UK Royal Mail calls review after GBP30M budget cut
The Royal Mail has called a radical review of its marketing budget, including advertising, in an attempt to cut costs. The move comes as the company announces plans to slash its £80m marketing spend by up to £30m.
Bates UK handles the £40m creative account for the advertiser. Royal Mail uses 30 agencies across disciplines such as advertising, direct mail, sales promotion and design. Its sales promotion and direct marketing agencies include Claydon Heeley Jones Mason, Joshua and Reef.
The media buying account held by Carat is not being reviewed, although is subject to budget cuts.
Royal Mail marketing director Paul Rich says that he wants to use “significantly fewer” than 30 agencies. The company is believed to be reducing its marketing spend to between £50m and £60m for 2003 to 2004, from £80m in 2002.
Rich says: “This does not mean we are backing away from marketing. We are trying to focus our efforts and I’m trying to achieve some economies.”
The procurement department will also play its part in the review. “We get judged by business results, not just how nice the marketing is,” Rich adds.
Rich says integration will be key to Royal Mail’s plans and wants to partner “best of breed” agencies with “through-the-line” capabilities. Agency groups that can offer different parts of the marketing mix will also be considered.
New contracts will be in place from June and will be for three years initially.
