Long Read - Why is New Zealand so good?

Expatriates (New Zealanders are well travelled) from across the world, wanting to return home, looking for jobs.

And the work was coming fast, with marketers anxious to build profile for their brands. On top of that, global briefs came in from advertisers seeking production and creative talent in a place where COVID-19 restrictions were light.

Saatchi & Saatchi NZ was in a pitch recently for a global fintech based in Australia.

“They explored two Australian agencies, two Californian agencies, and two New Zealand companies,” says Mark Cochrane, CEO, Saatchi & Saatchi NZ.

“Upon winning, we asked, ‘Why us?’ They talked about our optimism, the ease in which we work and the unique tone and creativity that New Zealanders bring.”

That tone is hard to define but to many there is a playfulness deep within the local culture, a tendency to leg pull with a wry smile, part banter and part a sense of pointing to the ridiculous.

Cochrane points to the Toyota Hilux campaign Saatchi did late last year, one of the most awarded pieces of work at Axis, the creative awards.

“It dramatised that bond between Hilux and Hilux drivers,” he says. “What I love about it, personally, is that it culturally reminds us of who we are as New Zealanders right now, as people, as a community, and the unique bond we have with each other.

“I say this as our culture is evolving incredibly fast right now. We’re a socially progressive country, but mostly full of mutual respect and unity. It fills my cup every day.”

He says the showcasing of the NZ production industry is important right now.

“The world-class level of creativity, directing, locations, crew, film production and post-production is something we must accelerate, especially now the world is used to, and OK with, remote ideation and productions,” he says.

“New Zealand should continue to maximise its remote but outstanding output.

“In the past few months, we’ve had a number of opportunities and projects coming in from other global markets.”

Cochrane, who moved back to NZ from Australia, believes Australian media often portrays New Zealand as the perfect country — mostly to apply heat to its government in a classic “look how good your little brother is” strategy.

But still, COVID-19 has deeply affected Aotearoa, New Zealand, especially the tourism industry.

“This, along with global supply issues, means New Zealanders are still fearful of the next step, especially with a slower vaccine roll out and continued uncertainty as to how we will rejoin the global community,” says Cochrane.

“It means consumer behaviour has been flat. But there is a special cohort of brands emerging right now. Brands that are willing to pick up the ‘four starred flag’ and progressively push New Zealand forward through smart growth strategies and creative thinking. These … are hungry for progress.”

Tony Bradbourne, founder and CEO/CCO of Special Group: “I think the New Zealand tone, at its very world-beating best, is ambitious with a healthy slice of humour.

“If I think back on the Cannes Grand Prix winning work from New Zealand during the past decade, they all had the perfect mix of those two elements.”

Special’s Iggy Pop + Orcon, where nine Kiwis in their garages were connected to Iggy Pop in Miami to re-record Iggy’s iconic track, The Passenger, was highly ambitious but it was the humour that made it popular and successful.

Bradbourne says Colenso’s Brewtroleum was an ambitious idea to create a brand new fuel out of spent beer waste, but brilliantly wrapped in humour: “Drink beer, save the entire planet”.

Y&R’s McWhopper, challenging McDonald’s to “End the beef, with beef” used humour mixed with scale to create global headlines.

“From our perspective at Special, while COVID-19 has been uniquely difficult and unsettling, it has also allowed us to move to a new gear by connecting with more and more global clients,” says Bradbourne.

“During lockdowns and with long periods of working from home,
I think a lot of smart marketers, globally, realised, ‘It’s not where our agencies are based, it’s actually about how good their thinking is.’

“As a result, we are working with a lot more global clients and across a much wider global footprint.”

Fleur Head, managing director, VMLY&R NZ: “One positive aspect that came out of 2020 was more kindness, understanding and appreciation for each other in the industry.

“Agencies stopped being so competitive and replaced this competitiveness with a genuine desire to help and support each other.

“Clients spent a lot more time showing their appreciation for agency partners and the teams working on their projects. Even though we weren’t spending time together face to face, agencies and clients became closer than ever.”

