DUBAI , UNITED ARAB EMIRATES , FEB 7 – 2018 :- Elie Khourie , CEO of Omnicom Media Group after the interview at his office in Dubai Media City in Dubai.  (Pawan Singh / The National) For Business. Story by Sarah Townsend
Elie Khouri, CEO of Omnicom Media Group Mena, expects advertising spending to rise in 2018. Pawan Singh / The National

The Big Interview: Looking up – Elie Khouri, chief executive of Omnicom Media Group Middle East



The region’s advertising industry has bottomed out and there is cause for optimism after a dark few years, according to Elie Khouri, the chief executive of Omnicom Media Group Middle East and North Africa (Mena).

In an interview with The National at his office in Dubai, surrounded by brightly-coloured and quirky works of art befitting a stalwart of the Middle East's creative industry, Mr Khouri says it is high time the industry had some more uplifting news.

“The market has declined by 35 per cent in the three years since 2015, but I think it’s bottomed out and we’ll start to see movement from here. We’re looking up this year,” he says.

Omnicom Media Group Mena – the regional division of one of the world’s biggest advertising and communications holdings, US-based Omnicom Group (NYSE: OMC) – expects to see low single-digit growth in 2018, rising to double-digit growth thereafter, following industry-wide declines since 2015 due to low oil prices, a sluggish world economy and structural shifts brought about by emerging digital technologies, the chief executive adds.

He points to a series of growth drivers for 2018, including rising oil prices, a weakening dollar (“which is amazing for this part of the world with its dollar-pegged currencies”), a resurgent global economy and generally buoyant stock markets, as well as reforms in Saudi Arabia, the region’s biggest economy.

“All of these things will counteract the impact of VAT in the GCC – which is a small thing compared to these positive things. So my message is one of optimism,” Mr Khouri declares.

Unfortunately his optimism isn’t widely shared by the industry. Zenith Media, a ROI (return on investment) agency that is part of Publicis Group, forecast an 18.6 per cent drop in Mena advertising spending in 2017, a 6.3 per cent decline in 2018, and a further 0.7 per cent fall in 2019. While the drop is forecast to get progressively shallower, an uptick in spending remains a distant prospect.

“The drop in oil prices in 2014 has had a severe effect on the economies in Mena, and has prompted advertisers to cut back their budgets in anticipation of lower consumer demand. Political turmoil and conflict have worsened, further shaking advertisers’ confidence in the region,” Zenith said in its report last June.

Lebanese-French Mr Khouri has been an influential frontrunner in the Middle East’s media industry since being appointed regional managing director of OMG in 2007. Prior to that, he consolidated Omnicom’s three media divisions in the region to form Optimum Media Direction (OMD) in 2002. He previously worked at advertising agency BBDO in Beirut, Cyprus and Dubai.

Omnicom Media Group Mena has 700 staff across 16 markets and 24 offices in the region, and comprises communications agency OMD; media agency PHD; Hearts & Science, a data-driven marketing agency, and Resolution, which focuses predominantly on paid social media marketing.

Mr Khouri declines to discuss the companies’ individual performances, saying “he does not wish to create jealousy between my little sons”. Recent contract wins include Dubai-based telco du by Hearts & Science, and Savola Foods by OMD Egypt.

Mr Khouri admits the past three years have been challenging for his business, but says it still managed to grow both its market share (because the overall market shrank), and its workforce. As the industry buckled under economic pressure, Omnicom Media Group Mena took steps to rationalise its costs, most significantly ‘offshoring’ some of its operations in Lebanon, where talent is known to be cheaper.

Beirut is historically the capital of the region’s advertising sector, with a large pool of graduates in advertising, graphic design, digital marketing and audiovisual disciplines. The media sector employs around 4.5 per cent of the Lebanon’s labour force, according to figures from the Lebanese government.

Omnicom Media Group Mena has hired around 50 staff in Beirut since the beginning of last year, in social media, content development and programmatic roles, Mr Khouri says, adding that Lebanon now functions as a “back office” to the main operations in Dubai Media City.

“This didn’t mean downsizing our headquarters, but looking at potential new hires and certain capabilities that are easier to find in other places, then recruiting in those places. It did not affect our staff count in markets we already operated,” he says.

The measure was intended to shave the group’s payroll costs by 8 per cent, but Mr Khouri says it exceeded this target, delivering savings of around 10 per cent.

_________________

Read More:

Beirut beckons as Omnicom Media Group moves some jobs out of Dubai

Elie Khouri: Successful brand in his own right

_________________

The group is further targeting investments to help it adapt to a global advertising industry increasingly dominated by digital. While overall spend on advertising has been shrinking both globally and regionally, when broken down by medium, digital is witnessing substantial growth and has now overtaken television, print and outdoor as the largest advertising market worldwide.

Digital advertising spend in Mena is expected to grow threefold from $2.4 billion in 2015 to $6.5 billion in 2020, according to a 2016 study from eMarketer, suggesting significant untapped potential. Digital will account for 50 per cent of the region’s total advertising market by 2020 – it is now around 40 per cent, according to Mr Khouri – and between 30-35 per cent of industry investments are digital.

“Digital’s market share is growing within the total investment buy, and as a company we constitute the same ratios. The industry is evolving quickly,” Mr Khouri says. “Print, unfortunately, has been unjustifiably compromised by clients and sometimes agencies – it accounts for less than 10 per cent of our business, though I still believe it is effective in certain ways.”

