Another Government ad campaign by Ted Horton. Another Furore. This article for The Australian looked at whether the Howard government spent too much on its advertising in 2000. It’s worth revisiting.
DON’T smoke. Don’t take drugs. Don’t drink and drive. Pay taxes, get private health cover — vote. The chant of a nanny government costs each Australian about $4 a year. A total of $72 million is spent on government advertising in an average year — until an election nears.
In the past 18 months the Howard Government, facing a tough election, has doubled its ad spend.
In 2000, with the launch of the new tax system, more than $151 million was spent. The trend is continuing this year with more than $71 million spent up to June 30.
That makes $8 per man, woman and child. Perhaps that could be doubled again when state advertising is lumped in
By Ed Charles
Worldwide, it has been an open secret that governments increase their advertising expenditure prior to elections. In Britain, ad expenditure through the Central Office of Information, the UK Government’s communications department, increased from $159 million in 1995-96 to $283.8 million in 1999-2000. It reached a staggering $157 million spent — prior to Prime Minister Tony Blair’s landslide victory — in the first quarter of 2001, compared with $61.1 million for the same quarter in 2000.
Advertising is an easy target. It remains high profile and flamboyant at a time of growing consumer cynicism. This has caught the eye of the Opposition here in Australia, which is determined to make government advertising an election issue. Questions in the House continually attack the Government’s spending on advertising. A favourite punching bag is the new tax system campaign, the largest advertising campaign this country has seen.
Senator John Faulkner, Opposition spokesman on public administration and government services, is releasing regular Ad Watch press releases claiming that the Government will spend $20 million a month on advertising until October, but the figure is disputed. According to estimates from AC Neilsen AdEx, $38.4 million will be spent by the Government over the three months to October — an average of $12.8 million a month. But it’s impossible to be accurate. The Government Communications Unit, which co-ordinates government advertising from within the Department of the Prime Minister and Cabinet, has been gagged from responding to the Opposition’s figures.
Naturally, the Advertising Federation of Australia is concerned that the industry’s image could be tarnished. Its members are also worried that a Labor Government would fulfil its promise to cut advertising spending by 15 per cent each year until 2004.
“The AFA doesn’t want to get involved in the question [of how much is spent] but in the creative and effective use of advertising,” says AFA spokesman Chris Thomas.
Rob Clarke, chairman of the AFA and area director of ad agency group Bcom3, admits there is a tendency towards electioneering among governments. “It’s not new. It’s the usual four-yearly cycle,” he says. “My personal point of view is that I don’t want to see my tax dollars wasted … I’d like to think that the Government is conveying information that is important.”
The AFA is planning to meet with Senator Faulkner to put the case for government advertising. It will focus on government campaigns, particularly in the health sector, which have used taxpayers’ money effectively. The problem is defining what constitutes an
effective advertising campaign.
For a commercial company it might mean increasing sales and profits, although it is contentious how other influences such as public relations or packaging can be removed from the equation. But what does effectiveness mean to government departments where mostly the objectives are not financial?
On private health insurance, for example, Australian Medical Association president Dr Kerryn Phelps has attacked the health insurance “gap” advertising campaign. She says it is confusing, partly because it was done without consultation with doctors. But how can the effectiveness of such a campaign be quantified?
This question is especially important in the case of a campaign the size of the tax reform initiative, a central plank of government policy, which cost somewhere between $98 million and $500 million.
Usually, Harold Mitchell, the ebullient founder and chairman of Mitchell & Partners, the Government’s master media buying agency, would be forthcoming on such an issue. But at present he chooses not to speak about what goes on behind the closed doors of the Australian Taxation Office and the Department of the Prime Minister and Cabinet.
His agency was responsible for buying the $151 million spent on campaign (as opposed to recruitment) advertising last year, including the placement of the controversial tax campaign. Mitchell has held the four-year contract since 1998 and it receives a fixed fee.
It is unclear how Mitchell’s remuneration scale shifts as advertising volumes, and hence workload, increase, or what scale of
bonus can be expected for striking advertising deals at rates lower than specified government targets.
Mitchell, who has an office just 30m down the corridor from the Government Communications Unit in Canberra, referred Media to its deputy head, Louise Courtney, for enlightenment.
She was unable to supply a figure for the tax reform campaign, but referred this writer to Senate Estimates Committee hearings and the Office of the Prime Minister and Cabinet’s annual report, which shed no light at all on the issue.
In theory, the figures can be checked in the Senate Estimates Committee hearings or in parliamentary answers.
