New Zealand has marketed itself to tourists as '100% Pure New Zealand' for more than a decade. Over the course of the slogan's 13 years it has taken on numerous different endings - such as '100% Pure You', '100% Adrenalin' and '100% Pure Wonder'. But apply the motto to the previous 12 months in NZ and it would more likely read 100% turmoil or 100% uncertainty.
"We had a very unusual year last year," Laura Maxwell-Hansen, Yahoo! New Zealand's general manager, said.
"It was a really unusual 12 months with a natural disaster, the Rugby World Cup and a general election."
While the previous year was strange the media market also expected it to be a tough one with industry insiders describing the media landscape as fraught with uncertainty at the start of the year.
In comparison, despite it still being early in the game, the next 12 months should shine brighter according to Maxwell-Hansen.
"Across all media it is tentative but positive. It hasn't hit the ground running in 2012 but we are definitely seeing some positive signs and some people with some confidence," Maxwell-Hansen said.
Bolstering this confidence are the latest Advertising Standards Authority (ASA) figures which reveal advertising revenue across all main media increased slightly to reach $NZ2.18bn in 2011, up from the $NZ2.13bn a year earlier.
While the overall feeling is hopeful, Jim Moser, chief executive officer of the Clemenger Group New Zealand, says NZ is still on a long tedious road to recovery after being knocked by the 2008 GFC. "We are out of recession but I don't think anyone is forecasting any significant growth for the next several years."
Jon Ostler, CEO of digital marketing group Q Ltd, concurs and says that while NZ never really booms he is expecting moderate growth which will in turn sustain growth in advertising.
However, the European debt crisis has threatened to throw a shadow over the year according to Wayne Chapman, chief executive iSite Media.
"If the issue is contained to Greece and doesn't really pollute a great deal of confidence in Europe then the effects could be fairly minimal," Chapman explains.
Hosting the Rugby World Cup last year caused the Kiwi market to bubble with excitement. Research by the tournament's main sponsor, Mastercard, forecast that the rugby-related spending from overseas visitors could reach $782m with a direct economic benefit of $411m. But in February the New Zealand Institute of Economic Research said it thought visitors spent $242m less than Mastercard forecast. Moser does not believe the RWC was a big winner for the media markets but what the cup didn't deliver to the media it made up for with feel-good factor.
"I think the RWC has given Kiwis a new found confidence and pride in their place in the world," Moser says.
A year on from the February 22nd Christchurch earthquake Ostler can see a silver lining amongst the devastation of the 6.3 magnitude quake with the insurance pay outs set to act as a "little stimulus package".
"There will be billions and billions of dollars injected into a very small economy so it's actually quite an interesting dynamic."
The NZ economy grew a weaker than expected 0.3% in the December quarter compared to economists' forecasts 0.6% growth.
For agencies, Maxwell-Hansen explains, the economic conditions mean marketers will continue to be cautious, only investing where there is a strong assurance of return and demanding more results for the same spend.
"The market definitely has a shorter focus. Decisions are taking longer to be made by clients and there are rushed planning requirements for agencies which means we will see more tactical campaigns as opposed to large rebrands."
Tony Bradbourne, creative director the Special Group, says that while clients are not splashing more cash they are no longer cost-cutting and are seeking more innovation.
Wellington based STW-owed agency Designworks head of strategy, Chris Meade, agrees: "This is where true creative thinking comes into play. When you can create greater value to both you and your customers, whilst simultaneously reducing cost to your business - that's true innovation."
While agencies may be excited by the coming 12 months are the media industries as energized?
Newspapers took a hit last year with the medium no longer dominating NZ's total ad spend. For the first time the steadily declining market was relegated to second place behind television with a 26.7% ($582m) share of share ad spend in 2011.
Fairfax Media's group sales and marketing manager, Sandra King, said the medium's reduced share was due to a declining trend from classifieds.
"However display advertising is not being affected to the same extent, although it remains a difficult trading time," King adds.
Newspaper's 2011 share represents a $45m drop from 2010's $627m (29.3%) with newspapers share steadily dropping since it dominated the market with 38.1% in 2004. However the ASA notes: "newspapers advise the 2011 figure reported is not a comparative measure with other main media which derive the majority of their revenue from national and retail advertising sources."
In the aftermath of the earthquake King says Fairfax's Christchurch publication, The Press, never missed a day of publication and became the communities voice.
"The Press has been a real bastion in the Christchurch community [it] has provided people relevant, useful information and helped them navigate the new Christchurch."
The strength of newspaper's multi-platform solutions will ensure the medium remains attractive to marketers in 2012 says King.
In addition, print has the London Olympics to look forward, with the games a focus for Fairfax's editorial and commercial units according to King.
