Digital Dream

BEIRUT’S IMPORTANCE AS A DIGITAL HUB IS ON THE RISE. WHY? AND HOW CAN ITS INCREASING REGIONAL IMPORTANCE BE STRENGTHENED?

Something positive is happening in Lebanon. Over the course of the past few years Beirut has been steadily building its reputation as a digital hub, buoyed by the country’s entrepreneurial skills and innovation clusters such as Beirut Digital District. Such has been its success that there is even talk of Beirut regaining some of its regional importance, not only in terms of its people, but as a centre of digital excellence. Given the wider troubles of the country – and of the advertising and media industry as a whole – such talk can only be welcomed.

Expat talent is returning, the demand for digital marketing services is on the rise, and a liberal investment climate is contributing to an improved digital ecosystem. In the midst of all this an increasing number of agencies are concentrating their digital teams in Lebanon, refocussing on Beirut and reducing reliance on Dubai.

Fawzi Rahal, managing director of Flat6labs Beirut, a regional start-up accelerator, believes at least half of the digital agencies based in Dubai have their production teams in Beirut, while the bigger networks are beefing up their digital operations in Lebanon. Why?

Cost is one reason. Compared with cities across the Gulf, Beirut is cheaper not only in terms of salaries, but in terms of overall operational expense. A fact that has only been accentuated by the region’s recent economic downturn.

“The financial recession has put pressure on marketing and content companies to optimise cost,” says Rahal. “On average, operational overheads in Dubai are two times that of Beirut. With that in mind, it makes financial sense to shift focus to Lebanon as a primary production and talent market in order to reduce operational cost and consolidate regional production teams in Beirut. This could lead to an increasingly irreversible move that could potentially tip the balance to Beirut’s advantage; this does not mean that an exodus of agencies and brands from Dubai is about to take place – the

agencies and marketers paying the bills will remain Dubai-based, but it will create a much more competitive market, with entities that have a Beirut office being able to offer comparable quality at lower rates.” Wunderman Thompson’s digital agency Mirum is headquartered in Beirut, and

On average, operational overheads in Dubai are two times that of Beirut. With that in mind, it makes financial sense to shift focus to Lebanon as a primary production and talent market. Fawzi Rahal, managing director of Flat6labs Beirut

although Impact BBDO’S main digital hub remains in Dubai, it is expanding its Beirut team to service both the network and increasing demand in Lebanon.

“We started developing the team more than a year ago but we are now growing at an exponential rate considering the increased demand,” says Emile Tabanji, Impact BBDO’S managing director for Lebanon and the agency’s chief operating officer for Egypt. “The Beirut team’s main focus will be on digital and motion design, data analytics, and content production, while other disciplines will be more Dubai led.”

Impact BBDO is far from alone. Publicis Media has located its centre of excellence in Beirut, while the decision to base Omnicom Media Group’s (OMG) Core in Lebanon was taken a couple of years ago. The latter unit supports OMG’S agencies across the region with technical and administrative services, with the decision to set Core in Lebanon largely based on the availability of talent, not cost.

“In our case, it’s not a relocation to a lowcost environment,” says Elda Choucair, chief operating officer at OMG MENA. “If it had been, we would have gone to other places. The choice of Beirut is a conscious decision to capitalise on local talent and the efficiency that we can derive from our set-up. We are not stopping there, and we are expanding this approach beyond Lebanon. We already have teams in Egypt and India serving our agencies in MENA. Our focus is not limited to just digital marketing, as our Beirut operation already demonstrates, and it’s certainly not a case of Dubai versus any other place. It’s not a replacement, it’s an evolution. We never had the intention to create just a digital hub but a new efficient and agile structure to take us into the future.”

The importance of talent cannot be understated. It’s almost a cliche now, but the country’s trilingual students form a national reservoir of talent, many of whom excel in the digital world. Even before the latest boom in the digital ecosystem Beirut was viewed as a production hub for the media and content business, but what alters the narrative today is that reservoir’s relative affordability.

“An array of markets have extended their teams to Beirut after recognising its talent’s capabilities,” says Amer Fouladgar, regional associate director at Publicis Media GDD (Global Distributed

Delivery) Hub. “Cutting costs and creating efficiencies as well as consolidating clients’ international performance marketing activity in one location is crucial, but the calibre of talent in Lebanon is the governing factor for the expansion. This is also a double-edged sword as the biggest challenge is retaining such key talent from moving to economically advanced markets offering a better quality of life. Therefore, economic and political stability is vital for Beirut to reach its full potential of being one of the biggest hubs serving the globe.” None of this should be viewed in isolation, of course. Beirut has an impressive array of start-ups, entrepreneurs, accelerators, incubators and venture capitalists, in addition to numerous co-working spaces. All of which contribute to the country’s digital ecosystem. The Lebanese government is also actively working towards building a successful tech scene, says Stephanie Abi Abdallah, programs director at Beirut Digital District (BDD). As far back as 2014, Banque du Liban launched Circular 331, a $400 million initiative designed to

We are now growing our digital force at an exponential rate considering the increased demand. Emile Tabanji, Impact BBDO’S managing director for Lebanon and CEO for Egypt The choice of Beirut is a conscious decision to capitalise on local talent and the efficiency that we can derive from our set-up. Elda Choucair, chief operating officer at OMG MENA