Live Issue... Government spending attracts networks in Singapore

Singapore’s Government has never been so popular - at least, not among the ad community. Although most companies are expected to cut back on marketing spend this year, the Government is one source of business that is not letting up.

From tenders for the National Council on Problem Gambling to the Ministry of Community Development, Youth and Sports, there seems to be no shortage of fresh business opportunities. Mandatory reviews that are part and parcel of every government agency or statutory board as contracts expire mean some eye-catching accounts were up for grabs towards the end of 2008 - most notably the Singapore Tourism Board account and several pieces of Health Promotion Board business.

“It’s all about economics in Singapore,” says Anand Vathiyar, MD of UP Brandbuzz. “In a downturn, the Government is taking the initiative to spearhead and jumpstart businesses, so it’s the same for our industry as well.”

With other business proving scarce, even smaller Government pitches are pulling in MNC agencies. As many as 21 advertising agencies and design houses including BBDO, Leo Burnett, Ogilvy and Saatchi & Saatchi were in the running for a local economic board’s tender in late September, while 24 agencies including Dentsu and Euro RSCG responded to the Singapore Sports Council’s call for creative partners.

According to one account director who has participated in Government pitches, the MNCs would not normally go for some of the accounts up for tender. Most Government briefs do not offer much leeway for creative or strategic executions, but are mainly dry exercises to churn out public-service announcements or mass-volume collaterals.

“But it’s not all small money,” says another source. “With some accounts in the range of S$3 million (US$2 million) to S$5 million, agencies will be going for more Government businesses like bees to honey. Government agencies also pay well as, unlike private companies which have to balance their accounts, the authorities don’t bargain down.”

One agency ECD, however, cautions against blindly going for every Government business, as the tendering process usually takes up huge amounts of time and manpower resources. “Government accounts are like a lottery,” he adds, in reference to not knowing if the appointed agency was selected based on merit or price.

For the smaller shops that rely on mid-sized Government business, the arrival of the networks into the pitches looks like bad news. However, a local agency account head argues that the big agencies should not be overconfident. “The Government boards are also getting very prudent. Cost is definitely going to be more of an issue for them,” she says, arguing that this will play into the local agencies’ hands. “They were keen to work with international agencies in the past. But over the course of last year and this coming year, we’ll see a greater number of smaller local agencies coming into the picture.”

With resources and budgets at a premium, agencies can expect greater scrutiny as they look for the next chunk of Government business. That prospect is echoed by Vathiyar. “The downturn allows smaller shops to review their business processes to make sure they can compete with the bigger shops, and not just on price,” he says.

“The bigger shops will be hungrier in a recession. It’s survival of the fittest, but quality of ideas still wins at the end of the day. And Government people, like all clients, will always be open to the best ideas.”

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