By Anil Bhoyrul
Saatchi & Saatchi boss Kevin Roberts thinks the global economy cheerleaders are about to get a nasty shock.
Saatchi & Saatchi boss Kevin Roberts thinks the global economy cheerleaders are about to get a nasty shock, with social disorder becoming the next phase of the financial crisis.
Kevin Roberts likes to shoot from the hip, and during the space of our one hour meeting, the Saatchi & Saatchi Global CEO fires a lot of bullets.
On what lies in store for 2010: "People will turn to drugs, and violence against weaker people." On the region's advertising awards: "A shambles." On giving away free content on the internet. "Stupid." On the state of the newspaper industry: "Despair." Even legendary CEO Jack Welch gets a kicking for being guilty of "small ideas", and before we finish, I too take a bullet for being "way behind the consumer".
Bizarrely I still come out of it having thoroughly enjoyed the experience. Roberts, fresh from mixing with Bill Clinton and George Lucas in New York, has a rare gift for telling people how bad they are - and then being thanked for it. He did a pretty good job of this last time he was in Dubai, announcing that the standard of advertising in the region was "crap."
Does he realise he caused such a stir? "I hope so. I actually believe that great things come from great conversations."
Right now, Roberts' "great conversation" is on the state of the global economy. The recession appears over, the credit crisis is confined to history and the World Bank is forecasting growth of 2 percent for next year - while Goldman Sachs believes 2010 could actually produce 4 percent growth.
Roberts is in no mood for such talk, dismissing them all as "100 percent wrong" and suggests the worst is yet to come. "This is not a recession. This is a reframing of the world. Consumers are never going to go back to spending more than they earn. This was fundamentally a problem of consumers saving nothing and spending what they didn't earn. Recession is over but the bad times are here.
The only people that can borrow money are people that have money, and they are the people that don't need it. Unemployment is 70 million in the world. Consumers have moved, but companies have only moved on one level to cut costs. They haven't moved with consumers. They think everything is going to be great again," he says.
So just how bad will things get? "It will be tough next year because the stimulus packages are not stimulating. They are not working. The social costs will go through the roof. 70 million unemployed means more violence, more drugs, more alcohol abuse, more crime. It is already happening. You will see a social crisis in urban developed markets. Think Chicago, London, Mumbai. 20 percent of 16-year-olds don't find a job so they don't spend. They get pissed off because they believe they deserve it... People will lose hope and turn to drugs and violence against weaker people, their wives and children."
Roberts does see some growth, particularly in India, China and Brazil, but he is quick to point out that discredited politicians are busy talking up the economy and should no longer be believed. "Not a single person saw it coming, no president, no CEO. They say they did - complete nonsense. Toyota didn't see it coming. P&G didn't see it coming. And the severity was a surprise. Everyone in the Treasury got it wrong. Every journalist got it wrong. Every consumer got it wrong. None of my clients saw it coming."
Job creation, or lack of it, according to Roberts, is where the problem lies. The ideas of legendary CEO Jack Welch, based on the concept of business existing to create shareholder value, are "mostly small ideas... Unemployment is the biggest killer. If you are not employed you have no hope, no self esteem, no dream. You have no way out. We are not creating jobs."
Controversial stuff, but then Roberts is used to controversy. On his webpage he declares: "I have never believed that extraordinary results come from ordinary actions so I am attracted by extremes. I demonstrated the point when my Canadian Pepsi Team blew away Coke to become number one in the market. We celebrated by machine-gunning a Coke vending machine on stage at a conference. Risky? Yes. Stupid? Possibly. Memorable, inspiring? You bet."
And his impressive track record means that when he talks, it is time to listen. Educated at the Royal Lancaster Grammar School of which he is now a Sponsor Governor, he started his career in the 1960s at the London fashion house, Mary Quant.
He went on to be a senior marketing executive for Gillette and Proctor and Gamble and by the age of 32 he was CEO of Pepsi-Cola Middle East and he later went to become Pepsi's CEO in Canada.
He joined Saatchi & Saatchi in 1997 and under his leadership it has grown in revenue year-on-year and consistently swept the boards at the Cannes International Advertising Festival.
