The Welsh performance was a far cry from their previous showing in June where they led world champions South Africa at half time at the Millennium Stadium, only to be squeezed out 34-31 late on.
But Gatland, who will return to his home town of Hamilton for the second Test on Saturday, is adamant his men are heading in the right direction.
"I don't think it was a step backwards," said Gatland. "I've received texts from people in Wales who though that first 45 or 50 minutes was as good as anything we've produced.
"Being here in one of the strongest rugby nations in the world is a great opportunity for us to learn. If we had been somewhere else on tour and getting a result and doing okay, it would give you a false sense of where you are at.
"But I thought they were outstanding in the second half. Any chances they created or had from turnovers, they punished.
"They kept the tempo and pace up for the whole second half and they were very clinical when they had a few chances and that's what we need to be."