Where's Welly? A report on the state of Wellington's marcomms and tech industries
Not too long ago, when Saatchi & Saatchi was at the height of its powers, Wellington was renowned as a global hotbed of creative talent. Now staff at the big multinational agency offices are fairly thin on the ground and our own prime minister has called it a ‘dying city.’
But, as Jacqui Gibson discovers, those working in the capital’s marcomms and tech industries believe reports of its death have been greatly exaggerated
The Hangar, Wellington (image care of WellingtonNZ.com).
It’s mid afternoon in the capital and Tom Reidy is all smiles. Reidy is founding head of Catalyst90, a 10-person business that develops applications for social media and manages social media advertising and content.
The 35-year-old has every reason to feel upbeat. His start-up grew by an average of 120 percent each year between 2008 and 2011. He expects further growth of 200 percent this year. Turnover is set to double that of last year’s.
Since opening its doors five years ago, Catalyst90 has seen a 10-fold increase in its client base. Company clients include big name brands such as Colgate in New Zealand and Palmolive in Australia, as well as some of Wellington’s most respected creative agencies, including Acumen Republic, Y&R and the newly-merged GSLPromotus.
In July, Catalyst90 shut up shop on Cuba Street for an office twice the size on Courtenay Place. Plans are afoot to open an office in Sydney. Europe and the US are next on the list.
So, does Reidy feel like he’s doing business in a so-called “dying city” – as prime minister John Key described Wellington earlier this year?
“God, no. If anything, I’d say things are really buzzing at the moment – particularly in the fast-changing social space we work in. It’s getting super competitive out there. There’s a land grab going on in social, for sure. It just so happens we’re cleaning up because we are the best at what we do.”
Optimism ahoy
Reidy may sound like he’s over-egging the pudding. But he’s not the only one feeling bullish about the city’s prospects.
Helen Baxter, director of Mohawk Media, a niche firm providing animation, infographics and communications services, believes Key’s perception of the Wellington economy is all wrong.
She says you only need to look at native start-ups like Catalyst90, web software and design company SilverStripe and the business offerings in the Enspiral network for proof.
“The landscape has changed. And that’s what John Key failed to notice because a lot of this activity is happening under the radar.”
“When you look at the declining number of government jobs, for example, or the state of traditional advertising or mainstream media, you’re going to come away with a fairly bleak view of things,” she says.
“But when you look at the growth of the digital sector and the quietly flourishing ecosystem of online innovation here in Silicon Welly, you’ll see a very different story emerge.”
Baxter and partner Chelfyn moved to Wellington from Auckland in 2010 – a time Baxter describes as “the pointy end of the recession.”
She says: “A lot of the large creative agencies were moving their head offices north. There was a shift away from television advertising, social media was starting to take hold and much more interesting things were beginning to occur online.
“Essentially we were seeing the emergence of the web-friendly, tech, start-up environment you see today. It’s a much more collaborative, cost-effective scene. I believe we’ve totally nailed smart, digital thinking down here.”
Slicing the pie
To some extent, the economic data collected by regional economic development agency Grow Wellington supports Helen’s observations.
It shows the information and media sector (which includes the likes of digital start-ups and film) is now the city’s biggest earner, bumping public administration from the top spot and accounting for $1.98 billion or 9.9 percent of Wellington’s contribution to GDP.
It shows nearly half (47 percent) of Wellington’s population works in the knowledge-intensive industries, compared with roughly 30 percent nationwide. It also shows Wellington has the highest concentration of web-based and digital technology companies per capita in New Zealand.
However, the data is less effective at tracking what’s happening in Wellington’s traditional advertising market – which is where the first-hand experience of some of the city’s key players comes in.
Leigh Graham from GSLPromotus, for example, agrees the capital’s ad industry has changed markedly in recent years. But she’s a little circumspect about what this means for her industry and the city as a whole.
“I think losing those bigger, full-service agencies has been a shame for Wellington. There are only a handful of us left. Very few have full-service offices based here and, without that presence, they struggle to provide the hands-on, face-to-face service delivery that government clients, in particular, want.
“I mean it’s good for us, because we do. But this city used to be a real strong hold of creative and strategic thinking. Now, what you see are pockets of excellence, with that knowledge and skills spread across a wider range of agencies.”
Graham says GSL’s July merger with Promotus was, for the most in part, driven by a decision to become a larger entity, competing more strongly in the commercial space (they are now the city’s second largest agency catering to both government and commercial clients), as well as a desire to feed the local industry and keep it alive.
“We’ve specialised in public sector advertising for more than 14 years – probably 90 percent of our work is public sector work. But the government purse is shrinking. There’s less available to tender for. We want to keep doing government work. We’re very passionate about it. But there’s not enough out there to support the growth we’re looking for.”
Mass exodus
Clemenger BBDO’s executive creative director Philip Andrew is surprised at the number of agencies who’ve left town, believing there are still many compelling reasons to work in the capital, despite leaner times.
