By Anil Bhoyrul
Anil Bhoyrul meets media tycoon, Elie Khouri, and asks him what the future holds for the advertising industry.
Anil Bhoyrul meets Gulf media tycoon, Elie Khouri, and asks him what the future holds for the Gulf's advertising industry.
Elie Khouri is in a good mood. The regional managing director of Omnicom Media Group (OMG) has just stepped off a plane from Las Vegas, and is showing off the very fancy new coffee machine in his office.
"I'm enjoying my life. I don't see myself as a hands on guy. I leave it to the directors and managers to perform their job. I'm just somebody who makes sure we are all going in the same direction," he says.
The industry still has a long way to go in creativity but big efforts are being made. The latest Lynx award is proof of that. The ultimate benchmark of creativity is Cannes and we won awards there.
Whatever it is Khouri does, it is certainly working. OMG, both globally and regionally, has had another outstanding year, picking up yet another string of awards. The media and marketing giant is the biggest, and by many measures, also the best.
The New York based holding company last year saw revenues hit the US$12.7bn mark, with first quarter figures for 2008 already showing a 14% rise to US$208.7m. Its Dubai office has led the Middle East charge, with prestigious accounts including the consolidated businesses of the Dubai government.
Khouri himself has been in the top 50 of the Arabian Business Power List for the last two years running, and as the market keeps on growing, so does OMG. It's a big responsibility, but for Khouri, just part of the job. "Do I get scared handling such big accounts?
I don't get scared because when you are convinced of something it becomes fun to do it. Yes there is pressure but I thrive on the pressure. Without the pressure I get bored," he says.
There is no danger of that in the near future, with advertising spend in the UAE alone rising from US$869 million in 2005 to US$1.3bn last year, according to a report by the Pan Arab Research Centre.
But the bigger the spend, the bigger the players - and the bigger the problems. Last month, Saatchi & Saatchi's global CEO Kevin Roberts made a flying visit to Dubai to promote his new book The Lovemarks Effect: Winning in the Consumer Revolution.
Moments after arriving back from his trip he stunned the local industry by launching a blistering attack on its standards in CEO Middle East last month.
Roberts claimed creative agencies in the region "had failed to embrace modern technology and were producing work that looked as though it had been made in 1995. I think it's cr**, absolute cr**.
They haven't embraced the internet or mobile technology and they are producing work that on the whole looks like it has come from 1995. It's just so disappointing."
Roberts singled out real estate advertising as being of a particularly poor standard, saying: "Just look at all the money that is spent on real estate. And then look at all the work and it all just looks the same.
You've got to be kidding me. It just cracks me up. I think everybody is frightened to death. They are frightened of clients, of bureaucracy, of risks, they are frightened socially, they are frightened of offending people and they are frightened of the diverse nature of the population."
Khouri isn't impressed. Most of what he says isn't printable. Although stressing that Roberts is purely in the advertising business, he says: "What I didn't appreciate was the tone of his message when he came to Dubai.
I may agree with the content of what he said, but it's a bit aggressive for the sake of being aggressive. If you have comments, fine you can put them across in a constructive way.
The industry still has a long way to go in creativity but big efforts are being made. The latest Lynx award is proof of that. The ultimate benchmark of creativity is Cannes and we won awards there," says Khouri.
He adds: "You have to focus on what matters most and that is ideas - we focus on innovation and driving the culture of creativity. That's what we think sets us apart."
The challenge for Khouri and his team in the year ahead is dealing with the massive and continuing increase in work, especially in the UAE. Of last year's US$1.3bn advertising spend, 16% was on television, 13% on magazines, 2% on radio commercials and 1% on cinema adverts.Cannes Lions, the organiser of the Dubai International Advertising Festival, predicts that the UAE's advertising expenditure will rise to US$2.4bn in 2009.
So where does the future lie for advertising? Khouri explains: "What will be massive is the mobile phone market. Not today, because in the Middle East I think it is going to be a couple of years before we see some action.
But it will be massive because mobile penetration is very high and you will have 4G soon. Everything starts with the technology. You have a lot of business people and a lot of creative people coming together to work out how to market this, so it will be very good.
What will be massive is the mobile phone market. It will be massive because mobile penetration is very high and you will have 4G soon. Everything starts with the technology.
At the end of the day mobile is with you all of the time, much more than TV or outdoor. It is just figuring out a way for advertisers to keep on interacting with you," he says.
If mobile advertising is the future, right now the focus is on the print. Earlier this year saw the launch of Abu Dhabi based The National, a launch that has highly impressed Khouri.
"The National has raised the quality. I highly rate it and my clients highly rate it. The quality is superior, and the way they are doing is fantastic," he says.
He adds: "In print there is still room for growth. The more the merrier because that makes our job more interesting. Our job starts to become more fun when you have more products and more challenges ahead.
We can take as many products as are launched, but the question is how many will be profitable and by how much. From a consumer point of view if we have ten newspapers then excellent because they will all compete, there will be great choice.
From a business point of view, it's up to them to come up with a business model that will work."
So what about the re-launched Emirates Business 24/7? Khouri says: "It's got challenges. People in this part of the world are not used to niche newspapers. They have to figure out how to move from here, today.
They have built something which is good, but how to make it superior is the challenge for them." He adds: "When it comes to newspapers, quality equals readership. I am more concerned not about circulation but readership and the quality of the readership, and the quality of the articles."
While other forms of advertising including radio and television are forecast to grow, Khouri also feels the biggest jump could come in outdoor advertising. But like some of his colleagues, he is quick to call for more regulation.
"It's not monitored, it's not regulated and they it doesn't have its own body - but outdoor is a very large medium. This is why there are companies like us because if you are a client and you want to book an outdoor site, our job is to tell you the good and bad suppliers.
And our job is to check. A lot of people will tell you they bought you a 100 faces on outdoor but did they really do that?"
Under Khouri, who in 2002 brought together the three network companies of OMG, the other "big challenge" is finding quality staff - and then, harder still, getting them to stay on board.
He says: "My biggest challenge today I think is identifying great talent. Who you hire and who you fire is the important stuff, especially in the service industry.
You can hire a good person but you have to make sure they stay. We have less than 10% turnover. The challenge today is keeping up with inflation. People are jumping careers even if they love you."
Having been in the business for 22 years, and in Dubai since 1991, Lebanese born Khouri is now widely seen as one of the "doyens" of the industry.
Hugely respected by his peers, Khouri is one of the handful of media business leaders who are likely to have a strong say in how the industry shapes out over the coming years. He laughs when asked whether he is "friends" with all his competitors.
"It's a highly competitive industry but I think in the top three agencies there is a code of ethics which we follow and we stick by certain principles - its unwritten of course. There is a red line which we agree we do not cross."
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