13 April 2009
While the downturn seems not to have hit its bottom yet, business still goes on with a momentum, suggesting what has been well known from real crisis experience among most media experts: Investing at such times turns out a winning strategy around the corner of the next rise.
Although this all has to wait the test of time, Zed Communications that has just launched its PR discipline speaks of high ambitions. Having recently won the Bizz Award 2009 for Business Management Excellence, Zed's Managing Director Robert Mitchell spoke of future plans for the agency and the public relations sector in the region.
The company started as a brand design agency but has now grown to offer different communications services from PR to retail and exhibition design.
The firm has grown 50 per cent last year and sees the same percentage of growth this year too.
Why did you decide to launch your PR discipline during such time?
We have been toying with the idea of adding PR to our offering and I must admit I was sceptical. But I realised that, particularly in Mena [Middle East and North Africa], the PR agencies were actually competing on our turf. Now more than ever, if you have limited media funds for your brand, you need better creativity and you to need maximise your media exposure with more ROI. PR can be a very effective tool, especially when it is totally in line with our integrated through the line approach. For Zed it always comes back to the same methodology how best to integrate all the disciplines in a 360-degree approach. On top of that, the demand for PR is growing, particularly crisis PR; it is not all good news at the moment and that is something that is perhaps new to this region. We want to offer our clients a one-stop shop, in [both] good and bad times.
You say about becoming a 360-degree agency. This is not a new concept in the region. Why do you think it has not picked up among regional agencies yet?
The 360-degree is not new, yet nobody seems to be implementing it. There are a few agencies beginning to do that. Let us face it. Almost 85 per cent of the agencies worldwide are owned by a quartet or holding companies. Most of the Mena agencies started as much smaller agencies often franchises of global ad companies. They have seen exponential growth at a rate of 20 or 25 per cent a year, thus growing their business from 30 staff to 300 or 400. If you're a holding company executive sitting in New York, London or Paris and you see your Mena operation growing at 20 per cent a year, when your European or US operations are struggling to grow at five per cent, that looks pretty good. Why would you want to change anything? I think what has happened with those companies is that they missed to see change in the way consumers use media. Agencies of 300 or 400 people require a substantial structural change. The challenge as an agency grows from the base up - as is happening in this region - is to be able to retain the culture of a small agency where people can focus on the clients' business but still continue to expand in size.
More developed markets such as the US, Europe and Japan have been through crises before, probably not the same scale, but they were in there and they have taken the initiatives to restructure their agencies.
By focusing on clients, I mean all we require is a good idea that could be implemented in any kind of media.
How can that be made possible?
I have done it before in Europe with other agencies and the best way is to split things out. Many big agencies in this region are still structured departmentally you will have the TV department and the web department, ATL and BTL divisions. And you will find that often those departments do not interact - everyone builds their little departmental hierarchy. You may have an agency with 400 people which you may split it into separate business units where each of those units actually runs completely through the line. For us it is pretty one line and it is completely vertical through the line.
You have spoken of 85 per cent of the world's agencies being owned by four holding agencies and all of them are based either in the US or Europe. Does the region have a potential for growing an international agency, based in the Arab World?
I think we are an international agency and Dubai is an international city. We are here. We work in different languages and as we grow we are looking into establishing offices in the region. This year will see us into Qatar, Oman and Abu Dhabi. Next year we are looking at other bigger markets in the region. And at the end, who knows we might start thinking of moving to other places outside the region.
Look at what is happening in the media landscape. When I switch on my cable TV in Europe, I get one channel of CNN , two of BBC, and three of Al Jazeera. Why not take that model and expand it into an advertising network?
I think there is a huge opportunity for a Middle East- based company to have its roots in the region and branch out to the rest of the world. There has not been any major group in the Middle East that has done it yet.
Why not?
Traditionally this market has been a lot about adapting international work. Right now, there is a base of experienced people, creative standards are getting better, budgets are getting bigger. Therefore I believe this is the time to make it happen. And for global brands, Dubai is an ideal place to be. I have worked a lot in global business running it from London or New York or Frankfurt and in the end what's important is to be in the right place with the right people and I think Dubai brings exactly that. It is the cross road of East and West. It is two hours flight away for millions of people and it is a cultural melting pot an ideal place to run a global brand from. Dubai depicts a better understanding of the cultures in the Middle East and Asia. It has residents from all parts of the world. You can really mange a global brand very well from this place. That is the future Dubai is about, creating your work here, and this is absolutely part of our long term strategy.
What are the challenges facing your Zed Communications especially with the launch of your PR discipline?
It would be wrong to say we had a great foresight, but we have been fortunate that very little of our revenue was directly related either to real estate or to media income. The ones who got hit the hardest were media agencies selling overpriced ads and outdoor, trying to hype up some very mediocre real estate offerings. For us, our planning is long term. We are about building long-term and sustainable brand value for our clients. Even if the client brief is to generate sales revenue now, we always see how part of the effort is about how to build brand value over time.
Profile: Robert Mitchell Managing Director, Zed Communications
Mitchell was educated in Cambridge and London. He joined Saatchi & Saatchi as a young Art Director in 1984.
He has had a multi-awarded career as a creative director, working internationally in Europe, the US and Asia. Mitchell joined Zed in July 2007 as Managing Director, after the company was bought by Zabeel Investments.
