Roster agency heads hit out at Scottish government’s confusing ‘non-essential’ ad freeze

Speaking off the record to The Drum, agency leaders were united in condemning the “out of the blue” decision and have criticized the lack of notice given for them to halt advertising projects. Many say they expect this will cause them staffing and financial issues throughout the remainder of the year.

Agencies expected to be most severely impacted by this sudden announcement include those that handle creative and media for the Scottish government’s most high-profile campaigns, which support its key strategic objectives of making Scotland ‘healthier, safer and smarter.’

According to government figures, over £6.2m was spent on public services advertising in the financial year to 2022-23. Over half of that money was spent in the area of health, such as early cancer detection, mental health, cervical cancer awareness, Covid messaging, organ donation and urgent care. That spending figure was similar for 2021-22. However, an additional £12m was spent that year on marketing around Covid.

Agencies on the creative services and digital rosters, which could be impacted by this advertising freeze, include Leith, The Union, Bright Signals, The Gate, Dentsu, Stand, The Lane Agency, John Doe Group and Drummond Central. It is also anticipated that agencies on the research roster – Jump Research, Progressive Partnership, Ipsos and BMG Research and Trinity McQueen – could also lose out if public services campaigns are cut.

Leith group managing partner Richard Marsham told The Drum the announcement has put an immediate halt to just about all government work going through the agency.

He said: “It is very disappointing news given that we’re contracted by the Scottish government to provide them with an ongoing service and are expected to have resource in place to continually deliver that service across a range of campaigns that often help save lives. Having it halted so abruptly is very hard to manage.

“It’s basically seeing marketing as a cost rather than an investment in the health and well-being of the nation. Many of our campaigns, such as road safety and early cancer detection, are critically important and I hope the Scottish government reconsiders and allows these campaigns to continue.”

Marsham told The Drum that they have already appealed to first minister Jon Swinney to re-consider any advertising moratorium, but, regardless, any pull-back on public sector advertising will impact the agency in some way, though exactly how, Marsham says, remains unclear.

“It’s too early to say as we don’t yet know the severity and longevity of the cut,” said Marsham. “We will do everything we can to protect our team, many of which were the same people that were working seven days a week during the Covid pandemic on behalf of the Scottish government, trying to keep people safe and saving lives. And the impact of this will be much wider than just us and other agencies. It will impact production companies, talent, media owners and so on.

“We’ve worked with the Scottish government for over 20 years, and this has never happened to such a scale so early in a new financial year. Whilst there has been budget saving at the end of a financial year, this is unchartered waters for all of us.”

The Scottish government currently uses five media agencies to book its campaigns – Republic of Media, Medicom Edinburgh, Carat Scotland, The Media Shop and Spirit. Those agencies have only recently re-tendered to be on the media roster, so this will come as a disappointment. One agency source stated: “If a campaign is booked then at the moment it’s running. We haven’t been instructed to cancel anything, because of the cancelation charges. Media owners aren’t going to give them much slack as there’s no mitigation, they’re just choosing to cancel their campaigns. But at the moment, we don’t have a clear definition of what will go ahead and what won’t. They’re still working through objections from the various departments, but we do estimate it’ll be the vast majority.”

Another roster agency boss coming to terms with what this decision could mean for his team and business suggested that use of the phrase “non-essential” has really confused matters: “We were told informally around a week ago and there doesn’t seem to be much positive news right now. Basically, anything [media] that’s not booked and anything that won’t incur a penalty if it’s pulled is being pulled. It’s pretty draconian.

“But, who knows what essential is? It’s a bit of a philosophical debate, isn’t it? Is recruiting nurses and teachers essential? Is the early detection of cancer essential? Is telling people from deprived sections of society about benefits essential? When does essential become not essential? This decision is almost an indication that communication from the government to the people of Scotland is not really that important.”

Naturally, many roster agencies will now be planning what this means for the remainder of their financial year and it is widely expected that it could cause severe problems for some. As one agency leader put it: “For some agencies it’s a big chunk of their income. Agencies have been told at very short notice, so there’s no time to plan. Does the government realize that they have a very direct impact on our businesses? And it’s not just the agencies that will suffer, it’s all the suppliers, the production companies, the photographers, the voiceover artists and that money filters through into the economy. Now, the interesting thing is, of course, it seems that government staff can’t be made redundant.”

Only eight weeks ago, the Scottish government’s marketing team was named ‘Marketing Team of the Year’ at The Marketing Society’s Star Awards. Now those agency bosses faced with the prospect of having to downsize their teams because of the spending cuts are asking exactly what those in a marketing team with no money to spend will be doing.

Another agency boss said: “From our perspective, the impact is very little. However, it will certainly pose challenges to one or two specific agencies. I guess it will come down to the definition of what falls under ‘essential’ messaging and the spend dedicated to that. It’s frustrating for us that while on the framework work for the most part has gone to one or two of the same agency partners. However, it means in these circumstances we are less reliant on their spend and so less affected by the cuts.”

It appears that, as yet, PR is not affected by the cost-cutting measures. When approached, one PR roster agency leader told The Drum: “This is the first I have heard of this. We are on the framework, but not doing any Scottish government work so it won’t affect us.”

In terms of what this ad freeze will mean for the government’s internal marketing team, believed to number more than 40 people, remains unclear. One agency head asked what they will be doing if they have no money to spend, but another doubts they will face redundancy, saying: “I think they’ll be protected because they’re civil servants and the Scottish government doesn’t want to be seen to be making actual job cuts. I think they’ll probably be trying to find meaningful work to do, which would be, I guess, planning for future campaigns in the hope that the next financial year will be better.”

Speaking out against the decision, Paul Bainsfair, director general at the IPA, said: “While we appreciate the challenging financial position of the current Scottish economy, we very much believe that halting spend to public service advertising is a short-term decision that could cause dramatic long and indeed short-term damage for the population at large, as well as to the economy. Furthermore, regarding the impact of this decision on the Scottish ad industry, given that the Scottish Government represents the single biggest advertiser in Scotland, any stops to public service advertising could result in a loss of jobs in the sector.”

Also voicing objection to the plan is Marie Owen, chair of AA Scotland and founder & CEO of LS Productions. She said: “Government advertising plays a crucial role in revenue-generating activities like tourism and exports as well as vital public health messaging which can reduce costs and pressures on public services. This has been demonstrated in health campaigns such as the cancer detection campaign ‘Early Bird’ by Healthier Scotland and NHS Scotland, which targets people across Scotland, particularly those from more deprived communities. Investment in advertising helps to drive growth and address societal challenges. We would strongly urge the Scottish government to recognize the importance of advertising and marketing to achieving their policy goals and rethink short-term plans to cut departmental marketing budgets.”

Coming soon after news that many Scottish pensioners are to lose winter heating allowances so the Scottish government can plug a funding black hole, one agency said it comes as “little surprise” that first minister John Swinney has chosen to cut funding for public services advertising as “hearsay” suggests Swinney is not necessarily an enthusiastic advocate of spending on public services advertising.

A spokesperson for the Scottish government said: “The Scottish government freeze on public sector marketing expenditure for the remainder of the year is a necessary decision to ensure we have a balanced budget. As both the first minister and the cabinet secretary for finance have made clear, tough decisions are having to be made across government and the wider public sector to ensure that stretched resources are used economically, efficiently and effectively.”