only Procter & Gamble, which spent £200m

- Nielsen also reports that the COI spent most of its ad budget on TV advertising (£55.6m), followed by radio (£42.7m) and then press (£30.1m)

- COI spend on every area of non-ad-related activity, except publications, also rose last year. Spend on research rose 30% to £22.6m in 2007/08, and broadcast spend rose 29% to £17.6m.

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