Can we expect 2018 to be kind? Elie Khouri CEO OMG MENA shares his thoughts on the year ahead
Posted on 2018 Jan,18

As we step into 2018, Elie Khouri, chief executive of Omnicom Media Group MENA, shares his thoughts on what the next 12 months will bring and promises quite a ride.

It’s January and this is the time of the year when we recover from festive excesses, grab a bargain or two, come up with a handful of resolutions that we won’t keep and make a few bets about what the future holds. There is comfort in respecting traditions and even more in the certainty of what awaits us. When times are tough, as they have been of late for our industry, we certainly can do with some comfort. Can we expect 2018 to be kind?

Early signs aren’t too positive. If you’re in the UAE and Saudi Arabia, the year has started with the introduction of VAT. It is an ill-timed burden for businesses and consumers alike. Granted, we’ll soon get used to it, as other countries, including Lebanon, have before us. Governments certainly will need the extra income if they are to meet their ambitions and budget commitments to major projects and initiatives. The country’s reform agenda is promising though and will go a long way in making the Kingdom the regional powerhouse once again.

The same can’t be said for Egypt though, which has suffered since its currency devaluation over a year ago. The mood in our industry, following the indirect nationalisation of media outlets, the closure of research companies and the banning of hundreds of sites, is turning gloomy. The concerns are deep enough to push many professionals to emigrate.

Tensions in Iran, the rift between Qatar and its neighbours, and the continuing conflicts in Syria and Yemen do very little to inspire confidence and positivity among advertisers.

“There won’t be much comfort in doing things the way we’ve always done them.. But there is enormous value in embracing change and challenging the status quo.”

The tax reforms in the US, on the other hand, provide major brands’ owners with a boost and cash to invest. It is also a FIFA World Cup year and Russia’s time zones will help beIN Sports, the official broadcaster for the competition, garner strong audiences. The participation of Saudi Arabia, Egypt, Morocco, Tunisia and Iran will certainly contribute further to the excitement.

All in all, we expect the year to be less bad than 2017, in terms of investments, maybe to the point of stagnating. This doesn’t mean there is much cause for celebrations for most media. Digital will continue to grow and eventually overtake TV in scale. While the way the media pie gets cut will continue to favour Facebook and Google, there is also a growing reliance on programmatic as advertisers are moving budgets lower down the purchase funnel. Broadcast TV is no longer on the pedestal it once was and as media habits evolve, so do brands’ investment priorities. Other media will continue to struggle, which may lead to mergers in the sector.

Ultimately, it’s all about the ability to deliver performance and accountability. TV audience measurement is still lacking across most countries so we must welcome the Saudi Media Measurement Company’s effort to create a reliable system for advertisers to justify their investments. The same applies to digital platforms. After the controversies of 2017 around brand safety, fraud and viewability, both digital giants and the long tail will open up to more independent verification and provide more transparency. This is an essential step to maintain the high level of trust and confidence that guarantees brand investments.

The biggest threat on the horizon for the industry in general and media owners in particular is the growing disaffection with paid-for advertising. When it’s not blocked, interruptive advertising is shunned in favour of something more ‘genuine’, valuable and relevant to consumers. This is why we’re seeing a rapid growth in content marketing, particularly video and influencer marketing, and investments in data management. The accuracy and effectiveness that can be drawn from powerful data analytics is a massive incentive for brands to make the switch from a mass approach to something much more micro-targeted, personalised at scale.

As technology evolves and consumer behaviours change, established business models come under intense pressure. This means a deep transformation of the way the industry operates, what it produces and how, the monetisation of its product and the type of people it employs. Yes, there will be growing automation, yes algorithms and machine learning will take some of the load and all this will force us to be more innovative and agile to respond to rapidly evolving market conditions.

Traditions have served us well but there is also enormous value in embracing change and challenging the status quo. There won’t be much comfort in doing things the way we’ve always done them. What we must stay true to, however, is driving value for our clients, connecting brands with consumers and creating magic.