Newspaper's glossy counterpart, magazines, also recorded a drop in its share of ad spend sliding from 10.2% in 2010 ($219m) to 9.6% ($209m) in 2011.
John McClintock, executive director Magazine Publishers Association, says the NZ magazine market is extremely competitive with a large number of titles, approximately 3,500, for a population of 4.43 million.
The RWC had mixed results for the magazine industry, according to McClintock, with only a few enjoying the benefits.
"It is to be noted some publishers did extremely well at RWC with targeted titles and specific projects - requiring re-prints in some instances to supply demand," McClintock explains.
While McClintock says the difficult retail marketplace is affecting magazine sales, publishers can counteract those with subscription programmes. "Innovative marketing strategies around subscriptions will continue to provide publishers with gains."
King believes consumers' love of their favourite magazines will see the industry's revenue remain steady. "Readers are strongly connected to the magazines they read and therefore magazines are very powerful in the consideration phase of the consumer path to purchase. This ensures that brand advertisers find magazines essential."
While newspapers have been knocked of its perch, television has secured the plum spot as the ad spend leader in NZ. In 2011 TV's slice of the market remained the same as its 2010 share of 28.4% but TV was able to grab its market leading position of $618m following newspapers decline.
Director of sales TV3 and Four at MediaWorks TV, Linda Farrelly, believes television is "conservatively optimistic" in 2012.
"Our clients are approaching 2012 conservatively but in general there is much more confidence to commit in the medium term and make plans," Farrelly says.
The quakes shook television and the medium is still recovering. TVNZ's head of sales and marketing, Paul Maher, says TVNZ's Christchurch operations took a hit.
"It is more buoyant then expected - albeit it has been through a tough time but my sense is that it will recover," Maher adds.
Amidst the struggles of 2011 Farrelly describes the RWC as a "golden moment".
"Many clients saw it as an opportunity to invest, albeit conservatively, and MediaWorks saw significant upside with revenue throughout the tournament."
Rick Friesen, chief executive of ThinkTV, says clients and agencies are re-awakening to the benefits of TV.
"The excitement with new media is gone," Friesen states.
"There is no reason why people shouldn't use new media but I think they have returned to understanding the value of TV in reaching people quickly and cost effectively."
Friesen says a new television platform, offering a mix of pay and free-to-air channels, will keep ad-land's eye on TV. The Igloo service, a joint venture between TVNZ and Sky TV, is set to launch later this year.
Turning to radio, the medium's share of total ad spend also remained steady in 2011 at its 2010 share of 11.3% but increased its dollar value from $241m to $247m.
Gill Stewart, general manager of The Radio Bureau - a joint venture between MediaWorks Radio and The Radio Network - says advertisers see radio as a vital part of the marketing mix.
NZ's 28 networked brands have aggressively moved into online and mobile and Stewart says radio is experiencing considerable growth in online advertisers with 48 new clients advertising on the Bureau's websites in 2011. "The migration online has been seamless with strong growth being driven by great, sticky content and widespread listen-live functionality. On-air audience numbers have not been affected by radio's migration online and steady cume figures over the last five years bear this out."
The NZ radio industry is monitoring the growth of digital radio in Australia and UK but Andrew Szusterman, group programme director MediaWorks Radio, is sceptical. "I feel NZ has dodged that bullet to be frank," Szuzterman exclaims.
"It really seems like an intermediary digital step and online will continue to play a larger role in the delivery of traditional and non-traditional radio content."
Stewart says radio's focus in 2011 is on growing its share of advertising and further harnessing and monetising the medium's multi-platform activities and engagement opportunities.
Out of home
The outdoor industry has reason to smile; it commandeered a 3.8% share of the NZ ad market in 2011 - the industries first significant increase since 2005 - and added $13m to its 2010 figure to reach $83m last year.
Outdoor benefited from the RWC and the extra foot-traffic it generated more than most media.
Jo Davenport, marketing and communications manager Outdoor Media Association of New Zealand (OMANZ), says: "OMANZ reported an impressive gross media revenue result in Q3 2011, with an increase of 35.5% over the same period in 2010. This was due in part to the spend allocated to OOH media over the duration of the RWC."
OMANZ' objective is for the NZ OOH market to claim 5% of NZ's total advertising revenue and iSite Media's Chapman, is confident OOH will advance towards its goal as audience fragmentation continues and traditional media is put under more pressure.
"OOH can create talk-ability and make a brand look famous which works very well for new brands and launches," Chapman adds.
The challenge for OOH this year is to crack the large external-digital billboard format, according to Chapman.
"Because it has clearly been a trend internationally and has also been a major driver of growth," Chapman explains.
Challenges aside, Davenport says OMANZ plans to solidify the strength of OOH in the minds of clients with an education campaign.
