ELIE KHOURI’S 2018 PREDICTIONS
OMG’S CEO SEES DIGITAL DUOS, DISRUPTION AND DATA SHAPING THE NEXT YEAR.
So, did I catch you off-guard? Every year, I share my predictions with Campaign using the year as a marker for the number of upcoming themes. Given the period of unprecedented disturbance we’ve been facing, I thought it was time to revisit things. Looking back at last year’s list, there was one prediction I vastly underestimated and that was the severity of cuts in advertising investments in the region. I projected a 10 per cent drop in 2017, and it will end up closer to 20 per cent. So, this year, I’ll only make 12 predictions for two reasons; first, because that’s all we can afford, and second, you’ll have less content to contend with!
Joking aside, there is more to this than disruption or cyclical trends. It’s been a double-whammy of both at the same time. The first blow comes from the ongoing wars in the region, the low oil prices, new taxation and the reduction of subsidies across the GCC. There is also the impact of Saudisation, with the kingdom losing some 2 million people in the last two years, and the 50 per cent currency devaluation in Egypt. This led to either a stagnation or a drop in sales, and some clients overreacted with severe and, in some cases, unjustified budget cuts. Consequently, the MENA market has shed some 35 per cent of total media investments since 2015. We’ve gone from $5.5 billion to a projected $3.6 billion by the end of 2017.
The second trend is more transformative, caused by changing consumer habits and advancements in technology. First, the Facebook/Google duo continues to dominate the market and put publishers under added strain, resulting in layoffs and an ongoing struggle to pivot. Secondly, consultancies are encroaching on our business so we must transform quickly and purposefully, adding greater value to our clients with our strategic thinking. Thirdly, as we access more useful data and consumers become increasingly attentionpoor, we need to revisit traditional planning approaches. Moving from targeting masses to targeting individuals at scale, it’s less about just media performance and more about delivering long-term business value.
For 2018, I want to reset the dial and move away from the clichéd buzzwords that have dominated the last few years (AI, AR, VR, IoT) and focus instead on what will affect us here in MENA.
1.We will bottom out
Naysayers may actually be proved wrong and in 2018 we should see investments stabilise, rather than drop further. While some advertisers may offset the introduction of VAT with a 5 per cent cut in advertising budgets, the majority have realised the risks or even damage that restricted budgets can create in terms of brand performance. Economic activity indicators, like the purchasing managers indexes (PMIs), are following a positive trend. The hugely significant Saudi market shows very promising signs, including an expansionary budget for 2018 and bigger public-sector marketing investments. The lifting of the driving ban for women next June will not only see females becoming more mobile but, together with plans to facilitate their economic participation, will also lead to a boost in consumption. The Saudi and Egyptian presence in the FIFA World Cup in Russia will certainly increase advertising investments as well.
2. The Saudi powerhouse will restart
There is a renewed energy in the kingdom, with the impetus for change and transformation firmly set in people’s minds, particularly among the youth. The momentum from Vision 2030 is affecting many aspects of society (for example, improving the nation’s health through exercise) and sectors of the economy (such as the creation of the NEOM megacity). Coupled with the promise of increased government spending in 2018, the mood in the kingdom is turning positive. As the market opens up to international investors and its industrial fabric is remodelled, the opportunity to capitalise on this shift, by having and nurturing the best talent in this crucial market, is stronger than ever.
3. Egypt’s gift to the GCC
Egypt has been struggling for the past few years and its currency devaluation in late 2016 has compounded these problems. The recent indirect nationalisation of media outlets, the closure of research companies and the banning of hundreds of sites don’t bode well for press or business freedom. This is clearly a concern for the incredible tech and media talent in the country, who are now looking at emigration as a serious option. The GCC countries stand to gain from this brain-drain, as they pin their future on technology and communications.