One consequence of the recession is the region's media space has become markedly less fragmented in the last year or so. Has this actually proved to be a blessing for the advertising industry and more so for your line of operations?
It's not that the recession made the media landscape less fragmented, what happened is that the weaker media have disappeared to a degree.
It's been a Darwinian reaction to the new market conditions and, in essence, a natural outcome.
You could even argue that we don't have less media fragmentation but more.
In addition to new launches in the "traditional" space, we see the rise in prominence of social media, not just from an audience point of view, but in terms of advertising opportunities and certainly budget allocations.
The downturn has brought them to the fore for many brands.
Some ad industry observers say clients are now less prone to consider "out-of-box" solutions in their media exposures. The tried and tested is what they prefer. Do you think this is the case?
It's again a natural reaction for people to run for safety in troubled times.
Consumers focus on the essential, brands they trust, messages that reassure them, while brands do pretty much the same.
They tend to aim for results they can count on so tried-and-tested is a more traditional response than the "never done before".
Yet, there are examples of brands doing just that.
Just look at Canon and the digital first they've done with PHD and Ikbis.
This won a silver award at this year's Lynx and demonstrated that even when budgets are under pressure, there is a strong rationale for accepting a calculated risk and deploying a daring approach.
This is how we create a breakthrough and yield a strong impact.
Would you say that the recession could have set back new-line media and marketing platforms by a year or so?
The recession has already put the emphasis on digital platforms. What are we talking about today? HD, 3D, IPTV, interactive...
The solution to the downturn is our ability to find new solutions, usually through technology.
It hasn't set back what you call new-line media and marketing platforms, it has made them more essential than ever.
In recent years, you have been quite vocal about digital platforms as being one no self-respecting advertiser can afford to ignore. Are all of your clients convinced this is indeed the case?
Like with anything new, you have first-movers and people who advance maybe more cautiously.
Eventually, they all get there. This is where we are today.
The large majority of our clients have now embraced digital media, in one way or another, and they're not looking back.
The trend is set and it will now only pick up pace.
We're expecting the share of digital in the total media investments to reach five per cent this year and overtake radio and cinema in the next few years.
In some countries, it's already second to TV… so it's not science fiction.
As the person who is in many ways directly responsible for clients' money and where it goes, would you rate 2010 ad budgets as soft? Is there a chance that this could be reviewed at the half-year stage?
There isn't one answer to this question, as the position is different between multinational advertisers and local advertisers, and even there, it varies by country and sector.
Having said that, we expect 2010 to be softer than 2009. As for when the recovery will take hold across the region, we see it happening in late 2011.
Payment delays or non-payments were what exacerbated matters for the advertising industry at the end of 2009. At this point in time, has the industry emerged from that morass?
The downturn clearly dented several key market players' ability to meet the commitments they made during happier times and this affected everyone like a game of dominoes.
Thankfully, the situation is now being resolved through negotiations and a constructive approach to industry relations.
In many respects, the downturn has been a game-changer. During the boom years, speed seemed to be everything. Every opportunity had to be capitalised on in order to secure the best deals.
It appears now that not all internal checks were applied and that when the tide turned, some organisations, largely Dubai-based, were over-exposed in many dimensions of their operations, including advertising and media.
Along with other creditors, agencies have negotiated their way out of a tricky situation, particularly as they were caught in the middle, between advertisers and media owners.
While no one expects a repeat of 2009 any time soon, have you put in place more stringent measures to ensure payment policies are honoured?
The lessons of this experience have now been learned. Every business opportunity, be it with an existing client or a prospective one, is measured more carefully today.
Excitement has given way to caution and prudence. Financial commitments are properly weighed and, if need be, covered by credit insurance.
Already a factor of commerce elsewhere, today it is becoming a fixture here, including in the advertising industry, where sums can be quite large.
Payment and credit terms are also being reviewed as a result.
Even with a downturn on, the region's blue-chip brands are seeking an international exposure that's unprecedented. Has that made your task all the more intricate? More so as ad budgets have not risen proportionately.
With most of the global economy still struggling with a recession, the region's blue-chips seeking growth beyond this region are few and far between.
Looking at forecasts, the Middle East still looks like a haven of growth. The implication for us is a sharper focus on measurability and accountability.
We have always made this our battle horse, starting with our proprietary continuous TV audience study back in 2002, now the industry standard.
We've added many more since and today, we're deploying business intelligence as the way to deliver the information and value that our clients rightfully expect from their investments in media.
There are conflicting reports about media tariffs having actually firmed up in 2010. What, in your view, is the actual situation?
It actually depends on your perspective. In 2009, media rates fell by an estimated 20 per cent across the region.
This year, we will end up with a minor rebalancing exercise with a small rise of five per cent.
We will still be a lot lower than at the peak in 2008.
It's often said that there's nothing like a downturn to start thinking of a great brand-building campaign. Do you buy that? And your clients?
During a downturn, people need reassurance, a comforting message. This human truth works in the favour of brands.
Yes, most multinational brands have followed this conventional thinking and reaped great rewards in 2009. This benefited the outdoor and print media the most.
For the time being, will there be less emphasis among agencies on network expansion?
Good times or bad, it always makes sense to look at the economics of such a decision.
That means taking calculated risks, but not losing sight of "why" this needs to be done, the "where" and "how".
The best way is to find a balance between clients' needs and assessing the dollar potential of each new market.
At OMD, we are well represented wherever our clients need us to be. We are in the three sub-regions of the Gulf, the Levant and North Africa.
Today, honestly speaking, the biggest potential is represented by the North African territory — Egypt, Algeria and Morocco.
Any chance of a major consolidation drive within your segment of the advertising industry?
Globally and regionally, our business is structured around four entities — Omnicom, WPP, Interpublic and Publicis.
Within this space, it's difficult to think of any further consolidation.
Most of the merging and fusing have already taken place.
If you ask me whether there is a possibility of consolidation plays in the wider industry, that's another story.
There are a lot of egos involved, and everyone wants to own — and hold on to — a business.
I have heard of venture capitalists coming to this region and coming across a company valued at, say, Dh100 million.
But the owners will have none of that and ask for Dh400 million.
This is a recurring theme. They seem to be in no hurry to sell… even if it's a failed business.
As things stand now, how would you rate 2010 to pan out for the ad industry? Would you be OK with that?
The forces of consolidation are still at play and size and scale will continue to be the best form of defence against any downturn.
TV will remain the undisputed leader with audiences, as long as the focus is on content.
Good content will dominate, regardless of the platform, and social media will be the echo of that content.
This is where audiences will share their views on that content.
Digital will keep on rising in significance and will increasingly drive communication investments away from some of the "traditional" media.
Brands want an interaction with consumers and digital media platforms are the best at developing engagement.
This will see our role change, the metrics of our work evolve and, along with this, the rise of new remuneration models.
As we move away from media we buy to media we "earn", we will see our approach increasingly rooted in data and business intelligence.
Through this, we will be able to advise our clients not only what half of their budget is not working, if John Wannaker's famous quote is to be believed, but also what they need to do for it not to be wasted.
We see the downturn as the accelerator of these changes, making them more urgent and inevitable. With this in mind, I'd even say the downturn was a good thing.
Some say you are in a position to throw your weight around and that you do. What do you say to that?
If it derives good for my clients, I can live with that.
At Omnicom, it is our mission to use leverage of the group to provide value to the client.
That's all I am doing. I am not after universal approval.
I am a bottom-line person. If this works for my client, it's good enough for me.
