Havas was for years France's biggest advertising organisation, until toppled by the phenomenal growth of arch-rival Publicis. It is now the last survivor of what was once a sizeable second tier of smaller international marketing organisations. Others such as Aegis, Grey and Saatchi & Saatchi had already been acquired by larger marketing groups; Havas remained independent, before it too was absorbed into media group Vivendi during 2017. At the same time, most of its main subsidiaries have been re-consolidated to form a single diversified offering. In the most significant such move, creative network Havas and media buyer Havas Media were combined in 2017 under a single management team. Several separate standalone units remain, not least renowned creative agency BETC and secondary US agency Arnold Worldwide. The group's performance has improved steadily in recent years. Rapid and sometimes reckless expansion during the 1990s created serious problems for Havas after 2001. Despite recovery in the wider worldwide industry, Havas's billings and revenues continued to underperform rivals, and this eventually led to the intervention of wealthy investor Vincent Bolloré, who seized control of the business in 2005. That change of ownership and renewed stability made a significant difference to the group, although Havas's size still made it vulnerable within the rapidly consolidating industry. As a result, as most observers had long anticipated, media group Vivendi, also now controlled by Bolloré, assumed ownership of Havas during 2017.
Who are the competitors of Havas? See ranking of Leading Global Marketing Groups
Latest news about Havas? Click here for recent headlines from Adbrands Weekly Update
Subscribers only: Adbrands profile
Adbrands Company Profiles provide a detailed analysis of the history and current operations of leading advertisers, agencies and brands worldwide, and include a critical summary which identifies key strengths and weaknesses. Adbrands Account Assignments tracks account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets. Subscribers may access the following website links:
Adbrands Weekly Update 23rd November 2017: Havas was the last of the major marketing groups to report 3Q figures. While they weren't as bad as Dentsu and WPP, and were at least better than Havas' own Q2, they were still significantly below past performance. Overall organic growth weighed in at just 0.1%, the same as Q1, cutting the YTD decline to 0.3%. There was a significant turnaround in North America (up 2.9%), while France held its own at 2.6%. APAC & Africa and Latin America were also strongly positive. But the rest of Europe was very poor, with UK one of the worst performers with a decline of 10.9%. "There are many factors at work," said CEO Yannick Bolloré, "foremost among them reduced spending by most of our clients or a change of management in certain countries, such as in our UK media agency." With all results now in here's the final Q3 ranking for organic growth. MDC 7.6%, OMC 2.8%, IPG net sales 1.5%, PUB 1.2%, IPG revenues 0.5%, Havas 0.1%, WPP net sales (1.1%), WPP revs (2.0%), Dentsu (2.1%).
Adbrands Weekly Update 31st Aug 2017: Havas was the last of the major marketing groups to report results for 2Q. The weak numbers were broadly in keeping with most rivals, with an organic decline of 0.9% for the quarter, led by a shock 7.1% slump in the UK - which Havas blamed on expenditure cuts by key digital client Unilever - and a 6.3% decline in the rest of Europe except France, which gained 8.9%. North America was down 1.7% and Latin America by 4.0%, offsetting a 3.2% gain in Asia Pacific and Africa. Reported revenues were E589m for the quarter. For the half year to-date net income was down by more than a third year-on-year to E57m. Final scorecard for organic/LFL growth/decline for 2Q is as follows: Omnicom 3.5%, Publicis 0.8%, Interpublic 0.4%, WPP revenues -0.8%, Havas -0.9%, WPP net sales -1.7%, Dentsu -4.8%. Much smaller MDC scored a gain of 11.7%.
