Sitting in his office in Sursock tower with a jersey of Barcelona club footballer Lionel Messi hanging on the wall, Hani Haddad, founder and Chief Executive Officer of Spirit, does not seem too concerned about the impact of Lebanon’s political instability on the advertising industry, but “by the time you go to print, things could change.” Established in Beirut in 2004, Spirit is a boutique advertising company providing custom made services to its clients in the Middle East and North Africa region in ways that “supermarket agencies”, as Haddad calls the large multinational advertising agencies, cannot. Unlike these agencies, “we do not copy and paste templates from abroad that can’t be applicable in our region,” adds Haddad.
Structured for success
With more than 20 years of experience in the advertising industry in the Middle East — during which he founded advertising agency Triple H that was later sold off to Beirut-based Intermarkets, a subsidiary of global advertising agency WPP — Haddad felt there was a gap in the market for tailored services and he founded Spirit to fill that gap. For instance, Haddad highlights the recent TV ad campaign done for Skinnet, and the corporate event done for the launching of BMW’s six series in Zaitunay Bay, as examples of tailored services. Haddad refused to divulge his price structures to Executive but claims he charges “a little bit less” than multinational agencies. Spirit’s portfolio of clients now includes accounts such as Rotana Hotels and Al Ahli Bank as well as BMW and Renault in Lebanon.
With a total of 36 employees, after having made layoffs in its second office in Dubai two years ago, Spirit is made up of four entities: Spirit ME (the ‘ideas provider’), Spirit media (media planning and buying arm), Spirit PR (public relations) and Spirit digital (online advertising).
Total revenues for the group stood at $22 million last year, up from $18.5 million in 2010 and $16.5 million in 2009. “This year is still promising despite what is happening politically and economically [in Lebanon],” adds Haddad. Whereas real advertising expenditure in Lebanon dropped by just more than three percent last year to stand at $174 million according to research firm IPSOS-STAT, Spirit’s revenues from Lebanon, its largest market, grew by 20 percent, up from 18 percent in 2010 and 15 percent in 2009. The second largest market, the United Arab Emirates, did not witness such solid figures as Spirit recorded five percent growth rate last year, up from 3 percent in 2010 and zero in 2009 due to the financial crisis that shook the emirates. Haddad expects that this year growth in their UAE market will be in line with other Middle East markets.
Ads of the future
In Lebanon, the vast majority of expenditures go to television, as this media avenue netted $38 million of the $174 million total expenditures last year, but Haddad believes television is losing its importance. He jokes that “unless Barcelona or Liverpool football clubs are playing a match, people won’t watch TV.” In fact, television advertising spend, while still receiving the bulk of total advertising spend, grew by just three percent globally in the first quarter of the year according to Nielsen figures, the slowest growth after magazines among the seven media categories. In the Middle East though, as in Lebanon, television remains the avenue most widely used for advertisement purposes with TV ad spend growing by 34 percent in the Middle East and North Africa.
For the advertising space in Lebanon, his main concern is the lack of transparency. “In Dubai, there are monitored figures for prices, reaches, etc. In Lebanon, we don’t have such figures. You cannot trust anybody.”
He sees two key trends shaping up the industry in the near future. The first is for direct contact such as sending personal emails to consumers, calling them to discuss a promotion and planning events to launch a product.
The second trend, and the one where Haddad sees the most significant growth in advertising, is the shift from traditional to digital. In the UAE, Spirit’s clients are allocating a larger percentage of their advertising budgets to digital. “30 percent of their traditional budgets is digital, up from 5 to 10 percent [a few years ago] and the shift is coming to Lebanon too,” says Haddad. Online advertising witnessed the strongest growth worldwide among the seven different media categories in the first quarter of the year, up 12 percent according to Nielsen figures. Haddad is keen to direct interaction online through social media tools such as Facebook and Twitter. “Everybody now has a fan page on Facebook. You have to interact, activate and bring fans,” adds Haddad. “No brand can ignore this.”