In May 2000 Senator Faulkner estimated the campaign cost about $360 million. The Government estimate was between $92 million and $98 million. More than a year later we are no nearer to finding the actual cost.
The ATO’s press office says: “We don’t have any publicly available figures in any documents on the GST or tax advertising.”
Howard told parliament on June 20 that $390.4 million of the budget was not advertising at all. It included $35 million on publications, $9 million for “adviser education” and $119 million on educational seminars and workshops. A further $287 million went to delivering 1.9 million certificates to small and medium enterprises. The figure for advertising was not disclosed. But what was the total budget and how much was spent on advertising? Somehow the words “accountability” and “public” come to mind.
For the Government, when assessing the effectiveness of advertising, it is difficult to isolate the effects of other promotional disciplines, such as public relations and direct mail.
If $30 billion of new tax revenue is eventually raised each year, and the promotional campaign cost $500 million as alleged by Labor, the return on investment is $60 for every $1 spent. If $12 billion in tax savings is delivered then the return on investment is $24 for each $1 spent. But who is to say all these financial gains are directly the result of advertising?
Paul Nix, head of external relations at Procter & Gamble, one of Australia’s largest advertisers, says of the tax reform ad campaign: “It was a tremendous waste of taxpayers’ money. At that time, during the five months the tax campaign ran, it was difficult for mainstream advertisers to buy airtime.”
Nix asked his media buying agency Zenith, which handles the NSW Government’s media buying account, to analyse the tax campaign for a case study presented at an industry seminar earlier this year.
According to the analysis, about $40 million was spent on tax advertising between February and July 2000. A total of 28 commercials were produced to communicate the new system — GST assistance, Australian Business Numbers and a raft of other initiatives.
“Some people in Adelaide and Perth saw the ad 50 to 60 times a week when three to five times would have been more appropriate.” In Sydney, where the least ads ran out of the five state capitals, he found that 85 per cent of people saw the campaign 10 or more times. And 54 per cent of people over the age of 18 saw the ads 20 times or more.
Nix’s point is that the Government should reassess its media schedules, which tend to be concentrated, short one-off campaigns rather than longer term awareness-building campaigns. It is an established fact in advertising that there is an optimum range of advertising exposure that hits consumers but doesn’t bludgeon them and turn them against a product. Unfortunately, as with many post-Christmas sales ads, the tax reform campaign fell into the bludgeoning part of the curve.
Courtney and Mitchell counter Nix’s arguments with a blunt and simple attack: Nix is unqualified to comment as he was not privy to the campaign objectives and is an expert in consumer brands rather than government communications.
Few ad agencies or media buyers are prepared to comment on the issue publicly for fear of jeopardising their government accounts. The CEO of one major buyer said he thought the problem was that the frequency of the GST advertising was so high because the creative aspect of the campaign was poor.
“A really outstanding commercial that has cut through doesn’t need to run and run,” he says.
The point Nix is making is that some tens of millions of dollars could have been spent elsewhere if the ATO had better planned the media for its campaign. “The real issue is: is the minister trying to make a political message or give information,” he says.
What do citizens need to know?
TO establish what is effective government advertising, it is necessary to assess what the Government needs to tell the public.
This is a grey area which the Auditor-General investigated in 1998 at the request of the Leader of the Opposition in the Senate, John Faulkner. The inquiry looked at the Government’s community education and information program for the new taxation system prior to its re-election.
The Auditor-General found the information program was for a “Commonwealth purpose” and that the controversial use of an advance of funds was legal.
What was revealed in figures submitted, was that every year prior to an election governments increased their advertising expenditure.
The Australian National Audit Office suggested a parliamentary review of government advertising and information arrangements to help determine whether time and expenditure limits and guidelines for the period leading up to elections were needed.
What has given the Opposition, which presented the Government Advertising (Objectivity, Fairness and Accountability) Bill 2000, fuel for attack is that the Government has made no move towards taking these suggestions on board and has even increased its advertising expenditure prior to this year’s election.
The Office of the Prime Minister and the Cabinet points out that the current guidelines were established by a Labor government.
The Bill, which does not have government support and has not progressed beyond tabling, proposes that prior to contemplating a campaign a market need should be established, a departmental practice that is a boon to market research agencies.
It states that campaigns should be focused on “accurate, veritable facts carefully and precisely expressed”.
Most importantly, it notes that material should be distributed in an economic and relevant manner and that a justifiable cost-benefit analysis should be undertaken with regard to identified objectives.