Adbrands Weekly Update 18th May 2017: As widely anticipated for at least a year, the Bolloré clan have taken steps to consolidate control of their entertainment and media interests. Media giant Vivendi, chaired and 20%-controlled by Vincent Bolloré, has offered to acquire the 60% stake in Havas Group held by his private vehicle Bolloré Group for E2.36bn. Havas is of course run by Bolloré's son Yannick Bolloré. The combination would, ironically, reunite two businesses that were already at one time stablemates. The original core of what is now Vivendi was the old Agence Havas media and marketing group. One of Vivendi's few remaining holdovers from the original Havas business is its controlling stake in pay-TV platform Canal+, and this has been joined by Universal Music as well as various telecoms and computer gaming interests. In a memo to Havas staff Yannick Bolloré emphasised the potential synergies between the two groups. "Our groups evolve in the same environment, some of our teams already collaborate and our cultures are similar and complementary... Our clients expect us to come up with innovative solutions and having privileged access to Vivendi's prestigious assets would enable us to create unique offerings and services all over the world."
Yet regulatory approval is by no means guaranteed, since the merger would combine dominance in multiple influential communications media. Departing Publicis CEO Maurice Levy complained that this would represent a return to 1980s-style conflicts of interest: "I’m not sure advertisers will like that they lose neutrality in their recommendations." Vivendi said that Havas would have to bid against other agencies for access to its media channels. Yet combination would seem to directly contravene France's Loi Sapin, introduced in 1993 to increase media transparency, which prevented agencies from acting as both buyer and seller of ad space. That law will be expanded next year to cover digital media, currently excluded from its remit. As a result, Havas could theoretically be barred from buying any advertising space on Canal+ or the group's other broadcast and digital channels. Clearly we're entering new territory here. As Sir Martin Sorrell told the Advertising Week Europe conference as long ago last year, Bolloré is a "fascinating example of someone who owns media, content and a telecoms platform, and an agency. It’s never been done before".
Adbrands Weekly Update 18th May 2017: With all the marketing groups' results now in, here's the final ranking for organic growth for 1Q 2017. MDC Partners leads with 5.6% followed by Omnicom (4.4%), Dentsu (3.9%), Interpublic (2.7%), WPP (net sales 0.8%, revenues 0.2%), Havas (0.1%) and Publicis (negative 1.2%).
Adbrands Weekly Update 27th Apr 2017: Like other Europe-based marketing groups (and unlike their US counterparts), Havas also suffered a dramatic slowdown in growth in the first quarter. Although reported revenues were up 2.6% to E519m, the organic lift excluding currencies and acquisitions was a paltry 0.1%. Europe as a whole was flat, as a modest uplift in France was offset by weakness in the UK and a 2% decline elsewhere across the region. Gains in Latin America were offset by a sharp fall in Asia Pacific & Africa. Despite the disappointing quarter, CEO Yannick Bollore reaffirmed the target of 2%-3% organic growth for the full year.
See full profile
See full profile
See full profile
Free for all users | see full profile for current activities: Havas Advertising was formed in the 1970s as the umbrella for the various advertising interests of what was then one of France's biggest media groups. Originally founded as a press agency (see Vivendi Publishing), Havas moved into press advertising sales in 1920 with the acquisition of Societé Generale d'Annonces. Operations were soon extended to include radio and cinema. In 1923, Agence Havas took over Avenir Publicité, adding outdoor advertising to the portfolio. Mostly, these operations involved acting as a broker to sell advertising space on behalf of media owners direct to advertisers. But gradually, Havas set up a separate network of companies who created or bought that space on behalf of advertiser clients. Over a period of several years, these agencies were consolidated under the umbrella of Havas Conseil, which had become France's leading advertising agency by 1964. To avoid a conflict of interest between the two opposing divisions, the Havas Conseil advertising creation and buying business was established as an autonomous unit under the new name Eurocom in 1972, while the sales agencies were aligned more closely with Havas's main publishing business.
