Memac Ogilvy to double business in Levant, Africa

Memac Ogilvy is eyeing record growth in both profits and revenues in the region in 2010, said Edmond Moutran, Chairman and CEO, Memac Ogilvy and Mather Holding.

"Our business in the Levant and North Africa will probably double this year as compared with 2009. We have serious growth in Abu Dhabi and moderate growth in Saudi Arabia," he said.

This optimistic projection was made at a media roundtable yesterday attended by Miles Young, CEO of Ogilvy and Mather Worldwide; Daniel Sicouri, Chairman EAME, Ogilvy and Mather; and Ronald Howes, Managing Director of Memac Ogilvy UAE.

Moutran said: "On the local perspective, I am an optimist. Under the impact of the global economic crisis, advertising discipline has slightly declined. However, all the other disciplines have grown, especially Ogilvy One which has seen a good year in 2009."

Young said Ogilvy and Mather Worldwide was looking at flat revenues in 2010 versus a decline estimated at10 per cent last year, in line with global industry figures. However, he noted that not much recovery was expected from the US and Europe.

"Looking at 2010, we are expecting a record year especially driven by the growth in the Levant markets such as Syria, Jordan, Egypt and Morocco as well as Abu Dhabi," added Moutran.

Memac Ogilvy had already started operations in Abu Dhabi and has been working with clients even though the office is not officially launched yet. Moutran expects the launch to take place very soon.

The reason for the boom in the Levant markets and in Abu Dhabi, is the growing understanding of the need for advertising.

Moutran explained: "We have a great office in Damascus. Many of our clients have never advertised before, either because they did not feel the need to or did not have the money. The same is happening with Lebanon where stability has driven businesses to spend money on advertising. We have a handsome business in Jordan as well. This region is just like Dubai was five or six years ago."

However, this doesn't mean that Dubai would lose its position as a regional hub for the advertising industry, according to Ogilvy leaders.

Moutran said Dubai has reached a stage of maturity where it would no longer grow at 40 per cent and 50 per cent rates. "Instead, the local industry will be witnessing healthy growth ranging between five per cent and six per cent."

Young agreed: "There is a similar example of Hong Kong, which is much like the Dubai of Asia, a business and communications hub. Hong Kong is still one of our top ten markets."

Howes added: "Most of our clients in the region are harboured in Dubai and are seeking to advertise in different markets through their Dubai offices." Answering a question on the issue of receivables in the local market, Moutran said it was an issue that nobody seemed to want to discuss.

However, he noted that the problem was not in default but rather in seriously delayed money. He cited an example where clients took years to pay their dues long after they had signed off.

"I don't believe we will ever lose money in this market because people are honest. However, they take a painstaking time to be collected," he said.

"In the meantime, banks historically don't tend to lend to agencies because they have less assets. I ask of the banking sector to treat agencies with the same priority they give to contactors. Right now, contractors the priority." That said, Moutran disclosed the agency was in negotiation with clients from the real estate sector who are suggesting payments after five years. "We are negotiating for three years instead."

Despite that, Moutran said Memac Ogilvy has already paid the media all that they owed. Howes explained: "All agencies have faced difficulties. The reason why we were able to pay up all our obligations was that we reached a point where we knew we had to be careful not to let our delayed receivables cast its shadows outside."

In terms of growth, Young set the lines by which all the global offices and partners followed, namely focusing on growth in consulting areas and digital communications.

At the beginning of 2010, Memac Ogilvy had pointed that it would continue with "prudent investment in new offices, new service offerings and talent development as well as growing our key client portfolio mix while expanding digital competencies".

Moutran said: "We are diversifying very quickly, not only because of the money issues, but also because our clients require more expertise and we need to be more helpful in that sense."

He noted that Memac Ogilvy would be launching three new disciplines, one of them to be revealed next month. The agency had launched a new discipline in its Beirut office in July, called OgilvyAction.

A brand activation arm of Memac Ogilvy, the discipline focuses on driving sales and building brand equity based on a deeper understanding of modern consumer behaviour and the dynamics between shopper, brand and retailer.

OgilvyAction, which was already established in Dubai and Jeddah, had earlier chalked out plans to launch four other offices in the region by this year.

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.

Follow Emirates 24|7 on Google News.