More a sense of partnership with clients and the genuine willingness by both agency and clients to co-create and work collaboratively, says Fleur. Less of an “us and them” or “client and supplier” dynamic.

“I believe this is really positive for the industry as a whole,” she says.

“As a nation, NZ has come through this time more united than ever. There is a strong appetite for being truly inclusive and achieving equitable outcomes for all.

“New Zealanders seem to be more focused on the collective good instead of the individual gain. I think this will translate to some world-leading process changes, including approaches to communications and the way agencies operate.”

Nick Vile, general manager, oOh!media New Zealand: “We are a small nation with big dreams and love to get recognition on the global stage. As cheesy as that sounds, it really is true.

“Whether we’re talking about the media industry, or our Olympians, we seem to bat beyond our average. This is possibly due to being so remote — we seek guidance from other markets, innovate and adapt, and always look to continually improve. We’re also very focused on
a team culture, a family focus and ‘mucking in together’.

“This stems from our early settler days where everyone had to pitch in to build communities, and as a result we have an egalitarian view of the world. It is this sense of a group mentality, collaborating for the greater good rather than being individually focused, that could also be the secret sauce?”

A Kantar study in 2017 found that Kiwis are more likely to see themselves as hard-working with a can-do attitude. Australians rate themselves more highly when it comes to standing up for themselves.

Vile: “We pride ourselves on Kiwi ingenuity and tend to get stuck in, find solutions and do something ourselves.”

He refers to this as “the number 8 wire mentality” a term used to describe Kiwi ingenuity and resourcefulness. This goes back to the 1860s when every farm had rolls of this type of wire and it was used inventively to remedy all types of mechanical and building issues.

Jodi O’Donnell, commercial director at TVNZ and chair at ThinkTV NZ: “The Kiwi tone is one that is pretty relaxed (not too casual) and just friendly. I think we like to have fun and take the mickey out of ourselves, but get the point across, too.”

Angela Watson, managing director at Colenso BBDO: “I actually think it’s our remoteness that has always been the secret to our success.

“There’s a long history of talk about Kiwi ingenuity. That was born out of being so far from anywhere else, you had to be ingenious about how you did things. And that spirit still exists to this day. 

“From a historical perspective in advertising, we’ve had the sense that we can do anything. There’s something also about being so far away, that you want to be recognised in the world. We love to feel our presence on the world stage. And I think that’s something that drives us.”

Ben Hart, who runs the Australasian health agency, Essence, out of Auckland: “NZ has a strong reputation for innovative thinking and creativity plus a servicing approach that is refreshing and high touch.

“Our client partners would define our ways of working as intuitive, inclusive and cost effective versus offshore agencies.

“Having a smaller pool of clients domestically, NZ agencies have always looked to Australia to grow and extend their offer, and with borderless working via virtual channels now widely accepted there really is no limit to reach. The industry here is buoyant and flourishing with strong bounce-back despite the pandemic, especially within specialist agencies such as ours that are in high demand due to our healthcare focus.”

NZ is the place to be at the moment. Qassem Naim, head of data and tech, FCB NZ: “It’s definitely exciting. I’ve only been in New Zealand for five years. Before then I was in Seattle and I’ve previously bounced around a few other markets, and I appreciate the ability to get shit done in New Zealand.

“With a smaller market, the downside is the lack of scale and smaller budgets, but the upside is the lack of red tape and bureaucracy.

“The model we’ve been able to establish here is actually one that is getting more attention and is being looked at to see how that can be replicated across other markets.

“New Zealand has a unique ability to test, see how it works, and lead the globe in terms of some of those ways of making use of the new landscape.”

Like everywhere else in the world, as COVID-19 started to break out, there was a rush of ads being pulled. 

But by the end of the year it was back to full noise. Ad space was selling early as the summer retail season approached.

“And we’re seeing that trend this year,” Naim says. “There’s a lot of disposable income flowing around the market that everyone’s after, trying to suck up, as we head into Q4.

