Arab advertising comes of age

How do you see the future of the regional advertising industry?

There are new realities we have to deal with, and I expect that this will affect the way we operate as advertising agencies or - as we now call ourselves - as marketing-communication groups. Broadly speaking, we will have to provide more specialized services - a process we have started more than a decade ago at Impact/BBDO.

We also have to act as integrators, whereby the respective disciplines, and the message they carry, reach the consumer in a harmonious way. And we have to adapt to the rapidly growing globalization phenomenon, which is affecting us as much as it is affecting the market at large.

All this suggests that our future is dependent on our ability to adapt to this new scenario. I am reassured, though, by the fact that this is definitely not the first time we have had to face change in this region. The advertising people of the Middle East are both resilient and resourceful.

The region has seen the emergence of media buying units. Do you think that this will last?

The short answer is 'yes.' You cannot go against the trends of the rest of the world. You could delay implementing change - but delay is all you could do. Today, media buying units are proving extremely effective in servicing our clients. Our concern as advertising agencies was whether we would be able to integrate media once it was carried out by an independent unit.

This concern has totally vanished today. Not only can we fully integrate media in our clients' recommendations, but we are now able to provide better media results thanks to more specific and more effective media tools - tools the traditional agency had no access to.

How do these trends affect your business? Some agencies seem to feel that clients are not paying enough for creative services.

Agency compensation - with or without media as an agency service - is a very complex issue. But it is like when paying for any service: there must be a correlation between the service that is rendered, the quality provided and the price paid.

Perhaps the key difference today is that every communication service or discipline is paid for separately, while historically 'full-service agencies' charged a lump sum for all services. What is important is fairness - that good clients pay their agencies in a fair way. It is no secret that compensation represents a good portion of agency motivation.

Do you foresee any demergering in marketing-communication disciplines?

I don't think so. I believe that the traditional agency will retain a role of band leader and will harmonize the disciplines needed to serve a particular client. In a way, it could subcontract each discipline provider so that the client has access to the specialized service, ensuring that this is done in a strategically coherent and integrated way.

Of course, there are many cases where a client will seek the service of a specialized unit without necessarily utilizing all services the group provides. But being part of a marketing-communication group offers many advantages to the specialized units. They can handle their own clients while benefiting from multidisciplinary clients as well. What is important for the specialists is to feel that they can grow in their own speciality and that group resources and support are there when they need them.

What about consolidation? It seems that all agencies are merging together.

I believe that we are getting close to the end of this consolidation process. You know, this has started a while back, in 1986, when Omnicom became the holding company of BBDO, DDB and, later, TBWA. Several agencies' brands were integrated over the years, such as Needham and Chiat Day to name only those two. And many specialized agencies were acquired as well.

Will there be a place for small, independent regional players?

Today, there are very few big agency brands that remain independent. The small boutique agencies may continue to provide local services to small clients. But I foresee that medium-size agencies will have problems surviving without some form of partnership with the major players.

Competition will increase to the extent of making it very tempting for the clients of those agencies to take their business to the big players. It is an inescapable reality - the same reality the entire business world is facing: you are either linked to the big guys or you decide to become a craftsman. Let me add that being a craftsman is neither wrong nor less profitable - it is simply a matter of choice.

But advertising is not like making cars - you need very local thinking.

You are right. And as you have heard it said before, 'All business is local.' The consumer is local, living in a local market, subject to local conditions and abiding by local traditions. But the world is increasingly becoming a smaller planet.

Trends and aspirations migrate faster than people, and successful agencies understand this reality. They capitalize on their international exposure and know-how and, most importantly, they apply their knowledge of the consumer's expectations in the most locally relevant fashion.

What are the challenges for the advertising agencies in the region?

Like any service industry, advertising and specialized marketing services are highly people-dependent. I believe that our priority as an industry is to attract the highest number of quality people. While we see a high number of job hunters join the profession, many newcomers lack the passion or commitment.

