Advertising sector rejigs to net dollars

By Dita de Boni

Advertising and marketing in 1999: the year that revealed our greatest advertising export (Kevin Roberts) and advertised our greatest national expletive ("Bugger!").

But for the industry, the Kevin Roberts incident was little more than confirmation that advertising is a fast and loose business and "Bugger!" a simple idea carried more by controversy than a cutting-edge concept.

While less bombastic, the larger issues for advertisers and marketers last year were widely shared by other industries: cautious optimism as economic buoyancy returned, confusion over the importance of the internet, the increasing "Aussie-fication" of corporate head offices, and restructuring of services by advertising and marketing agencies.

Adspend figures for 1998 - released last March - began the year in less-than-spectacular fashion. David Innes from the Advertising Agencies Association says that while 1998 saw a drop in real expenditure on advertising - the worst in almost 10 years - the lead into Christmas 1999 witnessed a "genuine pick-up" in the economy that fed down the food chain to advertisers and their agencies.

He predicts, however, that the adspend for 1999 - which will be known in March - will be almost "dead level" with 1998's $1.376 billion, as the first half of the current year continued 1998's poor take and was "unmitigated rubbish", he says.

"In a recession, advertising suffers. The year has been very competitive. Things like new car sales being devastated by cheap second-hand imports from Japan has a huge impact on [that sector's] adspend."

But he says tough competitive areas like telecommunications have provided more, not less, work for agencies and in stagnant economic times that generally produce risk averse advertising, companies like Clear ("I am not a number") have led the pack for edgy concepts.

For traditional media outlets, results showed no such ambiguity. The year saw further small declines in circulation for most daily papers, although an increasing consumer desire for weekend leisure reading meant Sunday papers narrowly escaped the downward trend.

Commercial radio triumphed in 1999. Relative new-media newcomers like cinema box office and outdoor advertising agency Buspak experienced significant revenue jumps, signalling a more diverse approach to advertising and marketing campaigns.

Television revenue jumped five per cent on 1998, but that medium is having to develop product tie-ins, sponsorships and multi-channel packages to market itself as a more sophisticated medium.

"With a proliferation of channels and significant movements to pay television, the old days of pumping a 10-minute pod of ads at consumers is all but over," says Mr Innes.

"Things like product placement within films will evolve - but those emerging fields of advertising will require much more learning and resources."

Topping all new media for popularity was the growth of the internet as part of the ad/marketing package of services now expected to be in place for consumer reference.

Marketing magazine reported in September that 60 per cent of companies surveyed mid-year used the internet to advertise products and services and 72,000 Kiwis shopped online.

But the same survey found 90 per cent of online shipping was done through overseas sites. There is a general perception that ad/marketers must do more to grab some of that outflowing expenditure - estimated at $1 billion by 2002.

Tom Agee, a marketing/advertising consultant and Auckland university lecturer, says the convergence of digital TV incorporating a computer will bring the internet into the living room.

A chance for advertisers to get even closer to consumers? Mr Agee says "TV-net" will simply mean "the control shifts from the advertiser and the mass media to the individual, who will seek out what advertising he or she wishes to view or interact with."

While the exponential growth of those having access to the internet and the growth of e-commerce was a stand-out trend of 1999, he concludes: "No one can be certain where e-commerce will take us and in what form."

Marketing editor Ruth Le Pla concurs, saying that although companies are quick to identify the internet as a sales and marketing vehicle and e-commerce facilities continue to abound, "marketers haven't worked [the internet] out yet. The question is how to drive people to know you are there on the net.

"Paradoxically, as marketing has gone towards virtuality, the old-fashioned touch-and-feel-type stores like Borders have boomed."

Ms Le Pla says more salient for the industry in 1999 was the continuing trend to moving corporate head offices across the Tasman.

An industry study mid-year found marketing is now considered one of the top three management functions, reflected in the fact marketing departments are increasingly disappearing from New Zealand, along with corporate governance.

Although "Australasian" campaigns are often now being developed by Australia-based marketers, she says the idea that Australian and New Zealand consumers are identical is a misconception and leads to "imagery not tuned to the hearts and minds" of New Zealanders.

She gives the example of an Australasian campaign by Canadian-based frozen-food producer McCains, which uses the catchphrase "Aah, McCains, you've done it again" - leaving New Zealanders to wonder exactly what they've done again.

Mr Agee, adding that Pacific Rim offices are also influencing campaigns, says other global trends such as multinational agencies buying up smaller agencies to gain worldwide reach have rippled across to our shores.

Service provision has also metamorphosed: the integration of advertising, public relations, sales promotion and direct marketing into "one-stop-shop" agencies has flourished alongside a proliferation of small creative boutiques catering to each separate function.

Mr Agee says payment schemes to agencies have changed as well, with the "old" 20 per cent commission finally scrapped last year in favour of tailored payments and modified to compete with independent media specialists.

The increasing diversification of ad/marketing services was reflected in late November's announcement by the Advertising Agencies Association that in 2000 it would become an umbrella organisation representing a variety of communications companies.

Traditionally the champion of advertising agencies, the association will move to cover a variety of alternative communications companies, including direct marketing agencies, designers and web site companies.

Moves towards greater professionalism have also accelerated. A Chartered Institute of Marketing set up in Auckland last year will offer exams to provide the industry with its first standard benchmark.

In short, globalisation, technology and changing consumer needs will continue to affect the industry and extend this "period of earthplates moving" for ad/marketing, says Mr Innes.

Less than earthquake material, but still important, 1999 can also claim the ascendancy to Telecom chief executive of ex-marketer Theresa Gattung, a proliferation of loyalty schemes which made consumers feel special, and the gob-smacking finding from market researchers that New Zealand men were, finally at the end of the 20th century, buying their own socks.