Traffik360's Marcel Khairallah on how his gift ad agency is doing big business with world's top companies
If you’re a business traveller making your way through the world’s airports these days, you are more than likely to pick up a selection of free gifts alongside your purchases at duty-free outlets. You may, or may not, give these trinkets a second thought, but this niche industry is actually a global multi-billion-dollar concern, involving some of the biggest corporates on the planet. It’s all part of yet another way for blue-chip giants to get their message across to a hard-to-reach demographic in a world where studies estimate that people living in cities are exposed to over 5,000 different advertisements every single day.
The industry is known internally as the below the line solutions sector, and its undisputed leader in the Middle East is a small firm based in Dubai Media City, Traffik360. The company’s colourful and trendy office is stacked high with a bewildering array of gifts, from ashtrays to decanters, and from trolley-bags to footballs. To outsiders, the company might seem a small concern, but a short meeting with founder and owner Marcel Khairallah reveals that Traffik360 is actually doing business with some of the most famous brand names in existence. Diageo? Check. L’Oreal? Check. Unilever? Check. The client list that comes tripping off Khairallah’s tongue is the envy of many larger companies, proof of the fact that in just over a decade, the Lebanon-born entrepreneur has managed to carve out a lucrative portion of this relatively unknown industry segment.
In many ways, Khairallah’s fifteen-strong team is proof of the UAE dream. Put aside glitzy thoughts of oil, Emirates Airline, and tourism for a moment. The growth in any economy — not just in the Middle East — is driven largely by its ability to attract small and medium-sized enterprises (SMEs). In the UAE, SMEs make up well over 90 percent of companies registered in the country, employing 60 percent of the workforce. As a result, firms like Traffik360 play a vital role in determining the economic future of the nation.
So what’s Khairallah’s business model? The businessman splits it into four separate sections: promotional merchandising (gifts with purchases), point of sale material and development and production (that’s the stands near store checkouts), advertising stands and print services. On top of that, Traffik360 also has a share in a local logistics firm, allowing it to provide shipping, warehousing and dispatch services for its clients.
“We create, we design, we produce,” Khairallah says. “Some agencies can only design but need other people to produce. Some people can produce but not design. So we try as much as possible to combine both and give a complete turnkey solution to the client.”
It’s a model that has come on in leaps and bounds since the firm was founded back in 2002, with a branch opened in Saudi, and a vital procurement office based in Hong Kong.
“There has been huge development — on the client scene we have acquired more and more multinational clients,” says Khairallah. “When we started we only pitched to local clients, because we wanted to test ourselves and not run before we could walk. But after the first multinational clients came on board, there was a flood.”
But it’s not just Middle Eastern work that the company has hoovered up by winning business from the global players. For Diageo, Traffik360 caters for the drinks giant’s global operations — including in the Americas and Europe — designing and producing products as diverse as Johnny Walker bags and Smirnoff speakers.
That translation from a Dubai-based outfit into a global presence has undoubtedly been helped by Khairallah’s membership in the International Advertising Gift Council (IGC), which has 56 members — with over $1bn in turnover overall — in 53 countries around the world. The organisation became a cooperative in May this year, and allows members from different countries to discuss best practices, weed out the good suppliers from the bad, and — most importantly of all — share global clients.
“We have only one member per area, so we don’t compete, and the ultimate goal is to pitch to the big multinationals,” the Traffik360 founder says. “The advantages for clients are numerous: we can club together for orders, work excellent deals with shipping agencies and get great economies of scale. And the client benefits from all sides – it’s a case of thinking global but acting local.”
Since the IGC formalised its operations earlier this year, Khairallah has already picked up more big names, with Bloomberg, Bayer and AstraZeneca joining the roster and Siemens shortly to follow.
Here in the Middle East, Traffik360 appears to have been one of the few firms to have seen some benefit from the financial crisis, with turnover rising an impressive 40 percent in 2009 versus 2008. When questioned as to how these figures came about, Khairallah says the answer is simple: the cowboys that presumed that it was an easy sector to enter have been forced to evacuate the industry.