Advertising is more than a job - it is a way of life. I see too many cases of people who after two or three years jump ship and join international companies, perhaps for a better car, a little more money and a clearer future. Our challenge is to convince people we believe in that advertising in the Middle East is more than a job - it can be a career. We have not succeeded yet in bringing to advertising a high level of respectability. This needs to be addressed more rigorously.

Local management seem to have problems keeping creative people.

Creative people are a very special breed. I know because that is where I started myself. The best thing to do in order to retain qualified, passionate creative people is to provide an environment that is conducive to creativity and to make sure that big ideas are not dropped easily.

In a way - because creativity is the heart of our service - we have to defend our creative ideas convincingly. There is nothing more frustrating than seeing a terrific idea being dropped for the wrong reason.

Are there enough trained people?

There are more university programs preparing people for advertising and marketing-communication than ever before. The programs provided are of the finest quality. But, clearly, this is not enough. The leading groups have to provide their own internal training.

This is the case with Impact/BBDO, where we offer our people ongoing training across all disciplines, both in the region and abroad. But this effort has to be combined with the gain of respectability as well as the infusion of passion for the profession.

Aren't you concerned that you will be training people who might end up working for your competitors or clients?

It is always sad to see good people leave. But there are times when you cannot prevent this from happening. Impact/BBDO has always been regarded as one of the best training grounds for the profession in our region.

Nevertheless, it is particularly rewarding when those who were trained at Impact/BBDO end up as our clients, or after a few years spent in a competitor's organization, they decide to come back. Both cases happen quite frequently. The bottom line is that we will continue to provide the finest training for our people - you just can't grow without a decent internal training program.

Is there an imbalance in terms of talent between Lebanon, Saudi Arabia, Egypt, the UAE and Kuwait?
Absolutely not. Every market needs to be served by the best talent possible. Moreover, we often rotate our people across markets so that they gain comprehensive regional exposure and diversity in their career with us.

Agencies and media have been complaining that there is not enough money and that there has been no growth for the last seven years.

While there is some truth to your statement, one has to understand the real reasons for this situation.

First, the costs of running a quality marketing-communication organization are rather high in the region. The primary cost factor is compensation which, for a market our size, is at par with Europe.

Second, from an income pool standpoint, we suffer from a devalued media market. The whole Middle East market in terms of media value is smaller than South Africa or Belgium. This is unbelievable given the strategic importance of our region to worldwide advertisers. Our hope is that we will witness a gradual adjustment of media costs to efficiency, while additional new media will come in place and contribute to the growth of our profession's revenue pool.

The Middle East has had a fragmented advertising market for years. Will this change?

The Middle East is not one market: it is a geographic space with several common criteria. But the fact of the matter is that we face here geographic diversity as well as demographic and psychographic variances. However, as is the case worldwide, we are witnessing regional harmonization in the Middle East just as the world at large is witnessing increased globalization.

This dual phenomenon is mirrored by our media scene, where we observe the proliferation of local and specialized media adding to the fragmentation on one hand, and an increase in regional media contributing to the harmonization across the region on the other.

Where do you see your company further down the line?

We want to continue growth through disciplined expansion: that means more and larger specialized companies across our markets. We will maintain our regional expansion and are now finalizing our presence in Morocco and other parts of North Africa. And most importantly, we want to maintain our growth by strengthening even more our partnership with our existing clients.

I have always believed that creativity must play a pivotal role at Impact/BBDO. This will never change. Equally, I have always favored a long-term partnership mode with our clients.

Partnership is not just a trendy word - to me it means involvement and knowledge of our clients' business beyond advertising or marketing services. It means having a proactive attitude towards our clients' markets and our clients' consumers.

It means being able to apply our know-how and resources in the most creative and the most impactful manner. My vision is to be this kind of company and to surround myself with the people capable of sustaining this vision. The good news is that I already have those people.