“We’re getting sold out of inventory far earlier than we’ve seen. TV and people are exploring digital audio and podcasting in particular as an up-and-coming channel, exacerbated by COVID-19. That one is becoming more and more common to hear, coming both from agencies and clients in terms of their consideration sets.

“Working with a lot of the digital platforms and technologies, and helping clients through digital transformation, we did definitely see a bit of a digital acceleration.

“We ended up being quite busy, whereas some of the other agencies were taking the government stimulus and making redundancies in some cases.

“Plus, after the initial scare of the lockdown, we were able to get back out and continue that work, and build on the momentum that had kind of started without the same restrictions.”

The Monkeys, part of Accenture Interactive ANZ, recently opened an office in New Zealand.

“We have always admired the creative talent and work that comes out of New Zealand,” says Mark Green, co-founder and group CEO. “It has consistently been world class across many fronts, be that music, art, advertising, technology or driving a social agenda.

“At many times it has felt like they have embraced creativity more wholeheartedly than Australia and for that reason we have always been attracted to the idea of opening up in Auckland. Throw Damon [Stapelton] and Justin [Mowday] into the mix and it was a no-brainer.”

The Market

MBM, one of New Zealand’s largest media agencies, ending up having a record year in 2020.

“The growth has continued through 2021, says Matt Bale, co-founder and managing partner at MBM.

“We are relatively back to normal as a society — touch wood — and we are experiencing a buoyant consumer economy which gives clients opportunities for growth beyond pre-COVID-19 levels.

“The industry is pretty much at full employment so there’s great potential for people to develop their learning and careers.

“Clients are investing in data and marketing technology resources, which gives us opportunities to increase sophistication of targeting and campaign delivery.”

As in the rest of the world, clients rapidly pulled activity when the pandemic hit. But after NZ’s national lockdown, which was relatively brief in a global context, there was a period of recalibration and planning for recovery.

This led to a strong fourth quarter in 2020, and that has continued in 2021.

“The forward planning horizons remain shortish, however, and agility remains a tension point still today,” says Bale. “But the health of the brand and its role in future demand creation is evident in conversations, over a singular focus on short-term activations, which was the order of the day in 2020.”

The SMI (Standard Media Index) shows New Zealand moving back to pre-COVID-19 levels of ad spend faster than the Australian market.

Jane Ractliffe, SMI’s managing director, AUNZ, says the NZ ad market has delivered strong growth for most of 2021.

In June, SMI NZ reported year-on-year market growth of 67% with the total ad spend 13% above the pre-COVID-19 level of June 2019.

“The June numbers we saw for TV in NZ were the highest we’ve seen in that market since June 2017, while each of the radio, outdoor and digital media also reported levels of June ad spend well beyond that of the
pre-COVID-19 June 2019 period,” she says.

“And that continues the trend we’ve seen in NZ for most of this year, leading to a 30.6% increase in the value of first half ad spend buoyed by an especially strong 64.3% second quarter increase.’’

“All major media are benefitting from the deluge of advertising returning to the market with every major media reporting growth in June, and SMI’s Forward Pacings data shows these positive trends look set to continue.’’

Zac Stephenson, managing director, MediaCom New Zealand: “Coming out of 2020 and into a relatively liberated NZ marketplace — notwithstanding our predominantly closed borders — there has been renewed optimism in the market, with several sectors showing significant YoY media investment.”

GroupM forecasts a 23% rise in 2021 media investment compared to last year. That would mean a net 9% increase on 2019’s figures.

“This is definitely shown in market demand forecasts, with media such as TV and OOH experiencing extremely heavy — and arguably unprecedented, although I now hate that word — demand this year, with the all-important, and always heavily demanded Q4 to come,” says Stephenson.

“This demand is seen across most sectors as they invest to recapture growth lost in 2020, barring those whose businesses are still unfortunately heavily impacted by the closed borders and associated knock-on effects.

“Within this demand-driven environment, things still feel a little volatile, and definitely short; meaning as a business, and industry, we need to lean on all those things we learned in 2020: agility, resourcefulness and resilience. 