During the 1970s and 1980s, Eurocom expanded its operations into other territories. Initially the French group divided its business into two arms: advertising company Havas Conseil and PR and marketing arm Groupe Belier. In 1977 an early foray into the US to buy local advertising shop Kelly Nason proved a disaster when the agency literally fell apart after less than a year under French management. The group's track record was more stable in Europe, when Eurocom took stakes in British agencies French Cruttenden Osbourne (which became FCO Univas in 1980) and Horner Collis & Dirvan. The French ventured back into the US in 1985, but this time recruited a strong local ally. In 1985, Eurocom combined its Havas Conseil operation in Europe with Young & Rubicam's Marsteller Advertising subsidiary in New York to form transatlantic joint venture Havas Conseil Marsteller(HCM). The deal served both sides equally, giving the Americans a stronger footprint in Europe, and Havas a much-needed US presence. Reflecting its strong European profile, Eurocom negotiated a controlling 51% stake in the resulting business. Two years later HCM added a further US presence with the acquisition of Dawson Johns & Black, a highly regarded Chicago agency. In 1988, the partners added a third arm, combining HCM with Dentsu Young & Rubicam to form Havas Dentsu Marsteller (HDM).
Yet gradually the increasingly unwieldy super-agency began coming apart at the seams. Despite the addition of Dawson Johns & Black, the US remained only a small part of HDM's overall market, contributing only around 8% of revenues. Meanwhile, the European arm of the business was racing ahead. In 1989, newly appointed Eurocom CEO Alain de Pouzilhac enhanced the second-string Belier network with the purchase of a 60% stake in UK group WCRS, which also had interests in the US. Increasingly Eurocom was tempted to make a play for solo status, and in 1990 served notice on Y&R to beef up the US contribution to HDM. When this failed to materialise, the French company terminated the partnership, buying out Y&R and Dentsu to take sole control of HDM Europe. The same year, the group also bought out the remaining stake in WCRS. A third deal in 1991 acquired French rival RSCG, and all three businesses, more or less, were combined under the umbrella brand of Euro RSCG. The few remaining bits of the business, including WCRS itself, were left as Eurocom WCRS Della Femina and either sold off or merged later into a second network Campus (later Arnold Worldwide).
By this time, Eurocom was already operating with virtual independence from its Havas parent. In 1982 the publishing company had floated off a 55% stake in the business, renamed Havas Advertising, and it continued to sell off small stakes over the following years. By September 2000, following Havas's integration into media giant Vivendi, its shareholding in Havas Advertising had fallen to just 11%. As was widely expected, Vivendi sold its remaining stake, by then representing just under 10% of Havas, in May 2001 for around $383m.
In 1999 the group bolstered its patchy media offering by merging its European media agency Mediapolis and US-based SFM with Spanish independent Media Planning. It also acquired UK marketing services group Lopex for around £67m. The following year Havas Advertising announced the acquisition of US group Snyder Communications for $2.1bn. That purchase transformed the group, pushing it into the ranks of the top five marketing groups worldwide. Snyder's assets were divided up between Havas's various networks.
The group strengthened its media business still further in 2001 with the announcement that it would acquire British-based Tempus for £425m. However that deal was derailed by a higher bid from WPP. (See Tempus profile for more). Although Havas initially expressed its determination to fight the rival bid, all plans were thrown into a spin by the terrorist attacks on the US in September. As share prices plunged, Havas announced that it would allow its offer to lapse. A few months later it became known that the group was exploring alternative names for itself. Its license to use the Havas name - still owned by the advertising group's erstwhile parent, Vivendi Universal - was set to expire in early 2002. In the end the advertising group paid E4.6m to buy out all rights to the brand, and keep its name, although the "Advertising" tag was dropped.
Financial results for 2001 reflected the difficult advertising environment. Revenues rose almost 25% to E2.2bn. However write-offs of goodwill and restructuring costs eviscerated profits, creating a net loss of E58m. The group announced a major restructuring of its agency portfolio: most of the specialist marketing services agencies accumulated through the acquisition of Lopex and Snyder were merged into one of the main three networks, and minority shareholdings in selected other agencies, including Australie and Enjoy Scher Lafarge in Paris, were sold back to management. That left only a handful of agencies still outside the three-network structure.