"OOH media is definitely being taken seriously by both agencies and advertisers as they become more aware of how effective OOH can be," Davenport says.
"As a result a buoyant year is expected for the OOH sector during 2012."
Despite 2011's tumultuous beginning on a whole NZ's media market fared well. Of the major media markets only newspapers and magazines share of ad spend dropped while outdoor grew and television and radio remained static.
Across the board, all the various forms of media and agencies agree that marketers -while they are no longer cost-cutting - want their dollars to work harder and smarter. This is leading to an increased focus on multi-platform solutions, the need for greater creative solutions and pushing marketers to think outside the box.
Asked if the climate is right for brave marketing the Special Group's Bradbourne says it depends on how you term 'brave'. "Is the climate right for doing things better than you have before? Yes. Doing things different to get better results? Yes."
The Clemenger Group's Moser agrees: "The really clever marketers are the ones who are taking risks, trying new things and experimenting to see what kind of reaction they can get."
While NZ's GDP may be lacklustre Moser says the country is in a good space.
"The political leadership is very strong and the sense I get walking around is one of positivity."
With the various media insiders describing the market as "conservatively optimistic", "subdued" or "tentatively optimistic" it seems the market's attitude to 2012 is '100% hopeful'.
THE NZ DIGITAL SCENE
Online in New Zealand is ensnaring more of the ad dollars and following in the footsteps of Australia with mobile and video identified as key trends for 2012. But how will these movements play out in a smaller market place?
New Zealand is next in line to join the push online with digital demanding a fatter slice of the country's ad spend every year. Total online ad spend in NZ hit $328.11m last year, up more than 24% on the previous year's $257.46m, according to IAB NZ and PricewaterhouseCoopers. Online currently accounts for 15.1% of NZ's total ad spend and is third only behind television and newspapers.
"The entire market for online grew over 24%, display as a percentage grew 11.18% year-on-year and search grew over 45% ," says Laura Maxwell-Hansen, vice chair IAB NZ and Yahoo! NZ's general manager.
"That is a phenomenal growth rate in the current climate for any media."
The largest shift in online ad spend last year saw display advertising overtake classifieds for the first time.
In the IAB/PwC report Sandra King, Fairfax Media's group sales and marketing manager, said: "This highlights online display advertising becoming a destination for brand, driven by the new innovative advertising opportunities on offer by publishers."
While the growth in online may be monumental it is not set to slow any time soon according to Alisa Higgins, general manager IAB.
"IAB NZ is estimating 22% overall growth for 2012 - we are hoping to reach the $400m mark," Higgins says.
"Drivers of online advertising in 2012 include cross media efficiencies, for example, research shows that the use of TV and online together can lift brand awareness increasing purchase intent on and offline.
"And of course consumers are pushing the growth. Time spent online in NZ has increased the fastest compared to all other mediums and with the ability to access the net almost anywhere we can expect to see this figure continue to rise."
While consumers may be spending more and more time online NZ's bricks and mortar retailers haven't embraced digital as readily. Tony Bradbourne, creative director the Special Group, says some retailers are doing well and others less so.
"I think there is huge potential for New Zealand retail clients to be a lot smarter with how they use digital and ecommerce," Bradbourne says.
"I think there is a lot of traditional retail thinking that has just jumped from print to digital without the extra step in thinking. So the potential to be much more effective, and generate a lot more sales, is huge."
Search along with display are set to steer online's share of NZ's ad spend skywards in 2012 with online video, social media and mobile identified as three growing trends.
Advertising spend on social media may be on the rise but Higgins encourages marketers to branch out from Facebook.
"Advertisers need to remember social media is not just Facebook," Higgins says.
"Kids don't want to be seen hanging out at the same place their parents do and are starting to look for other 'cool' venues to disappear to."
The trends set to drive online in NZ are easy to identify, says digital marketing group Q Ltd's CEO Jon Ostler, the challenge is predicting how they will play out.
"We are generally seeing the same international trends with NZ maybe lagging a little bit behind," Ostler explains.
"So the trends are easy to pick, the interesting thing is how they play out in a marketplace of four million people with less money sloshing around."
For instance mobile marketing has been gaining traction worldwide but NZ advertisers spend on the medium has been decidedly conservative. Maxwell-Hansen believes this is set to change in 2012.
"I really think mobile is starting to take off," Maxwell-Hansen says. "At Yahoo! our revenue increased over 100% year-on-year for mobile investment. "You have to remember that is off a very small base but...I think we will see more than 100% increase again in mobile spend this year."
For the first time IAB NZ included mobile spend (not including Google Mobile ad spend) in its PwC report and found it reached a measly $632,092 last year. But Higgins feels the sum is set grow.
