Changes are afoot at Publicis Groupe Media. Communicate catches up with the top brass to find out why the management team has been given a makeover

Originally published in Communicate, November 2008

Communications group Publicis Groupe Media, the parent company of buying and planning agencies Starcom MediaVest Group and ZenithOptimedia, has recently promoted three of its top men to more senior positions. Communicate sat down with the management to discuss what the changes mean to the group, and to take the pulse of the region’s media industry in general.
Alex Saber was previously PGM MENA’s commercial director, and has been promoted to executive vice-president and chief operating officer for the group. Tarek Daouk was managing director of Starcom Dubai and has been promoted to executive vice-president of Starcom MENA. And Philip Jabbour has been promoted from group director of marketing and new business development to executive vice-president of business development for PGM MENA, and global account director.

We sat down with these three, and with Mike Readman, who has been chairman of PGM MENA for just over a year, having come to the region from London in 2007.

Why have you introduced these new positions within the company, and what do the changes mean?

Mike Readman: The new titles and the new positions reflect the way we believe the agency is going to develop. There’s going to be an increasing development of global account management needs based in Dubai.

We need some kind of network management of the SMG network that allows our six offices to operate on the same level, and so that we talk to each other more. We’re building a hub function in Dubai.

Tarek Daouk: Globally, a lot of the big advertisers are restructuring to have big hubs because it’s more cost-efficient. So the agencies have to follow.

Philip Jabbour, what responsibilities does your new job carry? I understand you are responsible for the business development plan.

Philip Jabbour: As unrelated as the two parts of my title seem, they are in fact very related. The business development functionality has to evolve, and if you look at the business development, it comes from a variety of sources.

Generally, your business grows from an existing client increasing their budget, or from getting new clients, identifying new markets and identifying new businesses. We’re trying to formulate a strategy out of Dubai – rolling it out in the local markets – to ensure that we have this consistent and aggressive growth strategy.

How important is this region to Publicis?

MR: The company – Publicis Groupe Global – is very focused on emerging markets as opposed to emerged markets. Most of its growth is going to come from developing markets. My guess is that the credit crunch has focused people’s minds on that, and top-line growth is very important.

Alex Saber: It’s definitely an important market for them – more and more in these difficult days. There will be growth in this part of the world despite everything that’s been happening. I’m sure growth will be at a slower pace now, but our region will be an important market.

Will the credit crunch hit the region?

AS: It is definitely going to be felt over here. Local business has been one of the major drivers in the past year, while international business was somehow leveling off or only showing slight increases. Now I believe that the local business will also start leveling off, and it’s going to have an effect on us. But how big will the effect be? We don’t know yet.

TD: If you look at the region here, we’re in a tricky situation. Because of the [rising] oil prices, consumer demand is increasing so, as you would expect, the economy is growing, and advertising spending should follow in parallel – but the globalization and the cost structure of all the multinationals is also putting on pressure [to cut costs].

So, on the one hand you have a growing economy, and on the other hand the multinationals, which used to be the main advertisers throughout the past 20 or 30 years, who are under cost pressure. It’s a balance between these two forces.

AS: Luckily, the effect in the last quarter of this year is going to be minimal because it is almost over, planning- and budgeting-wise. So there won’t be any major changes, with the exception of some local businesses – which can react much quicker.

The first quarter of next year is going to be a bit difficult, and will also be tight for media owners. In the past year and a half, they were really riding high. Now they are a bit more concerned, a bit more worried. I think price increases in television and print are going to be re-thought for next year. For example, if media owners were thinking of a 20 percent increase, now they are thinking of a 10 percent increase. They are re-thinking all their strategies, given all that’s happening currently.

What will changes in the global economy mean for media planning?

MR: Up to this point, people have been able to achieve growth in this part of the world because the economy is growing really fast. In the future, it is going to be more difficult to achieve that kind of profitable growth.

More and more clients will start questioning whether discount is all that drives value in their communication plan, and we’ll see increased demands for effectiveness and accountability as the economy tightens.

PJ: You talk to any advertiser and give him a choice of what he’d rather have – a cheaper media plan or a better business – and it’s a no-brainer. This has always been the case, and advertisers will become more aware and conscious of this factor.

This will mean close tracking of results, then?

PJ: Don’t forget, everything is now moving into digital. I’m not just talking about online advertising: Everything is digital from a technology perspective, which means everything is going to be reported and everything is going to be measurable. So the ROI is going to be less and less subjective and people will be held more and more accountable because you can measure what they’re doing, even if it’s from your traditional 30-second TV ad.

