Norway seldom manages to please the Eurovision Song Contest judges,
but then this is a country that has long chosen to make its own way in
Europe, in political no less than in cultural matters. A referendum that
finally ruled out going into the European Union was the most public
manifestation of this country’s wilful, independent streak. Whatever the
reasons behind it, the facts are simple. Since the decision was taken a
couple of years ago not to join the EU, the country has gone from
strength to strength and its booming economy is supplying Eurosceptic
politicians of whatever nationality or political persuasion with all the
ammunition they need to make a case against the economic efficacy of the
Certainly all of Norway’s key economic indicators make almost
embarrassingly pleasant reading. There is a hefty positive trade
balance, despite the fact that improving consumer confidence has
sharpened demand for multinational consumer goods. The economy as a
whole is underpinned by the country’s substantial energy resources. For
example, Norway is the world’s second largest oil exporter and it has
sufficient reserves to maintain exports at their current level for at
least another eight years, according to BP forecasts.
GDP is growing by around 3.3 per cent a year, while inflation barely
registers at all and unemployment of less than 5 per cent is one of the
best figures in Europe. Wage increases were more than double the
inflation rate last year at 3.75 per cent, leading to real growth in
disposable income and all the hallmarks of a consumer-led boom.
These sorts of figures have hardly been bad news for the advertising and
communications industries. The Norwegian Advertising Association was
forecasting growth of around 12 per cent this year, in line with that
achieved in 1996. These returns have been boosted by a considerable
privatisation campaign that has taken place n the banking sector. In
June of last year the Government re-privatised the first 20 per cent of
Norway’s largest bank, Den Norske Bank, and it has already announced it
is to reduce the Government holding to 52 per cent over the next couple
of years. In addition, the Government has also sold off parts of its
holdings in Christiana Bank, the country’s second-largest, and all its
shares in the third-largest, the Union Bank of Norway, and the sixth
largest, Fokus Bank.
The Norwegian media picture is no less idiosyncratic than the snapshot
of the country as a whole. Television accounts for only an 18 per cent
share of total Norwegian advertising expenditure.
Press, on the other hand, takes a 60 per cent share - by far the highest
in Western Europe. The explanation for this extraordinary state of
affairs is simple enough, however. The reason is that Norway had no
conventional commercial TV until 1992, when the private station, TV2,
The state broadcaster, NRK, was then a one-channel operation, reliant
for funding on a government subsidy and public licence fee. Since TV2’s
launch it has managed to build up a 30 per cent share of viewing,
although the state broadcaster hit back last year with the launch of its
second, non-commercial channel, targeting the younger viewers it had
lost to TV2.
So far, however, this has achieved just a 6 per cent viewing share.
Advertisers are banking on a growth in cable and satellite TV services
to provide them with the competition and coverage they need. Although
satellite dish penetration is low at 17 per cent, cable is received in
42 per cent of Norwegian homes, a figure that partly reflects the fact
that three quarters of the population is urban. Advertisers also lobbied
hard for the changes to broadcasting regulations, enacted in 1995, which
allowed the 30 local terrestrial TV stations to re-broadcast satellite
channels, thereby creating, in effect, a third terrestrial network. TV2
has lodged a claim for pounds 140 million in lost advertising revenues
as a result of this move, but there is little sign yet that the extra
competition is driving down the price of TV airtime.
’Cost per thousand on Norwegian TV is the highest in Europe,’ Helle
Lauvstad, Saatchi and Saatchi’s general manager in Oslo, explains. ’We
are the lead agency for Procter and Gamble in Scandinavia and it is
extremely concerned about the high cost of TV advertising in the
country.’ P&G’s concern is reflected in the fact that the multinational
giant is only the tenth largest television advertiser in Norway.
The press markets are still dominated by three daily papers: Verdens
Gand (which claims a readership of 1.3 million - more than a quarter of
the country’s entire population), Aftenposten and Dagbladet. In total,
more than 175 newspapers are printed in more than 130 different centres.
The general interest weekly magazine, Se and Hor, is the country’s
number-one seller with a circulation closing in on 400,000.
Norway’s impressive creative reputation has been dimmed in recent years
by the remorseless charge of multinationals into the country. In the
last year, however, there has been a wave of agency launches, some by
the same people who sold out to the multinationals in the first place.
This new wave of hotshops, led by agencies like Opp and Bold, is helping
to re-invigorate creative standards across the board. ’I’m sure that
advertising in Norway had become too bureaucratic,’ Lauvstad admits,
’and these new hotshops are starting to change all that and bring some
of the excitement back to advertising. And that, in turn, is spreading
through all the agencies.’
Zenith Media Worldwide points out that despite increases in recent
years, advertising expenditure growth has actually lagged behind the
growth of the country as a whole. Advertising expenditure, which
represented 0.85 per cent of GDP in 1988, has now slipped back to 0.68
per cent (1995 figures), but that’s chiefly because the graph for
government growth has been so steep. With the car and financial sectors
both planning to increase adspend significantly in the coming year as
they come out of a mild recession, the future is looking very rosy for
agencies. There is an election scheduled for September, but advertising
traditionally plays only a small role in such political activities. In
fact, the one potential cloud on their horizon comes from the fact that,
according to consumer research, advertising as a profession is held in
almost universal contempt by most Norwegians. In fact, only car salesmen
are less admired by the population at large.