Erwin Guerrovich of Intermarkets: You reap what you sow!

Erwin Guerrovich of IntermarketsBy Dania Y. Baayoun

Sitting squarely among the top players in Pan-Arab advertising, Intermarkets has achieved enviable success and has become a veritable school of thought in the business. Looking at the industry from a fresh perspective, devising long-term plans, all the while keeping an eye on the big picture constitute the thinking that has launched Intermarkets to the forefront. Erwin Guerrovich, Chairman and CEO of Intermarkets gave Arab Ad a trip down memory lane with quick stops at Gemini, Trust Advertising and the future.
What sets up Intermarkets for the prosperity it currently enjoys is a triad of elements that served as the launchpad for Intermarkets’ continued success.
The first of these is a founding philosophy personified in the lingo it chose to operate with. Intermarkets entered the industry with a real understanding of advertising coupled with a new terminology aimed at helping the client and developing strategies, with lesser concerns being budgets and number of ads. Its new language hit home and the agency began enjoying an expanding position in the market, closely behind the big players that existed at the time.
The second key element was a long- term vision concerning the Middle East and Lebanon’s place in it. “Lebanon was not the centre of the world and to better serve your client, you need to be present in other parts of the Middle East”.
Applying this vision, not very popular at the time, Intermarkets opened its first office in Kuwait in ’68, a very bold move in a market that was lagging behind that of Lebanon. “We continued this trend and opened our second office in Bahrain, then, the place in the lower Gulf.
“When war erupted in Lebanon in ’75, Intermarkets was the only ad agency that had a Middle East setup, this third leg of the forward thinking triad catapulted Intermarkets to certain success. “It was business as usual for Intermarkets and complete disarray for the competition.

Survival
“Mind you, in 1975, Lebanon was the centre of the world for Arabs as well as the centre for ad agencies, most of which were concentrated here. When things fell apart, ad agencies had to find means of continuity and survival. Intermarkets was the only one with a fall-back position”. Intermarkets moved its head office from Lebanon to Bahrain, maintaining total continuity with its clients.
In 1975, Intermarkets’ total billings came to $5 million, three years later, they were in the neighbourhood of $45 million. Intermarkets made good on the major head start provided by its forward thinking, diversifying and branching out into the Arab world in ’68, way before the war made such a move necessary.
“Because we are well implemented and knowledgeable about these markets, we are able to feel the pulse of the area. In ’92, we felt that the Gulf was mature for Public Relations in all its aspects”.
Since Intermarkets’ philosophy dictates that any endeavour attempted must be carried out to the highest standards, “we organised ourselves to bring Public Relations from a wellspring of know-how, one with 30 years experience, in the form of the professional agent support of Burson Masteller”, the largest PR company in the world. Intermarkets had ‘serious’ PR in mind when it moved in with the right affiliations and expertise. “Now, four years later, our PR is probably the most successful in the Gulf”.
When asked if Intermarkets is feeling that same pulse in Lebanon, Guerrovich went right to the point, stating that starting February 1st, Intermarkets was putting a specialised PR division into effect and developing the same concept for Saudi Arabia.
In doctoring the weak PR pulse in Lebanon, Guerrovich wishes to inject a multifaceted solution to remedy the advertising ails. “One cannot talk about advertising anymore, it is communication now, it is about branching out into all areas of communication to fulfil the client’s needs. You must give your client a total communication package and to do so you must have expertise in all the concerned fields”.
Parallel to forward thinking, Intermarkets pioneered Middle Eastern regional advertising and is maintaining this vision, opening an office in Syria and one in Yemen.

Merger
As for Gemini, an offshoot of Intermarkets, news of a merger beg the question: why did Intermarkets embark on such a project? “We started it to fulfil a different role in the advertising scene in Lebanon. Gemini was to serve as an agency that would work for a select number of clients and provide very highly creative standards. It was all built around the creative strength of Tilda Ghosn, whose impact has been felt in the industry”.
“That was four years ago, Gemini has since fulfilled its objectives and has grown from a specialised sister company to a creative force to be reckoned with. We found that Gemini could no longer be the little jewel we foresaw in the sense that the operation had grown and had reached a stage where it became a fairly good ad agency”.
Gemini had moved from one category to another. Here, forward thinking came into play. “Moving from one scope to the next required an investment process where the investments were not to be recouped in the same year. Intermarkets had a very strong structure in terms of strategy thinking, clients, marketing, and media planning, with one weakness being the creative department.
“In light of this appraisal, we felt that there was a massive creative force with a need to expand and found ourselves with a weak creative department.
“Putting them together would complement the strengths of both and make Intermarkets a very strong agency, all around. That is corporate thinking”.
Gemini’s accounts have moved to Intermarkets and have been incorporated with the exception of conflicting ones and all of Gemini’s employees have joined Intermarkets. Yet another smart move on the part of Intermarkets which will no doubt reap its rewards.
“If you want to be a good advertising agency, you must provide strong servicing all around to better serve your existing clients and easily acquire new ones.
“The name of the game is development, and development means a strong operation”. Intermarkets’ aim has always been that wherever the latter is present, it should be one of the top three players. This is the case in the Middle East, except for Lebanon. Guerrovich assures that the steps they are currently taking will remedy the situation and take their Lebanese office to where it ought to be.

Trust
As for the rumoured merging with Trust Advertising, Guerrovich put it succinctly, saying “we had 25% ownership of Trust Advertising” which was transferred to Raymond Hanna, partner in Intermarkets, who bought Intermarkets’ shares and ended their stake in Trust Advertising.
Being in the big league, Guerrovich’s outlook on the situation in Lebanon and his predictions for the coming year bear heavily on the industry. He notes that a country’s prosperity is based on its middle class, a fulcrum notably missing in Lebanese society.
“We don’t have a middle class and what can be labelled as such is not even stagnate but rather on a downward trend”.
He sees no indication that there will be any change in the socio-economic pattern in ’97, adding that “’96 was not a good year for the country’s development and our outlook on ’97 is that there are no elements today that hint that ’97 will be any better than ’96.
I am not being pessimistic, I am being realistic”; fairly disheartening Raymond Hanna coming from the chairman of one of the major players on the advertising scene.

Prosperity
As for the effect of this sobering news on advertising, Guerrovich notes that “since advertising thrives on prosperity and when the latter is lacking, the situation for advertising becomes sombre because advertising depends on sales which in turn influence expenditure”.
On an up note, Guerrovich adds that the advertising industry will ride out this slump due to its strong base in Lebanon and to the reassuring fact that a good number of advertising agencies are regional and the bulk of their revenues comes from abroad.
(originally published in Arab Ad, February, 1997)

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