The European cultural influence on Australia and New Zealand over the past two centuries is reflected in the development of each country's advertising industry. As former colonies of Great Britain, each was still considered a far-flung outpost during the first half of the 20th century.

Thanks to post-World War II European migration and the subsequent growth of Asian immigration, however, these countries today boast dynamic and diverse populations with their own identities, which are in turn reflected in sophisticated advertising industries. Existing in countries quite different in size?Australia with its 19 million citizens vs. New Zealand with its 3.8 million?the Australian and New Zealand ad industries have faced different challenges.

By the early 21st century, Australia's ad industry was enjoying buoyant growth, while the New Zealand market had been stagnant. In New Zealand, globalization resulted in an increasing number of accounts moving offshore, while the local agency scene was dominated by large multinationals working with locally owned agencies, usually one- or two-person "boutique" operations. In Australia, there remained a large number of sizable Australian-owned ad agencies competing on an equal basis with the multinationals.

Australia

Among the earliest advertisements in Australia was a playbill for a performance of "The Recruiting Officer" at the Sydney Theatre on March 8, 1800. Advertising was also carried by the first Australian newspaper, the Sydney & New South Wales Advertiser, which began publishing in March 1803.

More than a century passed, however, before the first Australian advertising agency was established with the opening of the Weston Co. in Sydney in 1906. Within a dozen years, Weston had many competitors, including Sydney ad agencies O'Brien; Willmot; Coudrey Arthur Smyth; Goldberg; and Catts-Patterson, along with Melbourne's Hugh Paton and Claude Mooney. Catts-Patterson, founded by George Patterson and Norman Catts, later grew to become the largest agency in Australia, George Patterson Bates, after Mr. Patterson bought out a depression-affected Melbourne ad agency and split from Catts in 2001. Media space brokers such as Gordon & Gotch and Besley & Pike, which dealt solely in newspaper advertising, were also operating early in the 19th century.

The advertising industry of the early 1900s reflected the rapid maturation of Australia, which was formed in 1901 by the joining of six previously separate British colonies. In the first decade of the 20th century the first foreign agencies began arriving on Australia's shores, starting with J. Walter Thompson Co. to service the Unilever and General Motors Corp. accounts. Lintas, the Unilever house agency, soon followed its client to Australia.

While the contractors charged a fee for their work, it was not until 1911 that they began to claim commissions from the media for the space they sold. The move heralded the establishment of an advertising industry in Australia. Advertising agents began to form various "Institutes of Admen" in cities around the country, starting with a group organized by the five active advertising agents in Melbourne in 1912. A national group representing advertising agents was not set up until 1946, when the Australian Association of Advertising Agencies (later renamed the Advertising Federation of Australia) was established.

The first Australian advertising convention was held in 1918 and another in 1920, which attracted representatives from five New Zealand-based advertising organizations. Participants discussed a "public declaration of the ethical character of and economic justification for advertising as a business force," reflecting issues that had been of social concern since the 1840s.

Rise of brands

The rise of the trademark in Australia was the result of the industrial revolution and the broad range of factory-produced products that were becoming available. In 1850, many Australian households made their own soap, candles, clothes, medicines, jams, bread and butter. By 1900, factories were making those goods and selling them under distinctive brands and trademarks.

Between the 1860s and the 1880s, the various Australian parliaments (pre-federation) passed the first laws to register trademarks, curbing "backyard" manufacturers that had found it profitable to copy the labels of well-known products. As late as 1874, a Melbourne maker of perfumes and soaps issued large advertisements warning the public that his labels were being copied by competitors.

Boots were another commodity that encouraged the practice of trademarking. Boots and shoes were necessary but expensive. Boot polish was vital to maintain them and gave rise to some of the best-known trademarks in Australia. The brand name Nugget became the common word for shoe polish in many parts of the country.

The advertising industry grew quickly; by the 1920s, there were many anecdotes about Australia's pioneers of advertising, such as Frank Goldbert, the Sydney adman who won the Johnnie Walker whisky account by catching the train from Sydney to Perth, a three-day trip and boarding the distillery principal's Sydney-bound ship at Perth's Freemantle Port to show how keen he was for the business.

George Patterson got the Palmolive account in 1921 by convincing the foreign sales manager of Palmolive that Australia would buy the soap when Asia would not because Australians already knew of it through American magazines. In 1925, Mr. Patterson ran the first free-sample-offer coupon ad; as a result, Palmolive became the biggest-selling toilet soap in Australia, beginning one of the longest client-agency relationships in advertising history.

The Australian advertising industry got another big boost with the introduction of commercial radio broadcasting in 1923, with two radio stations in Sydney, one in Melbourne and one in Perth. George Patterson Advertising sponsored so many radio programs in the 1940s and 1950s that the agency had a sizable department involved in the production of radio programming as well as the advertising that they carried.

Introduction of TV

In April 1955, the federal government allocated two commercial TV station licenses each to Melbourne and Sydney. The first commercial station in Australia, TCN, Channel 9, Sydney, began transmitting in July 1956 and opened with regular programming in September. Australia's first TV commercial was a 20-second spot for Rothman's cigarettes through the now-defunct Jackson Wain ad agency.

