Failure to adapt caused Saatchi split

The former chief of Saatchi & Saatchi's Beirut office ended his company's 18-year relationship with the global network late last year because it did not adapt quickly enough to a fragmenting media marketplace.

Eli Khoury, the chairman and chief executive of the Quantum Group, says the media scene has transformed enormously.

The former chief of Saatchi & Saatchi's Beirut office ended his company's 18-year relationship with the global network late last year because he says it did not adapt quickly enough to a fragmenting media marketplace. Eli Khoury, the chairman and chief executive of the Quantum Group, which is in the process of buying the remaining 25 per cent stake in the advertising agency it formerly co-owned with Saatchi, said the global economic downturn highlighted long-festering problems and made him decide to break away.

"The media scene has transformed itself enormously and, frankly speaking, the big networks have not caught up with it yet," he said. "Yeah, they can come and give you a speech and say 'we'll [hire] one kid and give you digital', but that's not what the story is about. Today, the media audience can view what they want, when they want, and the big networks are not addressing that properly." Simon Francis, the chief executive of Saatchi for Europe, Middle East and Africa, and Mr Khoury announced the split in December.

Last month, Mr Francis confirmed that Saatchi planned to open its own, wholly owned office in Beirut during the first quarter of this year, despite the resignation of Elias Ashkar, the regional chief executive for Middle East and North Africa. Saatchi has since declined to comment on its plans for the Levant office. Mr Khoury said the limitations placed on agencies owned by large networks tightened during the global financial crisis last year.

"It added salt to the wound," he said. "Your clients are not going to sit there and watch you spend money, almost endlessly, with little results. I'm not saying clients don't want to spend money, they do, but they really want to know it's worthwhile." Mr Khoury disagreed with Saatchi's plans to open offices throughout the region in the middle of an economic crisis. Mr Ashkar said last year Saatchi planned to expand into Damascus, Amman, Baghdad, Abu Dhabi, Qatar and Bahrain.

"You don't need to be all over the place, catering for any client in any market," Mr Khoury said. The best course of action is to serve the region from Beirut, which he believes will re-emerge as the centre of the region's advertising industry because it has the best market for talent. "A few years ago, it would have made a lot of sense if my headquarters were in the Gulf, but I didn't move," he said.

"Not because I don't like the Gulf or I don't believe that the Gulf is going to be a good market. No. It's just that I know where the talent is. The talent is on the streets and in the universities. You can't import talent like goods." Mr Khoury began his professional life in the US as a cartoonist and film artist, and returned to Lebanon to enter the advertising business in 1990. In 1992, he became the chief creative officer of Saatchi & Saatchi Levant and in 2000 bought a controlling stake in the company through his holding company, Quantum Group.

Negotiations on a price for the remaining 25 per cent are continuing and the name of the new agency will be released later this month. It has kept the bulk of its clients, including the regional account of Zain, he said. "Nothing has changed in the agency. We have just taken the name off." @Email:[e-mail]