Havas returned to profit for the following year, although it warned that the trading environment remained difficult. The rumour mill went into overdrive in May 2002 after press reports claimed that Havas was in negotiations to acquire struggling UK group Cordiant. The French company quickly issued a firm denial, but slipped back into losses for the first half of 2003, leading to the announcement of a further restructuring. All remaining agencies outside the three-network system were absorbed, sold or merged, and Arnold also was scaled down to serve as a creative specialist instead of a full worldwide network.
By the end of the year, Havas was still lagging behind its rival marketing groups. Euro RSCG chairman Bob Schmetterer retired abruptly in early 2004, leading to speculation that he had been ousted. Havas shares plunged dramatically on the news, which was accompanied by rumours, apparently unfounded, of financial problems. The group angrily denied the allegations, but went on to report further losses for fiscal 2003, bringing the combined deficit for the previous three years to over E2bn. In July 2004 Havas acknowledged that it was considering the feasibility of a bid for Grey Global Group, backed by private equity investors. However this news was greeted with dismay by Havas shareholders, who feared the consequences of further expansion. The group received board approval to submit a formal bid for Grey, but was outbid by WPP.
Grey's purchase left Havas as the last remaining medium-sized international marketing group, heightening speculation that it would become a bid target. The sudden appearance of Vincent Bolloré on Havas's share register seemed to confirm those beliefs. A businessman with a reputation as a corporate raider, he began to accumulate a holding during 2004, building a stake of over 22% by the end of the year. He was reported to have had several conversations with WPP boss Martin Sorrell about a possible break-up of the group. The uncertainty this generated certainly served to prolong the group's problems. It was, for example, reported to have led directly to the cancellation by Interpublic of a planned media buying alliance with MPG, which would otherwise have greatly assisted Havas's struggle back to full financial health.
Havas CEO Alain De Pouzilhac led a very public and acrimonious opposition to what he described as this "creeping takeover" of the group, launching a rights issue at the end of 2004 to dilute Bolloré's stake from over 22% to 20%, but that was not enough to prevent him from gaining the support of other shareholders who voted Vincent Bolloré and his supporters four seats on the Havas group board in June 2005. Bolloré raised his own shareholding back to 22% that month and agreed a strategic pact with another major shareholder, Sebastian Holdings, giving him a notional 26% stake. Despite initial claims that he would tough it out with Bolloré in the boardroom, De Pouzilhac resigned less than two weeks later. Jean-Marie Dru of TBWA was widely tipped as his replacement, but subsequently declined the role. Despite de Pouzilhac's departure, other loyalists stayed on within the group, before quitting towards the end of the year. This led to several legal skirmishes as former CFO Jacques Herail and chief communications officer Alain Cayzac attempted to force Havas to honour a change of control compensation clause introduced in senior officers' employment contracts by de Pouzilhac shortly before the takeover by Bolloré. In 2005, Bolloré briefly appointed former banker Philippe Wahl as CEO, but replaced him less than a year later.
Over the following years Bolloré slowly but steadily increased his holding in Havas, and mounted a similar exercise with the British media buying and research group Aegis, leading to speculation that he would attempt to combine the two companies. His holding in Aegis peaked at just under 30% in November 2007. As a result of this stake, Bolloré effectively blocked takeover bids for Aegis by rivals Publicis and WPP. Yet despite his equity position, Bolloré was unable to persuade Aegis to grant him a presence in its boardroom because of what that company claimed was a conflict of interest. He made his 5th unsuccessful attempt to place two of his supporters on the board in May 2008. Each time, his proposal has been voted down by other Aegis shareholders.
In the mean time, Bolloré has overseen a steady recovery in performance by Havas, helped along by further streamlining, as all the group's operations were gradually consolidated into two main divisions. Several independently branded units that didn't fit into the leaner structure were sold between 2007 and 2009, including US ad agency McKinney and French creative boutique Colorado. See full profile for current activities
All rights reserved © Mind Advertising Ltd 1998-2018