Recently appointed marketing and deputy managing director Paul Rich has ordered a reduction in Royal Mail's marketing spend from about £80m last year to between £50m and £60m during the course of 2003.
Royal Mail is expected to make the savings by targeting its spend more effectively and embarking on an overhaul of its agency roster that will slash its portfolio of external suppliers. Rich declined to say how many agencies it would use once the review process was complete.
Bates UK, the incumbent on Royal Mail's above-the-line account, and shops including Claydon Heeley Jones Mason and Triangle Communications are among the agencies affected by the review, which is intended to provide a more effective and integrated agency roster.
Rich said he was focused on building strategies targeting business customers and promoting mail media to ad-vertisers. He added: "The aim of this review is to simplify the agency management process, deliver better value for money and increase effectiveness across all marketing disciplines".
The budget cut follows a restructure of Royal Mail's UK business, which has seen three business units merged into a single Letters division.
Rich was appointed marketing chief in December. The appointment coincided with Gillian Wilmot's departure from her post as managing director of Royal Mail's business and consumer markets unit (Marketing, December 5).
New agency contracts will be in place by June. The review does not affect Post Office or Parcelforce agencies or Royal Mail's media planning and buying contract.
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