“We’ve got a full contingent of staff doing first-class work for a good mix of commercial and government clients in Wellington. Wellington In a Pint is one example. Our work for FlyBys, Mitsubishi, Positively Wellington Tourism, Treasury and NZTA are others. Yet, of the 10 big agencies left who claim to be here, I’d say only two or three have more than someone just manning a desk.
“Wellington’s an amazingly compact city offering plenty of opportunities. The lifestyle’s fantastic once you get your head around the weather. It’s easy to do business here. There are fewer layers, which means you get to work directly with clients and decision makers.
“And there’s still plenty of good strong agency competition – Scott Henderson’s team at Y&R, for example. The Assignment Group. There’s plenty happening in digital, too. You can’t go past Andrew Hawley at TouchCast – he’s undoubtedly the best in the business.”
Wellington city (image care of WellingtonNZ.com).
Intellectual capital
Across town on Thorndon Quay, life is flat out for Grenville Main, DNA’s creative director. And it’s about to get busier, he says, with the All of Government panels for web services and advertising in place and the panel for design not far away.
DNA sits on the web services panel alongside 41 others.
“We’re not anticipating the government spend to increase. But we’re expecting work that’s been put off to start coming on. We’re also seeing a new focus from government that goes beyond just value for money. They’re much more focused on the effect design can have on an organisation’s bottom line and design work that delivers results.
“Their briefs tell us they want solutions that simplify government processes, reduce duplication and make things easier for the public – it’s about lowering the cost of serving customers, as well as delivering a better experience to them. It’s potentially a very liberating and empowering time for the industry right now.”
Ocean Design is one of only two companies on the panels for both web services and advertising (Samdog design is the other).
Managing director Blair Mainwaring believes it’s a little too early to tell what will come from panel membership and what the real opportunities are.
And, to be frank, he’s not overly concerned. Only a third of Ocean’s clients are Wellington based, with the majority spread between Auckland, the rest of New Zealand, Australia and further afield.
“We’ve been working overseas and outside Wellington for years now. Wellington’s our base because we love living here. It’s a great little city. It has its challenges, but you can be a successful international business from here. You just have to view it the right way. Our industry isn’t the same as it was. But then the world isn’t either. You have to adapt. You have to be flexible.”
Where talent lives
SilverStripe chief executive Sam Minnée and TouchCast creative director Andrew Hawley couldn’t agree more.
Minnée set up an office (of mostly design staff) in Auckland last year to be closer to clients such as New Zealand Lotteries, Westpac and partner agency Clemenger BBDO. His company is also well established in Australia, with offices in Melbourne, Tasmania, Canberra and Brisbane.
Yet, when it comes to head office location, Minnée says Wellington is his first choice by a long shot. “There are several reasons. A big one for me is the number of highly educated people and the quality of the dialogue you can have here. It’s a place where talent lives and SilverStripe needs talented people,” he says.
For Hawley, who splits his time between offices in Auckland and Wellington, it’s the entrepreneurial nature of his home city that he rates.
“There’s a very supportive environment established in Wellington. It accepts and encourages the set up of creative, digital businesses. If you’ve got the hunger and drive to pursue an idea, then the support, mentoring and experience are here at your fingertips.”
Coopetition: buzz word or reality?
According to Positively Wellington Tourism (PWT) New Zealand marketing and communications manager Angela Moriarty coopetition is alive and well in Wellington, as creative agencies cooperate and work together to compete.
Case in point are Clemenger BBDO, OMD and TouchCast who joined together to re-win PWT’s domestic business, a television and digital campaign worth up to $3 million over three years.
“For us, they are the perfect trio. In Clemenger and OMD, we have well-established, experienced agencies. TouchCast, on the other hand, is part of the city’s new wave of digital agencies. They’re young and nimble. At the same time, they’re creatively and technologically brilliant.
“As a client, coopetition is key to keeping ideas and content fresh and the work at its most effective. I know I’d like to see much more of it. Our guys are already pulling a few Wellington artists and photographers into the mix and some day I’d love to see the city’s film industry unleashed on our brand.”
Tangerine Design account director Mark Remfrey says coopetition was central to Tangerine (a team of five) winning the Ministry of Justice constitutional review campaign over some heavy-weight players.
The campaign involved everything from brand strategy and kanohi-te-kanohi (face-to-face) consultation through to graphic design, photography, engagement and media.
Remfrey’s team partnered up with Hinerangi Barr at Te Aiorangi Communications, Nicky Birch at KaToa Consulting and Sam Robinson at Urban Jandal, calling themselves Māpura (spark).
“We thought a lot about our name, our brand. We chose it for a couple of reasons. One māpura represents a small ball of energy, but when several māpura converge they create fire. The name also refers to our agility as independent companies and our desire to make a positive difference,” he says.
This story was first published in New Zealand Marketing magazine.