By Sean Cronin
The slowdown in the advertising industry
has led one of the region’s biggest agencies to transfer some staff from
Dubai to Beirut to trim costs. Omnicom Media Group is shifting
staff from its Dubai Media City regional headquarters to Beirut as big
brands slash marketing budgets and corporates across the region cut back
on spending.
The agency, whose clients include McDonald’s, hopes
to save as much as 8 per cent on its payroll costs when between 20 and
30 positions are initially transferred to Beirut next year. More are
expected to follow in 2018.
“We
have to adapt to the changing dynamics of our industry,” said Elie
Khouri, the regional chief executive of Omnicom Media Group, in an
interview in Dubai.
“Now you can be in a remote place and do a
lot of things in our business. Of course you have to have the centre
team that are client-facing, but you can do a lot of the back office
work in other places. We were looking at India in certain aspects before
and now we are looking at Beirut to do some of the things we do in
Dubai to save costs.”
Mr
Khouri expects the offshoring of jobs to lower-cost destinations to
become a theme across a number of industries in the year ahead.
Global
advertising agencies are responding to a slowdown in spending by
clients as rapidly changing media consumption coupled with economic and
political uncertainty in many of the world’s biggest markets leads to an
upheaval in the industry.
An increased focus on data and
analytics is also allowing agencies to hire in countries where those
skills are to be found, such as the Indian subcontinent.
Beirut,
historically the capital of the region’s advertising sector, is a
natural choice for agencies seeking lower-cost offshore alternatives to
Dubai.
It has a large pool of graduates in advertising, graphic
design, digital marketing and audiovisual disciplines, with media
companies providing 2 per cent of total employment in Lebanon, according
to a 2014 BankMed report.
About 20,000 people work in Dubai
Media City, which has about 2,000 local and international media
companies. It also possesses the third-highest office rents in the city,
according to the latest data from Cluttons, with quoting rents of up to
Dh225 per square foot per year.
David
Godchaux, the Dubai-based chief executive of Core Savills, said there
was strong tenant demand in Media City from existing occupiers looking
to expand but limited available office stock to allow companies to scale
up.
“Prime office rents in Beirut are unsurprisingly much lower
than Dubai Media City, with typical rents ranging between Dh100 to Dh120
per sq ft per annum,” he said. “Although these figures may seem
attractive, quality of the talent pool, regional instability and a
migration influx faced by Beirut over recent years may deter a few
players.”
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