The three main areas Omnicom Media Group Mena is investing in are data analytics – including technology, software and infrastructure, plus data acquisition through data-sharing partnerships with clients and other third parties; content – to ensure the right content is created according to the medium for which it is intended; and programmatic trading – automated media buying that uses algorithms to buy and sell advertising space in real time, to a targeted set of consumers at the optimum time.

“The industry is moving towards a consulting rather than trading model. It’s no longer just about buying [advertising space] as cheaply as possible. It’s about how do we reach consumers and convert them to loyal customers, to the people who are actually buying the products,” Mr Khouri explains.

“Clients want hardcore results – it’s much more performance-led. They are not interested in buying cheap media, they want to know how many hotel rooms have been booked through the things we’re doing for them, how many cars have been sold.”

Around half of the digital investments overseen by the group are made through programmatic trading and this is expected to rise to 100 per cent in future, he adds. So Omnicom Media Group Mena is “constantly” making new hires in this space and in digital more broadly, bringing in data analysts, data architects, software developers and coders from as far afield as the US, Canada, Scandinavia and Europe. “There are lots of skillsets we don’t have in this part of the world,” the chief executive says.

Mr Khouri plans to expand the group’s operations in North Africa this year, in particular Morocco, Algeria, Tunisia and Egypt, and says he is “very bullish about Saudi Arabia”, as multinationals, telecoms and government departments in the kingdom increase spend on advertising and communications campaigns in line with national economic diversification efforts. “We’re pitching, we’ve won some [contracts] and there will be many more.”

There have been many transformational changes in the advertising industry, but Mr Khouri hopes he has steered Omnicom Media Group Mena to take a bite of any uptick following the choppy years of late.

COMPANY PROFILE

Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

SPECS

Engine: 4.0-litre twin-turbo V8
Power: 750hp at 7,500rpm
Torque: 800Nm at 5,500rpm
Transmission: 7 Speed dual-clutch auto
Top speed: 332kph
Fuel consumption: 12.2L/100km
On sale: Year end
Price: From Dh1,430,000 (coupe); From Dh1,566,000 (Spider)

COMPANY PROFILE

Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends

From Europe to the Middle East, economic success brings wealth - and lifestyle diseases

A rise in obesity figures and the need for more public spending is a familiar trend in the developing world as western lifestyles are adopted.

One in five deaths around the world is now caused by bad diet, with obesity the fastest growing global risk. A high body mass index is also the top cause of metabolic diseases relating to death and disability in Kuwait, Qatar and Oman – and second on the list in Bahrain.

In Britain, heart disease, lung cancer and Alzheimer’s remain among the leading causes of death, and people there are spending more time suffering from health problems.

The UK is expected to spend $421.4 billion on healthcare by 2040, up from $239.3 billion in 2014.

And development assistance for health is talking about the financial aid given to governments to support social, environmental development of developing countries.

Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal

Rating: 2/5

Charlotte Gainsbourg

Rest

(Because Music)

The specs

Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)

Company profile

Name: Cashew
Started: 2020
Founders: Ibtissam Ouassif and Ammar Afif
Based: Dubai, UAE
Industry: FinTech
Funding size: $10m
Investors: Mashreq, others

Movie: Saheb, Biwi aur Gangster 3

Producer: JAR Films

Director: Tigmanshu Dhulia

Cast: Sanjay Dutt, Jimmy Sheirgill, Mahie Gill, Chitrangda Singh, Kabir Bedi

Rating: 3 star

Rock in a Hard Place: Music and Mayhem in the Middle East
Orlando Crowcroft
Zed Books

Anxiety and work stress major factors

Anxiety, work stress and social isolation are all factors in the recogised rise in mental health problems.

A study UAE Ministry of Health researchers published in the summer also cited struggles with weight and illnesses as major contributors.

Its authors analysed a dozen separate UAE studies between 2007 and 2017. Prevalence was often higher in university students, women and in people on low incomes.

One showed 28 per cent of female students at a Dubai university reported symptoms linked to depression. Another in Al Ain found 22.2 per cent of students had depressive symptoms - five times the global average.

It said the country has made strides to address mental health problems but said: “Our review highlights the overall prevalence of depressive symptoms and depression, which may long have been overlooked."

Prof Samir Al Adawi, of the department of behavioural medicine at Sultan Qaboos University in Oman, who was not involved in the study but is a recognised expert in the Gulf, said how mental health is discussed varies significantly between cultures and nationalities.

“The problem we have in the Gulf is the cross-cultural differences and how people articulate emotional distress," said Prof Al Adawi. 

“Someone will say that I have physical complaints rather than emotional complaints. This is the major problem with any discussion around depression."

Daniel Bardsley

Director: Nag Ashwin

Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana

Rating: ★★★★

Company Profile

Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000

The biog

Place of birth: Kalba

Family: Mother of eight children and has 10 grandchildren

Favourite traditional dish: Al Harees, a slow cooked porridge-like dish made from boiled cracked or coarsely ground wheat mixed with meat or chicken

Favourite book: My early life by Sheikh Dr Sultan bin Muhammad Al Qasimi, the Ruler of Sharjah

Favourite quote: By Sheikh Zayed, the UAE's Founding Father, “Those who have no past will have no present or future.”