As the dust settles on the collapse of the Publicis-Omnicom merger, it is about time we turned to one of the smaller giant – but no less ambitious – holding groups.
A month or two ago we wrote in The Drum about Yannick Bolloré, son of Vincent, and the new head honcho at Havas. Bolloré fils, you may recall, came out all guns blazing, signalling his ambition by telling last month’s Advertising Week Europe conference in London that he had “four to six” acquisitions “in the pipeline”.
True to his word, Bolloré junior got his cheque book out, and over the past three or four weeks Havas Media Group has acquired a number of agencies to bolster its client offerings.
First of all there was the acquisition at the very end of April of Revenue Frontier, a Los Angeles-based direct-response company that aggregates media distribution through television and radio and distributes direct-response content primarily on a pay-per-order basis.
Revenue Frontier's key selling point is how its business model comes with a claimed "zero risk"; its “cost per acquisition” (CPA) business model works by forgoing cash advances. No money exchanges hands until there are calculable sales or leads (Instead, Revenue Frontier charges a predetermined “bounty” per order or lead post sale).
This is likely to prove extremely attractive to many advertisers, and considerably advances the cause of “payment by results” advocates.
It delivers long- and short-form television content in both English and Spanish to more than 50m US homes via satellite or remotely deployed servers. Clients of the 20-year-old agency include Anchor Bay Entertainment, yoga/fitness company Gaiam, Beachbody, Guthy-Renker and distribution affiliates like DirecTV, Dish, Comcast, Time Warner, Charter, Cox, U-verse. The company generated $6.2m in revenues in 2013.
Terms of the deal were not disclosed, but it underlines Havas's publicly-stated current course to grow through small-to-mid-sized acquisitions (it’s the kind of organic growth strategy that WPP has been adopting for the past year or so). Havas spent more than $23m to acquire several agencies in 2013, centered around the holding company's acquisition strategy to build on its digital, technological and creative strengths, and the new chief’s strategy appears to be building on this.
Revenue Frontier will be incorporated into Havas Edge, the holding company's direct-response agency – the world’s largest fully-integrated direct response shop. Its client list is impressive – Citbank, Black Rock, Time-Life, Barclays, LexMark, VistaPrint and Jockey. Revenue Frontier should prove to be an excellent fit.
Next up was the buyout of Irish media agency GT Media to form a brand-new division of the holding company, Havas Media Ireland.
The terms of the deal are undisclosed but it follows an informal relationship which began in 2012, in which GT Media handled Havas Media Group UK’s clients in the Irish market, such as Betfair, Clarks, Birds Eye and airline Emirates.
Graham Taylor, who founded GT Media in 1983, will become CEO of Havas Media Ireland, and a statement said the senior team at GT Media “will continue to play key roles in the future of the business”.
Taylor said the deal was “great news for both our staff and clients”, adding: “We believe the time is right for a new kind of agile and forward thinking media agency in Ireland.” Great news for Havas too – it’s not every day that one gets to establish a bridgehead in previously unconquered territory with such ease.
GT Media’s clients include Colortrend Paints, Dyson, Honda and Low Cost Holidays.
Staying in London, Havas Media Group UK earlier this month launched a new division, Magnet, which aims to offer “partnership solutions” to clients.
The division will be led by Daren Benton, head of partnerships at Havas Media Group, and Mel Leslie, partnership consultant at Havas Media Group.
The emphasis for this duo will be on creating partnerships in paid, owned, earned and shared media opportunities to consumers and brands. It will sit with HMGUK’s Arena group, and the idea is to help clients’ brands find partnerships to drive engagement and, of course, sales.
Partnership marketing, as this approach is known (it’s essentially the coming together of two or more organisations, usually with complementary skills, to pursue a mutually beneficial marketing goal), is a fast-growing marcomms discipline, and one that I suspect we will return to in the near future.
All of this news comes as Havas reports a 2.3 per cent increase in growth in Europe (and €669m of new business wins) for Q1 2014. This looks like a pretty healthy business with sustainable growth plans.
Andrew Moss is a partner at Green Square, corporate finance advisors to the media and marketing sector.