In the 1960s, advertisers faced with the high cost of producing TV spots often decided to run ads imported from their overseas affiliates. However, with pressure from domestic ad agencies, the Australian Broadcasting Control Board (later the Australian Broadcasting Authority) began banning commercials not produced at home.

In 1991, the ABA introduced new rules allowing a maximum of 20% of a TV licensee's total commercial time could be devoted to foreign commercials. The ABA's move was vigorously opposed by the TV commercial-production industry, which was concerned that foreign spots would flood Australian TV, depriving the industry of income. Ironically, owing to favorable exchange rates and a highly skilled local talent pool, in 1999 and 2000 those same companies saw an unprecedented number of foreign ad agencies come to Australia to produce commercials.

Among the country's leading ad practitioners have been Bryce Courtenay, who is celebrated for his work for the Coca-Cola Co. and Reckitt & Coleman's Mortein pest repellent; Leo Schofield, who is remembered for his Wool Board, Qantas and British Paints campaigns during the 1970s and 1980s; John Singleton, who is known for popularizing "Ockerism"?stereotypical Australian character traits?and using Ocker spokespersons in Australian advertising; and the creative team of Allan Morris and Allan Johnson, founders of the ad agency Mojo, who are remembered for their use of folksy jingles such as "You Ought to Be Congratulated" to promote Meadow Lea margarine.

At the end of the 20th century, marketers reacted to shifts in the demographic makeup of Australia and the fragmentation of mass media with the rise of the Internet, introduction of pay TV and proliferation of niche publications. Lifestyle and demographic changes?more females than males, couples living together rather than getting married, couples postponing parenthood, increased longevity, better health and increased general literacy?all represent new advertising or media opportunities.

As a result, Australian corporations increased their spending on establishing one-to-one relationships with their customers. In 1999, more than $7 billion was spent on direct marketing, outpacing other, traditional methods of marketing, including advertising.

In 2001, Australian agencies had estimated total gross income of $527.9 million, down 16.1% over 2000, on billings of $4.06 billion. The top agencies in the country were Cordiant Communication Group/George Patterson Bates, BBDO's Clemenger Communications, Ogilvy's Singleton Ad Agency, Young & Rubicam Australia and DDB Australia Worldwide.

New Zealand

While Australian advertising flourished, the ad industry in New Zealand was just getting started. A handful of advertising pioneers made their mark in New Zealand in the early part of the 20th century, including John Inglis Wright, who opened an ad agency in 1906 in Dunedin.

New Zealand ad agencies' history started in 1911, the year newspaper publishers formed the Newspaper Proprietors Association. The association acknowledged the advertising agencies of the day?Haines, Illott and Inglis Wright?with letters of commendation, a form of accreditation for agencies that the newspapers had found to be creditworthy.

By 1927, there were 11 accredited ad agencies operating throughout New Zealand, five with more than one office. During the 1930s, New Zealand and Australia, like other industrialized countries, experienced the Great Depression; it was also the decade when commercial radio first emerged.

World War II provided a major catalyst for the development of New Zealand's advertising industry. The emergence of large-scale government advertising for war loans and patriotic appeals of all kinds provided much-needed work for ad agencies during lean times. These large-scale government advertising projects were handled by ad agencies on a panel basis, with three or four sharing the work and the responsibility. One important result was that politicians, not normally well-versed in selling or marketing, learned about the value and power of advertising for the first time. As a result, advertising became a key component in government communication.

The introduction of TV in New Zealand in 1960 coincided with the influx of multinational advertising agencies, which bought out established agencies such as J. Ilott Advertising in Wellington. Sir John Ilott, a stalwart of the advertising industry in New Zealand, sold his business to Ted Bates & Co. in the early 1960s. At the same time the center of New Zealand's ad industry began to move from its base in the capital city of Wellington to the country's center of population.

In the postwar years New Zealand agencies began to use market research and, partly through lack of outside facilities, developed their own research departments or spin-off companies. By the end of the 20th century, New Zealand had established itself as a creative hotbed for global advertising agencies. The Auckland office of Saatchi & Saatchi alone won five Gold Lions at the Cannes International Advertising Festival in 2000.

New Zealand's advertising agencies employed 1,000 people at the turn of the century, with another 2,500 working in advertising-related services. Advertising revenue also contributed to the employment of another 10,000 people in New Zealand's publishing, radio and TV industries.

The Advertising Agencies Association of New Zealand represents the interests of its members on issues affecting the advertising industry and agencies. It has 40 member agencies representing about 85% of agency billings in New Zealand, with combined billings of about $360 million.

In 2001, New Zealand agencies had total billings of $508.5 million, with gross income down 10.1% over 2000, at $72.2 million. The country's top agencies in terms of gross income were BBDO's Clemenger Communications, Saatchi & Saatchi, DDB New Zealand, Ogilvy & Mather and Young & Rubicam.

Regulation

Both the New Zealand and Australian ad industries have systems of self-regulation. In New Zealand, the system is managed by the Advertising Standards Authority and the Advertising Complaints Board. The authority's function is to promulgate a code of practice and develop policies on advertising standards. The board's function is to adjudicate complaints and advise the ASA on codes and public issues.

In Australia, the Advertising Standards Board is managed by the Australian Association of National Advertisers. The board is made up of a panel of individuals from different fields who meet monthly, discuss public complaints made about advertising and decide whether to uphold or dismiss those complaints.