Both on the agency side and on the media owner’s side, people understand the changes in the scene – the fragmentation, the consumer mindset, and the growth of digital – require us to look at stuff in a different way.

TD: So, whereas we used to always discuss 30-second TVCs, and “What’s the rate and rating?” and all this discussion, now you see that a lot of the TV stations are more flexible and they are creating new opportunities with the agencies for the advertisers. You see print doing it too. So the trend is opening a lot of new ways of advertising.

Is that why PGM MENA has launched a new branded content division?

AS: Branded content is moving very slowly. Yes, there is a need for it, but I think we should have realistic expectations. It will continue to be small in this part of the world. It’s like digital: We’ve been talking about the digital era for the past five years, and if you see how far it has evolved, it’s still extremely small.

Branded content is somewhat similar; there is room for it to develop, it is an important entity and it will grow, but it has its own limitations in the market.

TD: The mindset is there now amongst media owners and agencies. Historically, the media was a little bit reluctant to open up its content to brand messaging, on one hand. On the other hand, the concept of branded content was all about, “Put this bottle over there,” and  “Put it in this program,” which was wrong. Now, the concept is more developed.

As consumers have more media channels – including digital ones – available to them, how much is media planning changing?

PJ: You look at any media plan for any brand today, and the more similar that it is to that same media plan two years ago, the more off you are from what you should be doing. Look at our daily lives and how they have changed and what you get exposed to.

PJ: It’s not like we should have to do digital and make it a tick box for every submission. It’s just another channel that has evolved and changed our lives. The way that we live today generally – beyond just media consumption – has changed.

MR: Ten years ago, the objective of campaigns wasn’t really sophisticated; everyone wanted to raise top-of-mind awareness, because there weren’t that many products in the market. Now there is massive competition in this region in all the major categories.

What we’re trying to do is present a more integrated, diverse offering to clients. Because as those clients have developed, the market has matured, the number of communication strategies that can help has multiplied. It’s not all about top-of-mind awareness, it’s about building loyalty, it’s about launching offshoots, it’s about building personal databases, it’s about various little things that raise top-of-mind awareness. So the diversified integrated offering – of which digital is one part – is extremely important and should be important to all agencies in the future.

Globally, Publicis is starting to rebrand as VivaKi. What is VivaKi, and why are they doing it?

MR: It’s PGM plus Digitas. Digitas is Publicis’s global digital creative agency. All we’re saying is we want to integrate Digitas’s functionality into PGM and rebrand PGM as VivaKi.

PJ: Now it’s under one leadership.

MR: The big change for me is that the company is being brave enough to say that in the digital arena, strategy – and therefore channel planning – comes first, and then you originate the correct content. You have consumer insight driving strategy, which in turn drives channel selection online, and then you come up with your creative ads. With the old model you have a TV ad, then you issue a communications brief.

What other changes are we going to see from SMG?

TD: Our focus is on bringing in more specialized services, each of which will bring significantly more value to the advertisers. I think this will be the future of media agencies.

MR: Diversified services but better integrated. It’s almost like a paradox, but we have to be able to do that in a one-stop-shop.

TD: When we say diversified, what we mean is we need someone on the agency side to understand that if the brand wants to achieve a certain objective, this is the kind of service that they have to use to achieve it.

Whoever provides this service needs to be someone specialized in it. So the integration is at the level where someone will decide what is good for the business objective of the brand – but it has to be someone specialized doing it. No one can be an expert in all the areas that are coming.

The biggest challenge to advertisers now is the number of agencies they deal with. Look at the brand manager: Before 1999, when the media agencies came along, he used to deal with one agency, and it would do everything. Now he has to deal with the creative agency, the media agency, the PR agency, the digital agency, the below-the-line agency. It’s impossible for marketers just to keep up with this, and it’s impossible to go back to a one-does-it-all agency.

So what’s the solution?

MR: We think that the answer is to have more integrated services under the same roof, with one conductor conducting the biggest part of the orchestra – which is the communications part of it. So the more that we can bring under this roof and orchestrate under one business channel planner, the better we think it will work for the client.

TD: At the same time, we’re working in partnership with these agencies – with the creative agencies, with the PR agencies. Finding the right model of working together is more critical now than before because of the number of agencies involved.