In 2002 he developed the Lovemarks marketing technique - based on the idea that the strongest brands are the ones that establish an emotional connection with the consumers. The idea won the agency a landmark $430m contract with JC Penney - and Roberts last year launched his second book on the subject. His job today is to "inspire" 7,000 staff, not to mention the small matter of running the creative campaigns for some of the world's biggest brands.
If anyone can really claim to have "seen and done it all", it is Roberts. And it would seem he has seen enough of regional advertising, having last year dismissed it as "crap". A year on, he says things are getting better, but points to the fiasco over the Lynx Awards, when several winning entries were found to be fictitious campaigns that never actually ran.
"It was a time bomb ticking. In the awards show you could fool yourself that everything was ok but in the real world the work was very average. The difference is that this awards show (Lynx Awards) was a sham. People were just putting stuff in there that was from fictitious clients. Now there is no place in the world where imagination has run riot more than in Dubai and that was not reflected in the creative and communications work," he says.
Roberts points to the hugely successful "My City My Metro" campaign for the Dubai Metro, created by his own agency, as a sign of improvement. He argues that the whole industry in the region now needs to move forward.
"Consumers are far too sophisticated they want to be engaged. We just had a lot of creatives here patting each other on the head. Clients here don't have big budgets but that's a plus. With a big budget you just hire David Beckham and get a Beatles soundtrack. With a small budget you have to be creative.
"How do you compete in a market that's flattening? By having a better idea. All dandruff shampoos get rid of dandruff. What makes a difference is the creativity behind those propositions. To stand out in the market you need to have a better idea," he says.
Roberts is adamant that in the new world economic idea, companies need to understand how much consumers have changed. "They are saying: ‘I bought a lot of things I couldn't afford or didn't need and I am worried about my job. I'm now going to buy things that make my life a little better but Im not going out on a limb again. I want to experience more and pay less. I want priceless value.' We are past looking for fame through provocation. The great work is work that wins the people's choice award," he says.
While he clearly revels in the controversy he often stirs, Roberts is very much in demand on the corporate stage, regularly addressing CEOs, economists and even presidents. Given he has generally always been right with his predictions, everyone wants to know what he is thinking - and more importantly, where he sees the next advertising dollar coming from. Again, he doesn't hold back, saying that despite the doom-mongers predicting otherwise, television will always be the biggest advertising medium.
"You'll just never watch Manchester United v Liverpool on your iPhone," he says, adding that the real challenge is how advertisers connect our family of screens - televisions, phones and computers.
Television advertising revenues in fact rose during 2009 despite the global slump, giving weight to Roberts' argument. But he says that other mediums need to buck up their ideas and do so quickly. Big weekly magazines like Time and Newsweek are "in despair", he argues. "As for print, I said to a newspaper conference last week that you have two words, news and paper. You are focusing on the wrong one, paper. Paper is just a distribution mode you discovered 100 years ago. It has delivery problems, trade unions and high cost. What you need to do is revamp your news coverage. Because nobody will ever come to you for breaking news again. You have to be the expert of analysis explaining what this all means.
"TV doesn't play that role and I am certainly not going to believe an internet blogger. But I will believe a respected newspaper - but they are focusing on the wrong things. The Daily Mail in UK now get 60 percent of revenues from non paper products but still from news."
What about the internet? Here, Roberts says everyone has got it badly wrong by putting all their content on the web for free.
"Giving away your news for free on the internet is the most stupid business model I have ever come across. What you guys are doing is putting the same content that was in print online. That's like putting a radio commercial on TV. I don't know what you guys were thinking... Free is a terrible business model in case you haven't noticed. I would take the hit, go back and win back your readers. You don't want free traffic. Give it to somebody else, let somebody else go broke. Free newspapers were a bad idea in the UK. They folded. It's a stupid idea; it's how to lose $50m in a year.
"Free is not sustainable. All the news sites will start charging. Everyone is gaining experience and traffic. Then you see what is important is not audience but profitable audience. It's happening at lightning speed and lightning fall out."
An hour into the conversation, it is time to go - though it seems that Roberts is only just getting into his stride. He has given many views on how to change and save the world, and who is to blame. Just after I turn the tape recorder off, I ask him why he hasn't ever gone into politics.
He looks at me with a sheepish grin: "I like power without accountability."