“The hard work we put into protecting our clients in the short-term, while setting things up best for the long-term, allow us to better navigate this current landscape and look forward to demanding the attention of an increasingly confident marketplace in 2022.”

Green describes the NZ market as competitive and at the pointy end world class.

“The top agencies have been consistently the same for many decades and, like anything, while that might seem challenging, it also presents an opportunity,” he says.

“We have found clients are also looking for something different. The Monkeys, along with the rest of Accenture Interactive, can be that. I see a great opportunity and am loving the challenge of being in a new country.”

Nigel Douglas, CEO OMD NZ: “We experienced significant organic momentum and participated in a year’s worth of pitches in six months, winning 80%, resulting in unexpected double-digit growth off a very large base.

“Many businesses used COVID-19 capacity to address internal structure. At OMD, it’s provided the opportunity to develop new structures, new ways of working and, in our case, add even more high performance resources.

Scott Keddie, chief investment officer, OMG NZ, says the market exploded out of COVID-19 limbo in the first quarter of 2021 and so did OMD’s business.

“Across OMG, we have the privilege of partnering with clients across a diverse group of categories and it has been heartening to see business confidence return and clients making long-term plans and commitments. 

“More and more, the conversations we are having with clients sees us talking beyond media planning and buying and increasingly we are supporting them in the areas such as ecommerce, mar-tech and analytics. The opportunity to support our clients in this way is exciting and a big part of the future of our 3x agency brands within OMG NZ.”

Jodi O’Donnell at TVNZ says demand has been strong in the television market since July last year.

NZ came out of lockdown in late May, and by August the TV market had rebounded and it’s still continuing.

“People in NZ and globally are watching more content and TV shows than ever before, but how they’re watching is evolving,” she says.

“Connected TVs are now the norm — at TVNZ approximately 15%-20% of our TVNZ on-demand streams are from viewers watching via live streaming; this was 0% 12 months ago. We’re seeing massive growth in video on-demand viewership, but also livestreaming of traditional TV channels.”

She says marketers and media planners will need to have a good understanding of different platforms and how content is viewed on each and every one of them.

“The 30-second creative will always have its place, but marketers and media planners are now considering a mix of formats and executions to generate cut-through and connection with audiences within platforms.

“When it comes to streaming there are new products that can add value for brands, too — from ‘ad on pause’ to ‘digital ad insertion (DAI)’, there are so many new ways to reach captivated viewers.”

New Zealand has a scale challenge.

“When I talk to marketers who want personalisation and targeting, I remind them that NZ is the same size as Sydney,” says O’Donnell. “If you get too targeted you might be talking to 12 people, so use ad products such as ‘ad on pause’ or data matches for DAI to do this at scale.”

Chris Riley, CEO, GroupM NZ: “At the moment, between agencies and publishers, everyone seems to be reasonably optimistic. Consumer confidence is pretty good.”

Ad spend is up and local news publishers are benefitting.

“We’re massive advocates of the work they do, the quality of their journalism, and the content they create is world-class,” says Riley.

“It was incredibly sad to see what happened to local publishers last year, but I’m delighted to say it bounced back with real vengeance. 2021 is forecast to be up, in the region of 6.5% to 7% on 2019 numbers.  

“Digital’s certainly been the recipient of the greatest amount of growth, but TV’s having a renaissance, and it’s really good to see.

“They’ve found their mojo now. They’ve managed to look at their cost base and understand the dynamics between linear and instantly connected TV.

“We’ve got a compelling part of our business called Finecast, which enables us to look at addressable TV and capitalise on inventory, particularly through the connected TV platform.

“Television in New Zealand is actually very, very good value, probably the best in the developed world. When I look at the comparison of cost-per-thousand across the different publishers, TV is brilliant value. And
I think clients really recognise that.

“It probably shifted a bit of money back into TV from other channels as they’ve started to come back post-COVID-19 and really start to sort of focus on their communications plans for this year and into next.”

