By Sarah Townsend
Alex Saber, who runs the regional operations of one of the world’s biggest media companies, says that despite a slew of recent contract wins, he is still conservative in his outlook for the future.
Smiley, tentative, eager to please: Alex Saber is an unlikely regional chairman of a huge multinational because he seems, quite simply, too amiable.
Yet, as Middle East and North Africa (MENA) head of Starcom MediaVest Group (SMG) — part of Publicis Group, one of the biggest advertising and media companies in the world — and its consolidated media buying unit, VivaKi, Saber’s record speaks for itself.
In Dubai’s Media City, where his office is based, he explains the factors behind the company’s growth in recent years, the plight of traditional media and whether SMG can adapt as mobile continues to dominate media.
The first ten minutes of our meeting is taken up by his account of another successful year for SMG. For the third consecutive year, it ranked as the number one agency in MENA in media billing firm Recma’s latest Global Billings Rankings Report, published last July and based on turnover growth.
Saber says SMG led with a 20 percent growth in billings and 25 percent market share — “and I expect no less from our performance in 2015”.
Last year the agency had 34 new business wins — including a “lucrative” contract with telecommunications provider Du in December, although Saber will not disclose its value — and at the time of our meeting in March had already notched up ten wins this year alone.
“ was a record year for us with zero losses, which was notable as in this industry you are always winning and losing business. We are clearly on a winning spree.”
The company’s core accounts include Samsung, STC, Mondelez International, Tiffany & Co, Sunbulah, Qatar Foundation, Emirates NBD, Qatar Airways and Savola Group, and 2014/15 wins included Souq.com, Al Okaz, Abu Dhabi Media, Sharjah Islamic Capital, Marks & Spencer, Pfizer, Heineken and Haribo, among others.
“We have a diverse portfolio of clients and are not skewed to either local or international. We try to maintain this balance when pitching for new work,” Saber says.
Inevitably, the meteoric rise of digital has led SMG’s growth. The agency accounted for 40 percent of digital advertising in the region, according to Ipsos, and digital advertising revenue in 2014 also grew by 40 percent year-on-year.
This was in part a reflection of its increasing focus on digital media channels. Last year, for example, it invested more than 35 percent of its total annual spend on mobile.
“Our target was for digital [including content and data analytics] to account for 50 percent of our revenue by 2017; we actually hit this by 2014,” says Saber. “Digital is the name of the game at present, and we have made numerous acquisitions in the past year [of multimedia branded content companies, including Relevant24, Content@Scale and RUN], which have set us apart and enabled us to grow in this area.”
Saber says he is aware that mobile media is a game changer for the industry and will require investment and creativity to harness the opportunities it presents. After all, the UAE is known for having one of the highest mobile penetration rates in the world — 200 percent, according to various sources, which represents at least two mobile devices per person.
However, he wrote in one of his recent columns for trade magazine Campaign Middle East that while mobile accounts for 45 percent of media time across the industry, it generates just 2 percent of advertising revenue. In terms of monetising mobile, nobody has been able to crack it. And when I ask Saber how SMG will do it, he is stumped: “Mobile lags behind in advertising revenue. It is a major challenge.”
He claims that until there is robust data to show the sorts of returns mobile could provide, the industry will be unable to demonstrate its value to potential customers. “Gauging the size of the market is a challenge because there are no central figures. We need to crack the telecom providers who should be able to provide us with that crucial data. We are trying our hardest but it is very difficult.”
If the industry can find a solution, he says, mobile could easily rise to account for between 10 percent and 15 percent of total advertising revenue.
However, there is room for growth in the advertising sector in general, he adds. “Not all MENA markets are as developed as the UAE and in many countries — Saudi Arabia, for example — clients are still investing in traditional media such as print. It’s not flourishing, but what you see happening in the UK or US, where print is effectively dropping off a cliff, is not happening here.”
But Saber predicts it will go down eventually. Last year gross media billings in the UAE increased by 15 percent, according to Ipsos. Of that, TV takes the lion’s share across MENA, radio and cinema also enjoyed double-digit growth but newspapers and magazines are reaching a plateau in growth in most countries in the region.
