Hisham Maksoudian, talks to ArabAd in an exclusive interview about the fallout that resulted in his leaving Adrenalin, the agency he co-founded in KSA seven years ago, to start his own business dubbed AdCouncil as Group VP.
You co-founded Adrenalin few years back, supervised its birth and success in KSA then, without prior notice, dropped it to establish AdCouncil….
Adrenalin was established in September 2009; it was the result of the problems that occurred between the two main partners of the Group that I was part of for 21 years. Having taken a stance with one of the parties, I was requested to leave. The day I received that request, I was offered four agency licenses to run, while three MBUs pitched for my name and portfolio, in addition to a big name in the media who offered me an open budget to start a company; I had successfully built my reputation for over 30 years in Saudi. I decided to start Adrenalin with someone everybody knew, someone I’ve worked with for a very long time; and he was the major shareholder.
Allow me here to thank him through ArabAd, for his continuous support throughout my career. He was the teacher, the Godfather and my backbone. I openly would like to say, “Thank you very much”.
Then what exactly happened?
It is true that brand equity is invaluable; we have worked hard and effectively managed to make a brand out of Adrenalin. I believe that there is a point in life, and after a certain age, where you should be able to operate and take your own business decisions if you are able to – with deep market knowledge and strong backup, especially if your relationship with the team, the clients and suppliers – the main pillars of the business – is solid. This is when I decided to start AdCouncil.
I respect the previous major shareholder/partner’s decision in that he wanted to keep the name ‘Adrenalin’. The split happened respectfully and we are still on good terms. At the end of the day, we’ve known each other for 27 years. The transition to AdCouncil was very smooth; we did not have to ‘drop’ Adrenalin, thanks to him, again. Our offices, our teams, and our addresses remain the same, the transition was seamless; and to our clients, it was business as usual.
We have clients that have been working with us for more than 25 years; they have transitioned with us through the evolution of the company names. They were with us back when we were part of the big group, transitioned to Adrenalin and now in AdCouncil. Why? For the professionalism, service excellence, creativity and competitive pricing we offer. But most importantly, it is our relationship with our clients that matters. We operate with unparalleled dedication and involvement with them: they understand it is not about the name, but rather the people behind the name.
And I take this opportunity to extend a big “thank you” to our clients who have trusted us since they joined years ago, no matter the name; they are our partners, our friends, and our ambassadors. Another big thank you to the team that works hard and believes in this organisatio-- some of them have been with us for more than 20 years now; and of course, a big thank you to our suppliers who have stood by us ever since we have been operational.
Is Adrenalin going to operate again in Saudi?
In my opinion, from a business and financial standpoint, especially for someone who owned an empire of over 50 offices in the Arab World with more than 1800 employees out of which he made a fortune, I don’t believe he would start from scratch in a single market. But we cannot assume anything here regarding his plans for Adrenalin.
Also, why is your main focus on the Saudi market?
My focus has always been on Saudi Arabia, between Jeddah and Riyadh; I started out and built my career here and the relationships one can develop over 30 years are remarkable. I am fortunate to be surrounded by Saudi and non-Saudi clients/friends I take pride in, and with whom we have reached a great level of trust.
Nonetheless, we also have plans beyond Saudi. What restricted us to expand previously was the market situation in 2008-2009, but now with the new venture and the new Board of AdCouncil, the shareholders’ plan for growth is big and we will announce it soon. We have local strength and we know that moving to the regional market is not going to be an easy journey, but we always enjoy a challenge.
Does setting-up a new operation in KSA imply that the market is profitable enough?
Profitability evidently differs from one industry to another. However, the good old advertising days in Saudi are gone, when it comes to margins. What we are sure of, is if any agency is still operational, it means they are making money, or least breaking even. What has been happening politically in the Arab World is to some extent making every business unstable. The Saudi market is still healthy; although we have witnessed strong growth over the past 30 years, we could expect a slight slowdown this year.
Also, would you say there is still room for new players?
There will always be room for new players. If we split the industry between multinational and local businesses, and if tomorrow a boutique agency starts representing a part of any of the big brands, they would forward that part to a local representative and would need to establish a local operation for this business. And at the local level, we know that there are huge family businesses in Saudi. Fresh graduates in Advertising and Marketing could easily set up and run an advertising operation and handle the budgets for his family business and many are doing so.
On that note, what are the chances for survival when it comes to the existing independent agencies competing with multinational giants who seem to be gulping up all business?
For the last 15 years, when the big advertising agency names entered the market, the major changes were different. Big clients shifted from one agency to another. These giants take clients from each other on a global level. But there are many local brands and many multinational brands that are represented by a local agent and their activities are being run through their local agent/dealer. If you look at our portfolio, to mention a few, you will find GOSI, Autostar, EMS, Tasnee, and Bin Saedan, which are Saudi organisations as well as Longines, Omega, Pizza Hut, Midea, which are international brands. High local spenders in Saudi include telecoms, banks, dairy companies, car dealers; these are all local companies and most of their activities are done locally.
Regarding media pricing, in many circumstances, prices can get cheaper at the local agency level if they know how to get it and if they have the right relationship with the media.
What of the creative scene and the advantages local talent bring in?
We are still facing the lack of local talents when it comes to creativity in advertising. Although there is improvement, as no universities used to offer such programmes in their curriculums. Only recently has a renowned women’s university introduced the creative programme and we are proud to be on their yearly list. We get graduates from that university for summer internships and already hire their graduate,s in our ladies section every year, who are talented. We hope that men’s universities take such actions, because we are definitely in need for local talent.
Rumour has it that KSA government is deporting many Lebanese… Is that true?
These are just rumours, and will remain so. The Saudi government has generously been opening doors and opportunities for hundreds of thousands of Lebanese to work in Saudi and this is still the case. If a resident however, is involved in matters that could threaten the security of the country, then this is another story. In that case, they would definitely be deported, whether they are Lebanese or of any other nationality.
However, I would like to extend a message to our beloved Lebanese government: Do you know how many families in Lebanon are living off a single Lebanese family living in Saudi? If one family is deported from Saudi, this affects many other families in Lebanon. I can assure you, that directly or indirectly, every Lebanese family living in Saudi is helping a minimum of 4 families in Lebanon. We hope that our government members consider these sensitive matters in their speeches, especially with what is going on in the Arab World, which unfortunately does not look very promising in the short term.
Any last word you’d like to add…
AdCouncil is now a new name on the advertising scene. But it is a continuation of what started seven years ago. In fact, it started 30 years ago, with a hat that has evolved over an agency that has always been internally driven by the “One Family” motto, and geared professionally by “Ideas that Sell.”