Jonathan Waecker, chief customer officer at The Warehouse Group, New Zealand’s largest general merchandise retail group and a big advertiser, says the NZ market has an interesting combination of headwinds and tailwinds at the moment.

“Similar to other markets, we’re experiencing supply chain disruptions, housing inflation, rising consumer prices, and talent shortages as our economy continues to move forward on the back of relatively strong consumer and business confidence, with notably strong consumer demand across categories connected to living and being comfortable at home and outdoors, in the broadest sense,” he says.

“I think NZ breaks away from the pack when you begin to look at how much of a headstart the NZ economy has had on the rest of the world by being relatively open with very few lockdowns — touch wood — and a clear, well-understood plan to deal with lockdowns should they happen.

“It helped that NZ went hard and fast with an aggressive stimulus program. And although not all sectors have been able to fully benefit, with our international tourism sectors in dire need of international travel to fully return to normal levels, on balance the economy is showing much more resilience than we all expected one year ago.

“It’s also true that brand NZ has never been stronger. Most Kiwi brands and primary industries that are able to benefit from that halo are seeing immediate benefit, while one would have to believe that NZ’s place on the map of ‘must visit’ locations has to have moved up the list for many.”

When the pandemic hit, there was a clear shift away from sales and demand activation into either brand building or simply banking the marketing investments as savings for later.

“The Warehouse Group was in the first camp, with a clear desire to continue the work of positioning our brands and services for customers, but without over-stimulating consumer demand because the demand for certain categories was already heightened, and the extent of potential availability and fulfilment challenges was unknown at the time,” says Waecker.

“With a much better understanding now of our availability and fulfilment capacities, we’ve since returned to building brand and demand generation activities.”

Waecker has observed marketers becoming much more agile in their thinking and ways of working.

Last year demanded agility from everyone, he says.

During the depths of the pandemic, The Warehouse Group flipped its entire business into an agile way of working.

“It was the first time a multi-brand retail group had taken the entire organisation into this new model, and it’s one of the best things we’ve ever done,” he says.

“In particular, this new operating model has set up our team members to be the real heroes in all of this, and their ability to quickly build their resilience and learning during 2020 has really paid off for them in 2021.

“Their collective ability now to work better as cross-functional teams with conversations rooted in the commercials of the business is just fantastic.

“They’ve taken empowerment into their own hands and are now able to drive the business within the end-to-end resources and choices they have available to them.”

Creativity

New Zealand is known for its creative streak, seemingly doing more with less but often simplicity in front of complex execution. The famous Air NZ safety videos have that handmade feel.

Jonathan Waecker: “For me, it goes without saying that the ‘Unite Against COVID-19’ campaign from the NZ Government and the teams at Clemenger BBDO Wellington and OMD New Zealand is truly great work. The effectiveness is off the charts, and the restraint exercised to maintain simplicity of message, clarity of thought, and appropriateness of each element’s context was so well done.

“For The Warehouse Group, I am most proud of the effectiveness behind The Warehouse’s ‘Sustainable & Affordable’ platform, which saw its first asset launch in October 2020.

“In our category, it’s pretty unbelievable for a discount, mass-market retailer to say that they want to be New Zealand’s most sustainable company one day. But behind the scenes that’s exactly what we’ve been working towards for the past 15 or so years. So to be able to create a platform that showed both our progress and our destination, all without moving beyond facts or reality, was a real opportunity that the team delivered on beautifully.

“It’s our most effective piece of work since I’ve been with the company, moving key metrics such as quality perception +40%, and getting 26% of New Zealanders to associate The Warehouse as a retail sustainability leader, achieving a clear number-one in the category in a matter of months, not years.

“It’s a huge testament to our marketing teams and our partners at Omnicom Media Group and DDB Group Aotearoa.

Talent Squeeze

Cochrane at Saatchi: “We’ve certainly had a lot of recent calls from those wanting a place in the creative department, a real quest to get in and come home.

