Tourism opens bidding for $35m account

M&C Saatchi's campaign helped to attract record numbers of visitors to New Zealand.

Tourism New Zealand will today invite bids for its $35 million advertising account - one of the country's largest.

The Government agency decided to offer the business after talk that M&C Saatchi, the incumbent and the creator of Tourism NZ's successful 100% Pure New Zealand campaign, was bidding for a bigger contract with Tourism Australia.

An $8.9 million boost to Tourism NZ's budget granted as part of this year's Government spending round was also behind the move.

"The budget was a catalyst, but speculation that M&C Saatchi was pitching for the Tourism Australia account was also a factor," a Tourism NZ spokeswoman said.

It had been unable to confirm M&C Saatchi was bidding for the Tourism Australia account as the pitching was confidential, but said it had raised the matter with the agency.

"It is a difficult situation to be in," the spokeswoman said.

Tourism NZ has previously said that it would be untenable for M&C Saatchi to hold the New Zealand and Australia accounts.

Since the 100% Pure New Zealand campaign began six years ago, visitor numbers to this country have increased by more than 50 per cent and their foreign exchange spend has doubled, reaching a record $6.6 billion last year.

Pitches for the account are due in by June 10.

Industry sources have told the Business Herald M&C Saatchi was one of three final candidates in the Tourism Australia tender, believed to be worth about A$60 million. Saatchi & Saatchi and Clemenger BBDO are the others.

Tourism Australia is expected to disclose the successful bidder shortly.

If M&C Saatchi prevails, it is expected to resign from the New Zealand account immediately.

Advertising executives have said the conflict would be too great. If M&C Saatchi were doing a good job for one client, it would effectively be limiting the success of the other.

The contract between Tourism NZ and M&C Saatchi allowed either party to terminate after a notice period of six months or immediately in the event of a conflict of interest.

Tourism NZ said no matter the outcome of its tender, the 100% Pure New Zealand campaign would continue.

"We have no intention of dropping the campaign. It is award winning and it has done very well for us," the spokeswoman said.

The heads of local advertising agencies have said there would be widespread interest in the account.

"We'd love to have a crack at it - it's one of the most plum, prize accounts," Nick Baylis, chief executive of advertising agency FCB New Zealand, said last month.

The Government's $8.9 million boost to Tourism NZ's funding is aimed at promoting the country overseas in the US, Britain and Japan - the three key tourist markets.

Tourism generates about 10 per cent of GDP and employs one in every 10 workers. The Government says visitor numbers are expected to top more than three million a year in 2010, from 2.1 million in 2003.

Purely profitable

* Tourism is now one of the country's major export industries.
* It generates about 10 per cent of GDP.
* And employs one in every 10 workers.
* Visitor numbers are expected to top more than three million a year in 2010.

- additional reporting Karen Chan