Independent media agency Fusion 5 is now five years old. It was started by Elie Haber and Johnny Khazoum, both alumni of network agencies, in Dubai. It has since grown to a team of 18 people, with a second office in Abu Dhabi and plans to open an on-the-ground presence in Saudi Arabia.
Fusion 5 has recently rebranded, structuring its new identity around five adjectives. They are: ‘bold’, ‘unconventional’, ‘competitive’, ‘insight-led’ and ‘progressive’. The branding was carried out by a local agency, Brand Lounge, which also gave Fusion 5 a motto, ‘Thank, challenge, win’.
However, the word that is on Khazzoum and Haber’s lips most seems to be ‘agility’.
“The model we have is agile,” says Haber. “Today what clients require is agility.”
As well as rebranding, Fusion 5 has launched a new unit within the agency. Fusion 5 Ignite is specialised in social media performance marketing. “Some clients require specialisation,” explains Haber. “So this is a brand within Fusion 5. The aim is to amplify it, to have it more specialised to capitalise on our specialisation, performance.”
He adds: “The direction is for the whole of Fusion 5 to become a performance-based agency.”
In 2018 it was no secret that brands spent less on advertising. Publicis agency Zenith estimates that last year’s decline over 2017 was 11.6 per cent in the region.
This year it is coming back, though. For Fusion 5, at least. Marketers are shifting their spend from brand-building to more tactical performance campaigns.
“No one projected 2018 would be that bad,” says Haber. “Even for marketers, the best way to cut on expenses was to cut on the marketing budget and advertising. And if you look at 2019, now they believe more in advertising again. That’s the way to push forward.”
He adds: “We now see a lot of clients being more aggressive on advertising, and going a different way. There are more promotions, more tactical versus thematic campaigns.”
Khazzoum says: “It’s changing how it used to be. Even briefs from clients used to be more about building a brand, with KPIs about brand love and ad recall. Now, because of the pressure, everybody is looking at performance and results.”
Currently, about 40 per cent of Fusion 5’s billings are performance-based. Clients such as Abu Dhabi Ports are paying for the business brought to them by campaigns in key international markets. And Saudi OTT video provider Jawwy TV is paying per acquisition, a fully performance model.
“We’ve been performing very well on this business,” says Haber.” It’s a very good model. It requires lots of testing, but we are on the right track. And this is our model, going forward.”
Haber and Khazzoum expect that performance marketing will bring in close to 100 per cent of their revenue at some point, although they will offer what clients want, rather than rushing blindly forward. “We have to follow the market needs and trends,” says Khazzoum.
For now, clients want performance services, Haber says, and brand building is becoming if not less important, at least a part of corporate development that requires less investment than in the past. He cites the example of Careem, the local ride-sharing app that agreed a deal in March to sell to one-time rival and international market leader Uber.
“In six years they created the brand, and they sold the company for $3bn,” he says. “But does it require 25 years to create a brand, to create awareness for the brand? Now it’s easy to create the brand awareness required.”
He continues: “They spent money on creating the brand when they raised funds. It was a strategic direction. When they started they didn’t invest money in awareness. They just launched the application, and it started to get amplified. Today you don’t need a lot of money to create brand awareness. You just need to find a cause or a need to start a brand.”
Traditionally, life was tough on small media agencies. International networks could price them out of the market by using their buying power – based on the size of their international clients, the amount of money a large client base gave them to barter with, and the combined bargaining power they could bring through group deals involving sister agencies.
But digital is a great equaliser. Khazzoum says it is no longer the case that big-billing agencies automatically get the highest discounts from media owners. “They evaluate and they give you a discount based on the business size, the business volume, the potential,” he says.
Haber adds: “They don’t look at the size of the agency, they look at the size of the client.”
Digital media buying may be relatively size-agnostic when it comes to pricing, and traditional media are no longer as strongly swayed by scale. But relationships are still as important as they have always been. Haber says: “Relationship is the foundation of our existence. Without relationship we wouldn’t have launched our company and be here today after five years. This is our foundation.”
Khazzoum adds: “Relationships with media, relationships with clients, everything is based on relationships. If you don’t have a good relationship with your client you lose him. It’s about how you communicate, how you get the best out of your money. Relationship is very important if you’re talking about local and regional media. Because in the Middle East, in the Arab world, within Arab relationships, one-to-one is very important.
Luckily, Khazzoum and Haber have built up 45 years of combined industry experience and relationships.
Even so, they hire a lot of young talent. Haber defers to Emaar chairman Mohamed Alabbar, who once said that if confronted with two candidates, one with a decade’s experience and one with only two years under the belt, he would hire the neophyte rather than buy eight years of redundant knowledge.
“We’ve been going into many business pitches, we’ve been serving lots of clients, and these young people they sit in the meetings, they talk social and the clients are enjoying it,” says Haber.
Even so, the two founders are still involved at all stages of campaigns, which helps with quick decisions and gives clients the attention they are often denied at larger agencies. “Today, from the minute we walk into a pitch, you see senior people involved, either me or Johnny,” says Haber. “And then throughout the tenor of the contract you still see Elie or Johnny. So we are very much involved in the business. You don’t need to go back to the board or to the global CEO to take a decision.”
“We make things happen,” says Haber. “We can make a call on the spot.”
Although Fusion 5 got an initial foothold in the industry by servicing local and regional clients who might not get the degree of attention they would like from international network agencies, times are tough all round and the holding groups are now pitching for smaller business.
“Now, if you look at the market, the big agencies’ revenue streams are under pressure from the multinationals,” says Haber. Multinational budgets are down. Their fees are very competitive. So the big agencies are a little bit under pressure.”
“The agencies are now competing with the small to medium-sized agencies,” says Khazzoum. “We have seen many cases with clients that are on yearly tender or pitch where in year one our competitors were medium-sized agencies; in year two, you had one of the global agencies being part of the pitch; and then this year you have the five big agencies competing, pitching for the account.”
Although Fusion 5 is not a network agency, it is a member of Tribe Global, an international coalition of media, creative and activation agencies that gives it access to partners in overseas markets.
In the UAE, the creative partner of the Tribe Global triumvirate is TMH (The Message House), and the experiential agency is Lightblue.
Fusion 5 doesn’t always have to use their services, though, as that dominating philosophy of flexibility means it is prepared to take on experiential or creative work itself.
For example, the agency recently produced an in-mall activation on behalf of Jawwy TV. “Jawwy wanted subscribers, so we came up with a strategy: digital, performance with networks and different DSPs, and mall activations,” says Haber. “In 12 malls in Saudi Arabia we put in activations. We came up with the whole idea, the whole activation idea behind booths in 12 malls. We came up with the technology, augmented reality, to attract customers to the booth to inquire about the offering and so on. At the same time, we came up with an influencer strategy to create content and scale it.”
Fusion 5’s founders predict that this year will see the industry’s decline bottom out and it will start to bounce back. Khazzoum says: “In advertising, in media, this is what we hear from media suppliers; we have seen some very tough months this year.”
Haber adds: “This year, are we going to see the bottom line in terms of industry shrinking? I think it has been tough and we have been growing slowly. In the coming years, with Expo 2020 and different evolutions happening, I think we are going to be in the right place because we’ve been seeing very positive vibes in the market.”
Haber and Khazzoum have the experience and they have the connections to see where the industry is going, but they cannot read the future. However, they can at least be agile enough to adapt to it, and they hope that will earn them trust, respect and clients in the market.