Elie Khouri has been in the media industry for 22 years, but the boss of Omnicom Media Group says his real work is only just beginning. And the softly, softly approach just won’t cut it anymore.
Elie Khouri is in a hurry. We meet at his offices in Dubai’s Media City, where the chief executive of Omnicom Media Group (OMG), MENA region, looks fidgety. There is a lot on his mind.
“Our business has a bad name. You know why? Because people don’t know what we do. They think we are bunch of media traders. We all have to change things. I have to change things, starting now.”
Bad name or not, for Khouri at least the industry has been good. OMG is part of the Omnicom Group, the leading global advertising, marketing and corporate communications holding company. Khouri himself leads the operations of two leading communication planning agencies, OMD and PHD, as well as several specialist companies and units.
According to monitoring sources, last year saw it generate $1.5bn worth of billings across the GCC and Levant. The awards have carried on rolling in, as have big new accounts — LVMH, Hershey’s, Bank Al Belad, HP and McDonald’s all joined Khouri’s empire, while other big names such as Henkel, Carlsberg and Fonterra have stuck around despite the worst financial crisis in living memory.
But you wouldn’t know it from Khouri.
“People need to wake up and realise what’s going on, they need to see that this industry is changing. And if they don’t adapt to that change, they won’t be around much longer,” he says.
Khouri is quick to dish companies that are just focused on media buying, arguing they need to move quickly into the digital arena.
“That isn’t a choice or some kind of utopian idea I just dreamt, it is fact, and I’m afraid not everyone in this business gets it yet.”
Khouri says the digital revolution is already underway. But not as everyone imagines it: according to his figures, digital advertising now accounts for around $120m a year in the MENA region — or nearly four percent of the estimated real worth of the industry, some $3bn. That figure is already bigger than radio and, within two years, is likely to overtake outdoor advertising. In just four years, by his projections, the digital market could account for half the television advertising market.“The problem is everyone thinks the industry in this region is worth $11bn or more. It’s not. That figure comes from monitored media at rate card value, but we all know the real number is less, about three times less. It’s actually shocking, the real figure, when you take discounted rates and free advertising into account.
“But it means that people aren’t looking at the real numbers. They don’t want to be in digital because they think it’s too small, when it is already four percent of the industry. They don’t understand it so they don’t invest in it,” he says.
But Khouri argues that even the players who do see the real figures are looking in the wrong direction. Digital media is no longer just about “clicks and banners” but about social networking sites. Facebook, Buzz, blogs — that’s where the real action will be.
In fact, in just two years, Khouri says that mobile marketing will be a standalone company within his group. He points out that at the last Superbowl final in the USA, Pepsi ditched its annual $20m expenditure for a 30-second commercial, choosing instead to invest the same amount across 30 days in social networking sites.
Khouri adds: “Today we are spending a lot of time understanding social media and social networking and how do we capitalise on those opportunities for our clients. A few months ago we were rapidly exploring this but it’s becoming more. It’s evolving.
“Do you think Pepsi would have thought of spending $20m on social networking sites even a year ago? Of course not, but they are the client spending the money and they realise that social networking sites is where they should be.”
If digital is where the action is, Khouri is quick to point out that digital alone will get you nowhere in the industry. His own company is also focused on ‘business intelligence’ and ‘branded entertainment’ as growth sectors. BMW placing its new X3 on the James Bond set may have seemed like a neat gimmick, but it’s what Khouri describes as the “ultimate goal” of the branded entertainment sector. Emirates Airline changed the face of the industry when it bought the naming rights to Premiership soccer club Arsenal’s new stadium five years ago. Celebrity endorsements, branded content and live media also make up part of the sector.
Another major development is a focus in business intelligence, which not only reduces the time spent on managing consumer, media and market data through automation, but maximises its usefulness through analytics. Media and marketing decisions, rooted in robust and timely insights, then generate even more impressive results. Knowledge is power and business intelligence is at the heart of it. This is what will complete the transformation of media buying agencies into communications planning specialists.
But while Khouri has good reason to be optimistic about his company’s own prospects, he is more downbeat about the industry as a whole. He says the highs of 2007 and 2008 may never return.“I don’t want to be pessimistic but you have to be realistic. What happened globally is making us reconsider the whole industry dynamics and I think we are shifting our focus from certain areas to other areas,” he says.
“While the traditional or legacy media are here to stay, the major growth will come from we call traditional old media to ‘new’, emerging media. The recession has cooled down advertisers’ thirst for marketing investments,” he says, adding: “we had some great years of growth and now people are asking when they will ever return.
“The truth is it may take ten years, or maybe we will just never see that kind of growth again. People are stuck in the past. This is the industry you would least expect to see that in, but sadly we are the worst when it comes to moving forward.”
This month Rupert Murdoch told the Abu Dhabi media summit that the region’s advertising sector needed far more transparency. Does he agree?
“Obviously, marketers expect us to be transparent in what we do with their communications investments, so in turn we need media owners to provide a proper evaluation of their performance,” Khouri says. “Audience data — or even more simply, circulation audits — are essential components for buyers of advertising, brands and their agencies. In turn we also need to properly evaluate the effectiveness of our decisions and that’s where business intelligence comes in, as it marries our media data with our clients’ market figures,” he adds.
So what about Khouri himself, what does the future hold for him? After 25 years in the region and 22 years in the industry, there’s certainly no sign of the awards slowing down. Since 2008, his regional networks have accumulated 41 awards and the title of ‘Media Agency of the Year’ in 2010.
But it appears Khouri wants much more than awards, as he plots a course to change the entire media industry.
“For me it’s doing something constructive for the industry. It’s not about power and money; you get both anyway when you are leading a big organisation. I care more about making my mark in this industry.”
But hasn’t he already done that? “Yes, but there is so much more still to be done.”
$1.5bn – worth of monitored billings the Omnicom Media Group generated last year in the GCC and Levant.
$120m - digital advertising now accounts for around $120m a year in the MENA region.
$3bn – estimated real worth of the MENA region’s total media investments.
41 – number of awards OMG and its networks have won since 2008, along with the title of Media Agency of the Year in 2010.
$20m – amount Pepsi paid for ads on social networking sites instead of commercials during the Superbowl.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.