At this stage, it's unclear whether Orange Guy will be hanging around for another election campaign. Photo / File
A new creative team will be charged with the responsibility of convincing New Zealanders to head to the polls in the lead up to next year's general election.
The Electoral Commission confirmed to the Herald this week it has appointed ad agency FCB to lead the 2020 campaign – and in doing so take over the curatorship of the anthropomorphic blob colloquially known as Orange Guy.
Asked whether Orange Guy would be hanging around for another election, FCB staff kept their creative cards close to their chests.
This account move will see the agency take over from competing ad shop Saatchi & Saatchi NZ, the creative engine behind the last two election campaigns.
The pressure will be on the new agency to ensure it manages to lift voter turnout, which in recent years has languished some way behind the highs of the 80s and 90s. While turnout has lifted marginally in recent years – from 74 per cent in 2011 to 79 per cent in 2017 – the government will want to see figures rise, particularly among younger Kiwis.
In appointing FCB, the Electoral Commission has chosen a partner well-versed in the government space, with the agency having previously pulled together campaigns for the Health Promotion Agency, Water Safety NZ and WorkSafe NZ, among others.
However, FCB could find it more challenging to win those lucrative government accounts in coming years as new rules take effect.
A spokesman for Economic Development Minister David Parker told the Herald this week that from October 1, Government Procurement Rules will be updated to require government agencies to pay closer attention to the local impact of any procurement activities.
"The Government believes that procurement can do even more to achieve broader economic, environmental and social benefits, which includes increasing access for New Zealand businesses to access government contract opportunities," the spokesman said.
"Rule 17 [in the Government Procurement Rules] is a new rule that requires [government] agencies to consider how they can create opportunities for regional businesses as well as Māori, Pacific and social enterprises."
Under the rules, a New Zealand business is defined as "a business that originated in New Zealand (not being a New Zealand subsidiary of an offshore business), is majority owned or controlled by New Zealanders, and has its principal place of business in New Zealand".
The issue here is that FCB, like many of New Zealand's largest agencies, is foreign-owned, falling under the umbrella of one of the big four advertising holding companies (US-headquartered Interpublic Group in this case). The exact application of Rule 17 is still unclear at this stage, but it does seem to favour New Zealand-owned companies, who will relish the opportunity to get a better grip on the tens of millions of dollars the government spends on advertising every year.
FCB managing director Paul Shale says he isn't concerned about the rule change, saying it simply formalises an approach that has already been incorporated in the local market for some time.
"It's important not to confuse the ad holding companies with tech giants, like Google and Facebook, who pay little tax here and employ few people in the local market," Shale says.
He points out that FCB employs around 200 people in the local market and adds value not only through its government work but also through its support of local Kiwi businesses in the production, tech and acting sectors.
He says that while every government agency is likely to interpret the rules in its own way, he says FCB is simply going to "triple down" on showing the value the agency can deliver to Government and thereby to Kiwis on the ground.
"We have to focus on more than the ownership structure. Working with a locally owned agency doesn't necessarily mean you'll get the results you're looking for."
Tony Bradbourne, the executive creative director of Special Group, one of the nation's biggest and most successful independent ad agencies, says a discussion about extraction of money from the local market by the big holding companies is well overdue.
"We all hear about the Australian banks and how they send their profits offshore," Bradbourne says.
"Yet, a majority of the agencies that the New Zealand government puts taxpayer money into are foreign-owned. A decent chunk of that money goes straight offshore without it making any impact in the local market. It's a huge thing we're not even looking at."
It's unclear precisely how much money New Zealand-based agencies are sending to their international head offices, but some estimates suggest that the extraction rate sits at around 10 to 20 per cent of profit for the major agencies.
Bradbourne says the strength of being an independent agency lies in being able to invest profit back into the local market without having to answer to an overlord asking to deliver more growth every year.
"Our independence allows us to invest in stuff where there might not be a return on investment for six months or so," he says, pointing to the example Special Group currently mulling the potential of opening a new office in Wellington.
"There's no question, if that money went into independent agencies, it would be spent on more staff," he says.
The point he makes here is that if the government were to spend more with local agencies a larger chunk of those funds would go toward growing the industry at a local level – and he believes this is something the government should be taking into account every time it puts out a request for proposal.
Under the Rule 17 changes, some government agencies may well feel compelled to take greater consideration of whether an agency is independent or foreign-owned but this isn't the only matter at hand. The appointed ad shop still needs to do the job, and the perception persists that independent operators simply aren't as good as their international counterparts.
Bradbourne firmly rejects this notion, saying that independent agencies like Alt, MBM and Special Group have shown time and again that the thinking coming out of their shops can rival any of the big players.
That said, these three agencies are somewhat unique in their adherence to independence for so long. In advertising, it isn't uncommon for the big holding companies to spot a talented group and then swoop in with a buyout offer.
This means that any investment the government makes in a standout independent agency today could end up shifting into one of the holding companies should the right deal come along.
After a decade of independence, Bradbourne laughs in admitting that he's heard some strange rumours about Special Group being sold over the years. But he's nowhere near ready to do this yet.
"I don't understand why you'd struggle to stand out and be different, just to be sold back into the dome of the industry," he says.
"I've seen a lot of great agencies just disappear – and what's the point of that?"
This is not to say that Bradbourne is anti-selling altogether. He says that if a partnership opportunity arose that allowed the agency to grow and continue working on interesting briefs, then he'd consider it.
"If there was a media company that wanted to acquire a portion of Special and would allow us to open sister companies across the US and Asia, of course we'd think about that," he says.
"It would allow us to get bigger, take out more international briefs and allow us to take our unique New Zealand thinking to the world."
What he doesn't want to become, however, is just another independent agency swallowed up by a big holding company.
"To just fold into a WPP holding company thing doesn't excite us at the moment because I don't know what we'd get out of it," he says.
"Unless we wanted to retire. And we're too fit and young to do that."
Media firm reports tougher landscape - but sticks with profit and revenue guidance.