As part of Think With Google’s Perspectives series, we asked SMG MENA chairman Alex Saber to discuss the foundations of his agency’s success. Here he reveals how the evolution in consumer media habits is driving SMG investment in digital, particularly in key growth channels such as video and mobile, and through powerful ad technologies such as programmatic audience buying.
Alex Saber’s career has seen him rise from a lower level position in Leo Burnett’s media department to chairman of Starcom Media Group (SMG) and the MENA arm of its consolidated media buying unit VivaKi. Based on turnover growth, the company’s been ranked as the number-one media agency for four years running by REMCA Billing Report. In 2014 alone, SMG’s billings grew by 20%, while the following year produced 34 new business wins. Having ascended the ranks to occupy SMG’s corner C-suite office, Alex understands the media industry inside and out, and there are few people better positioned to discuss how to succeed as an agency in MENA.
Three Foundations of Success: People, Relationships, Tech
According to Alex, SMG’s competitive advantage stems from its early realization that digital marketing would be the way of the future, followed by a firm commitment to investing in resources accordingly. He points to the agency’s people as being critical to its achievements. “We allocate big budgets to training, development and research. We hire fresh graduates, invest in them and inure them to our thinking, our story and how we operate.” This approach contributes to SMG’s staff turnover rate of just 4% – which Alex reveals is the lowest in the industry.The depth of SMG’s client relationships is another source of strength. Some of the agency’s largest clients – think Procter & Gamble, Mars and Richemont – have been on board for over a decade. This longevity is more important than their calibre, Alex says. “We’re proud of our roster of clients, but we’re even prouder of how long they’ve been with us. It’s a testament to their trust in the agency, our capabilities and our deliverables.”
The final factor in SMG’s approach has been to invest in new technologies and digital capabilities. By way of example, Alex explains that Publicis Groupe (SMG’s parent company) was the first to create and launch an open-source audience on demand platform – AOD – in 2008. AOD allows the company’s clients to connect with precisely defined global audiences in a single campaign buy across multiple networks with optimized pricing. “The creation of AOD has been hugely successful for us, producing double-digit year-on-year growth since its launch,” he says.
Evolving with Consumers’ Media Consumption Habits
Consumers in the UAE now own on average three connected devices, and consumers in Saudi Arabia own an average of 2.31. Every single day, 89% of Emiratis 2 and 86% of Saudis 3 are online. Statistics like these underline the huge shifts occurring in MENA’s media landscape. According to Alex, anticipating changes in media consumption is vital. “As agencies, our challenge is stay up to speed. We have to learn, adapt and implement vis à vis what’s happening in digital, in content and in programmatic.”
When it comes to predicting the roles that the main marketing channels will play in the future, he believes that TV will continue to occupy a significant portion of brands’ advertising budgets throughout the region in 2016. “On the other hand, hardcore traditional media such as print and outdoor have been and will continue to decline.”
Digital’s share of the pie, he says, is set to increase. Taking a lead from Europe and the US, clients in the region are demanding that their media and creative agencies capitalize on digital opportunities, based on the increasing digital literacy of consumers. He explains that advertisers are drawn to the “cost effectiveness” of digital, the fact that results are “100% measureable” and the efficiency in delivering a favorable ROI.
“Consumer habits are changing, and as a result our clients’ investment in digital is significantly growing,” he says. “To cater to these developments and put ourselves ahead of the curve, we have now allocated almost 50% of our staff to digital.”
As agencies, our challenge is to stay up to speed. We have to learn, adapt and implement vis à vis what’s happening in digital, in content and in programmatic.
Digital: In It for the Long Haul
With SMG present in every MENA market, the agency’s shift to digital adds up to significant impact on the regional advertising industry as a whole. “Today we account for a large proportion of the digital market in the Middle East,” Alex reveals. Realistically, he expects this to decrease as other firms shift more of their budgets to digital, but SMG’s commitment will remain strong.
With a keen focus on the future, SMG is putting a priority on developing capabilities in key digital channels. Alex cites recent statistics and research that underlie this tactic, such as the way consumers are using their mobile devices in new ways. Google research reveals that 72% of smartphone users in the UAE, 69% in Saudi and 66% of consumers in Egypt say that the last time they found online information on their smartphone in a store about a product or service influenced the decision they were planning to make4. Online video is undergoing a meteoric rise in consumer usage across the region too, with YouTube watch time producing 88% year-on-year increases5.
Consumers turn to digital devices when they want to watch, do, find or buy something. These intent-driven moments are crucial for brands because this is where decisions and preferences are being shaped. “Based on consumer insights and market trends, we’ll continue putting more and more resources into the key growth channels,” Alex affirms. “We believe that since mobile and video enable advertisers to be where customers are increasingly spending their time, they hold significant promise for the brands that invest in them.”
Alongside investment into emerging channels, SMG and Publicis Groupe are committed to developing their digital toolkit. A number of recent partnerships and acquisitions provide evidence of this strategy in action. For example, Alex points to last year’s acquisition of Run, an ad tech firm specializing in programmatic that will operate alongside SMG’s in-house programmatic arm, AOD. Run’s technology specializes in compiling data aggregated from multiple mobile sources, including service providers – something Alex indicates he would like to see more of in MENA.
A Look at the Year to Come
“2016 represents a challenge for SMG in MENA,” Alex says. “But clients believe in us and we’re convinced that we’re in a solid position. Historically in difficult times, we’ve adapted, we’ve invested and we’ve delivered.” In preparing for the trials of the year to come, he’s thrown his lot in with digital – ramping up investment in video, mobile and programmatic – while decreasing or holding steady in more traditional media. “Times like these are when the capabilities of companies overall come to the real test: their capacity to grow during difficulty. We’re confident we’re ready to do just that.”
Perspectives is a Think With Google series where MENA’s thought leaders, influencers and industry experts share their views on the present and future of marketing, media and technology in the region.
1 Google Consumer Barometer 2015, "How many connected devices do people use?", KSA
2 The Consumer Barometer Infographic - UAE, Google 2015
3 The Consumer Barometer Infographic - KSA, Google 2015
4 Win the moments that matter, Google 2015
5 Win the moments that matter,Google 2015