What’s more, Saber says he does not believe print-based brands will be able to charge for online content to sustain their business model in future. “The Arab consumer is used to getting media for free so I expect it would be difficult for them to change their mindset. Print media faces revenue challenges in future.”
He adds: “All of these trends affirm that digital is undoubtedly driving double-digit growth throughout our business. This means we must use technology and content solutions to drive our clients’ businesses forward in the era of velocity marketing. This means bringing once siloed entities and disciplines together to build brands.”
Thus, SMG is making structural changes to maximise its service to clients. A month before our meeting, VivaKi announced a significant restructure related to ‘programmatic’ media buying. Programmatic is an industry term that refers to the practice of using automated real time bidding tools and other technology to target ad buys at the optimum audience at the optimum time. It is considered essential to any media buyer’s digital strategy.
Under the arrangements, VivaKi programmatic advertising traders will be redistributed to the other Publicis media agencies, including Walker Media, ZenithOptimedia and SMG. Details of how many people will be redistributed globally have not been revealed, but around 120 ad buyers were moved in the US and VivaKi MENA will be affected, too.
The move is intended to bring programmatic buyers closer to the agencies and their client so they are not operating in a siloed manner and can be more in tune with the client’s day-to-day operations and needs.
Simon Harris, programmatic director at Mindshare, wrote on his blog in February that the restructure is “massive” news. “This is definitely a watershed moment for the industry, because while individual media agencies have been setting up custom desks for clients for the last couple of years, this is the first time a holding group has said all buying will be done at an agency level with the trading desk focusing on R&D, data management and analytics.”
Other commentators were more sceptical. Industry magazine Advertising Age reported that the move suggests “VivaKi no longer wants to buy ads.” It said: “[The move] is an admission that the traditional trading desk model no longer works for Publicis.”
However, Saber rejects this claim, and Harris’, that the restructure is big news. “It will have no effect on our day-to-day operations or our long-term strategy. We are simply moving services to the brands. The same will happen in the Middle East. It’s not a big deal.”
There will be no redundancies, he insists — “in fact, we are on an aggressive hiring spree”.
SMG is not denying the importance of programmatic, Saber says, adding that a new industry tie-up between the group’s programmatic tool Audience on Demand (AOD) and data analytics firm Effective will help it to better service its regional advertisers. “There is quite a bit of a gap in local third-party data in the MENA region, the market is heavily dependent on data from international players.
“This partnership will enable advertisers to use real-time data when making programmatic buys, effectively allowing an advertiser to activate a digital campaign when, say, a competitor’s spot is airing.”
AOD has seen double-digit growth in 2014, Saber says, and is expected to continue growing in 2015.
SMG has plans to expand across MENA, particularly in countries such as Egypt. “On-the-ground presence, volume and availability are crucial to any agency’s success,” Saber says, noting: “The UAE is on a healthy recovery path and continues to offer organic business growth — particularly as the Expo 2020 win prompts large investments in digital ‘smart’ city infrastructure.”
“But it is not insulated from political instability elsewhere in the Arab world, which is putting significant pressure on regional and local media suppliers.”
According to one of his colleagues, Saber made regular trips to Egypt and neighbouring Gulf countries when the Arab Spring placed the agency and its clients’ businesses under pressure. Even now he reportedly still works 17-hour days, is a frequent visitor to the group’s regional key and prospective markets, and, as such, is “always jetlagged”. But his sometimes “excessive” attention to detail, according to the colleague, helps him “stay on top of the game in an increasingly competitive media landscape”.
Saber is married with two sons and, though Lebanese, has been living in Dubai since 1975. He says his biggest inspiration comes from SMG’s leaders: Maurice Levy, chief executive of Publicis Groupe, who has turned it into one of the “powerhouses of the advertising world”, and Laura Desmond, global chief executive of SMG, who is “driving investment in our digital capabilities and positioning us for the future”.
Last month, ZenithOptimedia published its latest annual Advertising Expenditure Forecasts report, predicting that global advertising spend will grow 4.4 percent to reach $544bn in 2015. The agency itself, however, has reduced its own forecast for global advertising spend by 0.5 percent to take account of the deepening recession in Russia, Ukraine and Belarus, and a slowdown in growth in China.
“We still need to be a bit conservative in business at the moment,” Saber concludes. “There is lots of growth but we must be cautious.”