While the downturn seems not to have hit its bottom yet, business still goes on with a momentum, suggesting what has been well known from real crisis experience among most media experts: Investing at such times turns out a winning strategy around the corner of the next rise.
Although this all has to wait the test of time, Zed Communications that has just launched its PR discipline speaks of high ambitions. Having recently won the Bizz Award 2009 for Business Management Excellence, Zed's Managing Director Robert Mitchell spoke of future plans for the agency and the public relations sector in the region.
The company started as a brand design agency but has now grown to offer different communications services from PR to retail and exhibition design.
The firm has grown 50 per cent last year and sees the same percentage of growth this year too.
Why did you decide to launch your PR discipline during such time?
We have been toying with the idea of adding PR to our offering and I must admit I was sceptical. But I realised that, particularly in Mena [Middle East and North Africa], the PR agencies were actually competing on our turf. Now more than ever, if you have limited media funds for your brand, you need better creativity and you to need maximise your media exposure with more ROI. PR can be a very effective tool, especially when it is totally in line with our integrated through the line approach. For Zed it always comes back to the same methodology how best to integrate all the disciplines in a 360-degree approach. On top of that, the demand for PR is growing, particularly crisis PR; it is not all good news at the moment and that is something that is perhaps new to this region. We want to offer our clients a one-stop shop, in [both] good and bad times.
You say about becoming a 360-degree agency. This is not a new concept in the region. Why do you think it has not picked up among regional agencies yet?
The 360-degree is not new, yet nobody seems to be implementing it. There are a few agencies beginning to do that. Let us face it. Almost 85 per cent of the agencies worldwide are owned by a quartet or holding companies. Most of the Mena agencies started as much smaller agencies often franchises of global ad companies. They have seen exponential growth at a rate of 20 or 25 per cent a year, thus growing their business from 30 staff to 300 or 400. If you're a holding company executive sitting in New York, London or Paris and you see your Mena operation growing at 20 per cent a year, when your European or US operations are struggling to grow at five per cent, that looks pretty good. Why would you want to change anything? I think what has happened with those companies is that they missed to see change in the way consumers use media. Agencies of 300 or 400 people require a substantial structural change. The challenge as an agency grows from the base up - as is happening in this region - is to be able to retain the culture of a small agency where people can focus on the clients' business but still continue to expand in size.
More developed markets such as the US, Europe and Japan have been through crises before, probably not the same scale, but they were in there and they have taken the initiatives to restructure their agencies.
By focusing on clients, I mean all we require is a good idea that could be implemented in any kind of media.
How can that be made possible?
I have done it before in Europe with other agencies and the best way is to split things out. Many big agencies in this region are still structured departmentally you will have the TV department and the web department, ATL and BTL divisions. And you will find that often those departments do not interact - everyone builds their little departmental hierarchy. You may have an agency with 400 people which you may split it into separate business units where each of those units actually runs completely through the line. For us it is pretty one line and it is completely vertical through the line.
You have spoken of 85 per cent of the world's agencies being owned by four holding agencies and all of them are based either in the US or Europe. Does the region have a potential for growing an international agency, based in the Arab World?
I think we are an international agency and Dubai is an international city. We are here. We work in different languages and as we grow we are looking into establishing offices in the region. This year will see us into Qatar, Oman and Abu Dhabi. Next year we are looking at other bigger markets in the region. And at the end, who knows we might start thinking of moving to other places outside the region.
Look at what is happening in the media landscape. When I switch on my cable TV in Europe, I get one channel of CNN , two of BBC, and three of Al Jazeera. Why not take that model and expand it into an advertising network?
I think there is a huge opportunity for a Middle East- based company to have its roots in the region and branch out to the rest of the world. There has not been any major group in the Middle East that has done it yet.
Why not?
Traditionally this market has been a lot about adapting international work. Right now, there is a base of experienced people, creative standards are getting better, budgets are getting bigger. Therefore I believe this is the time to make it happen. And for global brands, Dubai is an ideal place to be. I have worked a lot in global business running it from London or New York or Frankfurt and in the end what's important is to be in the right place with the right people and I think Dubai brings exactly that. It is the cross road of East and West. It is two hours flight away for millions of people and it is a cultural melting pot an ideal place to run a global brand from. Dubai depicts a better understanding of the cultures in the Middle East and Asia. It has residents from all parts of the world. You can really mange a global brand very well from this place. That is the future Dubai is about, creating your work here, and this is absolutely part of our long term strategy.
What are the challenges facing your Zed Communications especially with the launch of your PR discipline?
It would be wrong to say we had a great foresight, but we have been fortunate that very little of our revenue was directly related either to real estate or to media income. The ones who got hit the hardest were media agencies selling overpriced ads and outdoor, trying to hype up some very mediocre real estate offerings. For us, our planning is long term. We are about building long-term and sustainable brand value for our clients. Even if the client brief is to generate sales revenue now, we always see how part of the effort is about how to build brand value over time.
Profile: Robert Mitchell Managing Director, Zed Communications
Mitchell was educated in Cambridge and London. He joined Saatchi & Saatchi as a young Art Director in 1984.
He has had a multi-awarded career as a creative director, working internationally in Europe, the US and Asia. Mitchell joined Zed in July 2007 as Managing Director, after the company was bought by Zabeel Investments.
By Dima Hamadeh
© Emirates Business 24/7 2009