"In Australia, PwC are predicting that spend on mobile display advertising alone will hit $37m for 2011 and as NZ often uses Australia to trend against there is no reason the market won't start growing just as fast over here albeit on a smaller scale."
Ostler says NZ's investment in mobile is conservative only because of constrained marketing budgets. "Other markets like Australia are more aggressive, NZ has the appetite to get stuck in but lacks the budget to try new things and therefore plays things a little bit safer in the use of mobile," Ostler explains.
Apart from financial limitations Ostler identifies smartphone penetration as another factor slowing the investment in mobile. "I imagine Australian smartphone penetration is going mental but I'm not sure NZ's consumers are as flash with their cash in terms of upgrading their technology."
But Maxwell-Hansen says smartphone uptake is set to increase with handset prices due to drop as new telecos and handset providers enter the market. "Smartphones account for around 30% of all handsets so that is a big leap - 12 months ago we were talking 20%."
Mobile advertising may be in its infancy in NZ with spend still sitting under $100,000 but the market isn't resting on its laurels when it comes to new innovations. Russell Douglas, group head of interactive Designworks, says QR codes are mainstream and clients now have their eye on Near Field Communication (NFC).
"With Bank of New Zealand and Vodafone recently completing a mobile wallet trial the potential for NFC to be used in a wider marketing context is gaining traction - especially if the banks start to push NFC updates to POS systems."
But before mobile can take off as an advertising platform the Clemenger Group NZ chief executive Jim Moser says the cost of data plans need to come down and data-caps have to increase. It's a similar story in video with the country's slow and unreliable broadband holding advertisers back.
The state of NZ's broadband was recently broadcast to the world when British comedian and actor Stephen Fry unleashed a Twitter rant labelling NZ's broadband "the worst" and "pathetic".
The outburst was prompted when Fry, who was in NZ filming the Hobbit, tried to upload a video at the private home where he was staying. But he had exceeded the broadband data limit, slowing the speed to dial-up pace.
"Come on New Zealand. You're world champions at rugby & filmmaking. Pressure the providers to stop [NZ] being a digital embarrassment," Fry tweeted. Fry was not alone in his condemnation of the internet service providers with Paul Brislen, head of the Telecommunications Users Association of NZ, reportedly calling NZ's broadband "Third World".
Ostler says poor broadband packages have stunted video consumption and therefore investment in video display ads. Moser agrees: "As data prices come down it is going to stimulate market activity for more people to be using YouTube on their mobile or sharing video virally."
As it stands ad spend on online video in NZ hit $2.64m in 2011 from $1.9m a year before. In comparison Australian ad spend on online video is set to hit $350m within three years, according to the IAB.
While the spend trails Australia's IAB NZ believes investment will pick up this year. Maxwell-Hansen agrees and says the demand is there: "Video demand is outstripping everyone's supply. I think everyone could be taking more money out of the market and it is frustrating us."
Slow internet speeds may be hampering investment in online but Maxwell-Hansen believes the failure to adopt a single measurement system is also holding the industry back.
"The plethora of audience measurement systems out there at the moment make it challenging for a marketer to correctly apportion what percentage of their budget they want to put to the online channel," Maxwell-Hansen explains.
As a result she says too much time is spent trying to get clients to understand the numbers and not enough time discussing the benefits of online. Nevertheless, Maxwell-Hansen is resigned to the fact that in such a fluid environment a standard measure may never exist.
NZ's online ad spend of $NZ328.11 may be dwarfed by Australia's $2.66bn but kiwi creatives claim their tighter budgets breed more digital creativity.
Bradbourne describes NZ's digital work as "world beating". "I actually think we are leading Australia in a lot of our thinking and executions," he says. "New Zealand may not have the media budgets that Australia has so we just need to be smarter and more innovative."
Designworks' Douglas agrees: "We're a wee country with big ideas and many of those ideas are world leading." However, Moser says there is room for improvement in display advertising. Maxwell-Hansen thinks it is improving: "There are some fantastic rich media executions that have come into the market in the last 12 months especially."
Wait and see
Online is sprinting ahead globally, gobbling ad spend at an alarming rate and it seems NZ's ad spend will step in line and follow the worldwide trends, although on a smaller scale. Display and search are set to drive growth with mobile advertising, social media and online video growing trends in 2012.
While Ostler claims NZ tends to trend against Australia, the rugby-loving nation is hardly a digital backwater. Smaller budgets may instil more caution in marketers but, as Moser explains, there are benefits to waiting and watching how things play out offshore: "Locally, opportunities exist for advertisers to look at overseas benchmarks and get stuck in here first. Advertisers' who do well online in NZ will be the ones who look at overseas benchmarks, follow the lead and avoid their mistakes."
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