Farid Chehab is the co-founder and current chairman of Leo Burnett in the Middle East and North Africa, as well as the firm’s chief coordinating officer for Central and Eastern Europe. With almost 40 years in the communications industry, Chehab is widely regarded as a creative guru. Last year, Leo Burnett Central and Eastern Europe became the most awarded agency at the Golden Drum advertising festival. Chehab recently sat down for a chat with Executive to offer up his in-depth knowledge of the industry and which way it is headed.
E Your firm has won a lot of awards lately. What has your strategy been in order to achieve this?
We don’t have a consistent strategy. We always won awards in the past. What happened at one point is that some agencies adopted an award-winning strategy; agencies started creating ads specifically to win awards, scam ads. For two years this hurt us a lot. We were not willing to play this game and we used to enter without a strategy as we always do.
The way the others entered and diversified the ads between print and outdoor resulted in around two years where we were sheltered from the scene. I heard people say: “What is happening with Leo Burnett? They are not winning awards anymore.” Fortunately this joke stopped because recently there was a hoo-ha against scam [ads]. This is evident by the fact that most of our ads that won at Lynx [Dubai’s international advertising festival] won all over the world and positioned us as agency of the year in ‘new Europe’. We are just making ads… we do not make them to win, we just make good ads and good ads should win. I know that one agency spent $1 million to create scam ads to win. We never do that. We don’t have a budget to create scam [ads] because money is very scarce.
E What is the reasoning behind creating scam ads at agencies then?
They think that when they want to pitch to a client, they claim that they were the number one agency at Lynx and so on. This can impress some clients and it does.
E So it’s not a bad strategy per say?
It’s a very bad strategy because you cannot sustain it unless you want to cheat the client. If the strategy is about creating scam ads, going to the client, telling them that is what you deliver, working with the client, and not being able to deliver because you cannot sustain the effort it takes to create a scam all the time, is a very short-term strategy.
E A year has passed since the beginning of the downturn. How has it affected your strategy, particularly on the creative side?
Honestly, in the beginning of the year it did affect us because we had a lot of real estate accounts that we lost. There were two ways to go. Either we could be defensive and scale down or look at things from a better angle and try to gain more business. This year was a year of fantastic opportunities. We didn’t want to fire anybody and we wanted to keep our teams intact because we have invested a lot in them and we didn’t want to lose them. We [pursued] a very thorough strategy of pitching and we won a lot of pitches. At the end of the day, we won more work than we lost and we are going to have a positive year in 2009.
E So how did you differentiate your pitches in light of what had happened, knowing that clients had smaller budgets?
Prior to the crisis we had enough people to handle enough work and when we knew we were going to get more work we started bringing people in. In 2009, because we had some losses we had to free people. Some of the energy of the company was free to go into pitch ventures. We decided that there is no way that we could not use their time to try to get business. Anything that was pitchable, we pitched for it. We actually won 15 pitches and lost only one in 2009.
E In the last five to seven years we have seen a lot of diversification in the business of communications, which is supposed to use economies of scale to deliver more integrated services to clients. What do you see happening now that the crisis has hit?
I think the post-crisis era is going to bring all those agencies back together. Today you cannot produce efficient communications if you are not using integration, specifically digital and PR, in the best possible way. The crisis created something very important, which was less money to be spent on media. You need to do more with less money but this is not enough. We are in a period which is human-centric and the individual has a say. His opinion can change the environment around him and he can ask for something that he needs.
Before we used to give him what he was supposed to take and he would accept it. What is important is to turn consumers into ambassadors and generate free media for brands. If you turn a consumer into your ambassador they will become your spokesperson through viral internet or conversational media. You cannot bombard individuals with media carpet bombing anymore. If you need a person to react to your communication and become your spokesperson, you need to respect their intelligence and give them the opportunity to react.
Today digital and PR are becoming essential because PR is becoming even more important than television. What you need to do today is to create new contact points. To become competitive, media needs to become creative. We are discovering that all the elements of the equation are coming back together. The markets are going to go back into a fusion mode.
E How long will this take to become a reality?
This will not happen immediately, but at least during the planning stage. You will need one umbrella that covers all areas. Then you still have time to let the specialists handle each part of it independently. The big ideas don’t only come from the creative people anymore, they come from a consensus of experts that can understand how viral media functions and what is the best way to trigger a contagious viral effect.
E What does that mean in monetary terms for the industry?
The way agencies are remunerated is going to change. Today we are remunerated on either media commissions, which are becoming very rare, or we are paid on fees based on time spent and this is going to disappear. In the future you are going to be judged on your propensity to create and trigger free media for your brand. If you are capable of creating a conversational media or a digital conversation for your brand, and you can evaluate the value that you are giving to the brand, you will be paid according to the value that you are creating. When you are paid on a fee basis you are in a comfort zone, it’s like you are a consultant. But this is not the norm today and it is a problem as well as an opportunity.
E So things are going to shift rapidly into the digital arena now?
It is because of digital that you can trace the effect that you are having. In 2006, when we did a campaign for Bank Audi and Johnny Walker, we created a campaign that went viral. The tones of free media that we got were worth millions. But we were not remunerated for that and the client got it free of charge.
E So how do you measure the value of free media then?
We don’t have standards yet. But what some of the clients are doing is they are paying a minimum to cover the cost base and then a bonus based on what sort of value you can create out of your campaign.
E What will agencies have to do to achieve this level of service so they can be remunerated on that basis?
What happened in the not so distant past is that creativity was no longer the norm. The modus in communications was the media people and not the idea people. The decade where media ruled is over. Today we are back to the period where ideas will rule again. It brings to mind the power of the big idea.