“That said, New Zealand is certainly dealing with a tough talent problem in our technology roles. As digital acceleration continues, and technical roles are in demand, there is a global shortage.

“Being part of the Publicis Groupe Connected Platform, and our global talent sharing model — especially through Marcel — has certainly helped us overcome those challenges. I don’t know what other organisations do without it.”

Riley at GroupM NZ: “I think from a talent perspective, I’d definitely be speaking on behalf of the whole industry when I say we’re keen on seeing those borders reopen because so much of our focus is on a diverse and wide ranging talent pool.

“We’ve probably got anything upwards of probably 20-odd ethnicities in the business so we’ve really missed the ability to be able to hire internationally.

“GroupM really prides itself in being able to move people around our network. We’ve done it successfully for many years, but that’s something we’re missing and I’m sure when those borders open there’s going to be a flurry of movement again, which will be terrific for everybody.

“We’ve got great talent as well that we want to put into some of our offshore markets. Some people have been raising their hand to take bigger roles in London and New York and other markets, where we’ve had a bit of a history of that.”

Riley says there was an early rush by expatriates who may have lost jobs or feared what was happening around them.

“But now I think people have had an opportunity to stand back and look at the environment they’re working in,” he says.

“People are wanting to come home but now they see a buoyant economy down here, an opportunity to continue to drive their career forward and do it in a market that’s not as constrained as what they’re currently working in.

“I think that’s what’s attracting a number of people back home. But our international compatriots still have a lot of things going for them. And as every month passes, we’re starting to see other markets become a lot more stable with how they’re approaching life with COVID-19. So I don’t think our shining light is going to continue forever, but it’s certainly a great place to be at this point.”

Qassem Naim at FCB: “You also had a wave of returning talent from abroad, and that still seems to trickle in now and again. That brought back some pretty senior talent from larger markets who were looking to come home off the back of COVID-19.

“In the high-speed data and technology market, martech and adtech talent is always a challenge and you have to grow that here in most cases.

“If you’re really looking to build a scalable, stable offering, you’re recruiting a lot of capable people and they’re either well embedded somewhere else or well aware of their value and quite promiscuous.”

Many now feel more comfortable to make a job shift, while most were holding on to their chairs tightly during the depths of the pandemic in 2020.

“And that was true across APAC,” says Naim. “I talked to my counterparts in Singapore and other places and they saw a similar trend as well.”

Mark Green at the Monkeys: “The Accenture Interactive business is growing strongly across Australia and New Zealand, and in particular, is showing a really positive response to the current climate.

“As clients see the need for new thinking and, crucially, new customer experiences, our combined creative, consulting and technology business is right in the sweet spot.

“Our biggest challenge isn’t finding opportunity, it is finding the best people to deliver the increasing demand for our services.”

Waecker at The Warehouse Group: “I’m also seeing the talent shortage really putting the future of work front and centre for business, as everyone is trying to figure out how to reskill and retrain the talent we have today in preparation for the future.” 

Fleur Head at VMLY&R NZ: “The NZ industry has benefitted from an influx of great expat talent returning to NZ. Although everyone is enjoying being back in the office together, there’s also a lot more accommodation for working from home, both among clients and agency staff.”

Nick Vile at oOh!media: “Late last year and early this year when we were recruiting for marketing and research roles, there was a notable influx of NZ expats applying, having either just come home or looking for roles to come back to.

“One role we had a significant number of applicants for, and most of them were in that expat boat. Ironically, in that instance we went with a local candidate as they were most fit for purpose for that role at the time. It does feel now like that initial burst of returnees has plateaued.”

The economic ups and downs of 2020 had a long lasting effect.  Riley at GroupM NZ: “It’s almost like a badge of honour, if you managed to come through unscathed, able to keep your people and grow your business in a tough time.

“I’ve not met anyone at my level who hasn’t learned a thing or two during the past 18 months. We’ve all had our steep learning curve around how to connect better with people, how to spot people in need of a bit of extra attention, and how to lean in and give them that support they need, and how to serve clients in a stronger, more agile way.”