Worldwide Advertising: Country Profiles - Norway/A consumer-led boom is under way in Norway and, although the growth in ad expenditure has lagged behind the rest of the economy, the future for the country’s agencies looks rosy. Richard Cook report

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 Union.

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

Union.



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,

was licensed.



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.



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