PACKING A PERFECT PUNCH

Yannick Bollore, CEO & Chairman of Havas and Chairman of the Supervisory Board of Vivendi talks spells out the ambitious 2019 growth strategy for Havas and the impact of Vivendi on the company’s prospects globally and in India

04 Mar, 2019 by Noor Fathima Warsia

By pure market cap, we are the largest communication group there is…” Yannick Bolloré, the CEO & Chairman of Havas and the Chairman of the Supervisory Board of Vivendi is likely to raise eyebrows everywhere with this remark. Havas, which would be pegged at a market cap of around €3 billion, is the smallest holding company by scale in the current state of affairs. To give a perspective, the largest player, WPP, is pegged at $ 14 billion. Havas’ take-over by, and subsequent ‘integration’ into, Vivendi (pegged at approximately €32 billion), however, puts a different spin on things.
And in a new world order, this apples to oranges comparison should not be taken lightly.

The year 2018 was punctuated by unrest among marketers demanding change in the advertising sector. From holding company structures to the role of media agencies — just about everything seemed dated. The Havas-Vivendi deal was noteworthy in this backdrop. Some background here — in October 2017, Vivendi acquired a majority stake in Havas, stating that the marketing services group will be integrated into the overall offering of the French media and entertainment conglomerate.

Vivendi comprises several media assets globally, but the ones operational in India include the likes of Universal Music Group, Daily Motion, Gameloft and Canal+ International. Every paranoid (read agency) person will remind you that where there is transaction, there is inherent distrust. The thought of a media buying company being active sibling with shared leadership to a media seller would have been laughable, preposterous even, at one point in time, Dentsu in Japan being the exception to the rule. Every effort that advertising holding companies or their subsidiaries have made in the last two decades at least have either not taken off at all or never had enough scale to be taken seriously. Dentsu itself could not replicate its Japan style of operations in any other market.
But times, they are indeed a changin’.

A TECH WORLD REALITY
Recall the famous adland chiefs’ grouse of digital media platforms like Google and Facebook grading their own homework - it is still happening despite the hullabaloo - this is the ecosystem adlanders continue to navigate.

“As Vivendi, we are twice the size of the next holding company. The reaction from our clients has been extremely positive. They understand the importance of content. They are interested in our story. But we are still scratching the surface of what this new structure means and can deliver. There is a significant amount of work already done from the Vivendi side. Now we need to see how and what we propose to our clients to bring more scale to this,” Bolloré notes.

He explains his comment will not apply to the world of advertising only but when it comes to the larger ecosystem, it packs a punch. “When it comes to discussion with platform partners such as Alibaba, Facebook, Google or more tech-focused companies such as Samsung and Huawei, they all have a more centralized approach and are willing to talk about everything at once. The Vivendi Havas combination becomes very compelling then,” he says.

Bolloré asserts that Havas’ size and scale was never a problem in its advertising business. Its staff of over 20,000 people covered all disciplines. “We did not even want to become too big, because that would make us too complex and make it too tough to change. The only handicap, for want of a better word, that we had was with the tech giants,” he remarks. A situation that he says has altered significantly in the new avatar.

ADVANTAGE, CONTENT
In the last 17 months, Vivendi has restructured itself to pool in synergies of two opposite ends of the table due to the Havas take-over. Essentially, it was building on an earlier strategy of exploring ways where its several assets could work better together to drive efficiencies and find unprecedented solutions.

Much had already transpired between these companies before the actual take-over. “We had begun with some partnerships and the results were very encouraging,” Bollore recalls. Havas had partnered with Universal Music in Los Angeles and a subsequent data alliance project at CES three years ago. Data scientists at Havas assisted Universal Music to better understand their audience. “We took complete advantage of the digital world, and it was a big success. Over the years, content has become very important. It enables us to deal with problems such as ad fraud, brand safety or viewability that the industry been facing in newer forms of advertising,” the holding company chief reflects.

As ad-free content gains momentum for a new generation of consumers, agencies will have to find more ways to help brands engage with consumers through content. “Consumers don’t care if the content is coming from a brand. For long, we have lived in this misconception of keeping the brand out in the name of engagement. This is not true at all. If the content is relevant, meaning if it is the right content, at the right time, on the right screen to the right person, that is all that matters. Our structure puts us in the perfect vantage point to access these insights and bring such solutions,” Bolloré asserts.

In his enhanced list of priorities as Vivendi’s Chairman of the Supervisory Board, among the top three is the role of India in Vivendi companies’ growth plan.

THE INDIA OPPORTUNITY
Very recently, Bolloré was in India along with his core leadership team. This included Peter Mears, the CEO of Havas Media Group and Chris Hirst, the newly appointed Global CEO of Havas Creative. The team minced no words in stating that the 2019 ambition is to grow thrice in size, on all counts that matter.

From a 300-odd company present in three cities including Delhi, Mumbai and Bengaluru, Havas intends to grow to 900-plus. The agency also aims for the revenue to reflect this growth. However, a large portion of this is expected to come from acquisitions. The agency had added Sorento, and hence healthcare, to its mix in 2017. On this India trip, Bolloré and his team met up with three potential companies. Without divulging details for reasons of confidentiality, Bollore informs the agency is looking for acquisitions in the sectors of experience design, activation and also digital.

“Digital is an ongoing conversation and continues to be important. But increasingly, we really believe that in today’s world, customer experience will be key to all brands. It would become mandatory to have the right solutions across touch-points. We have made tremendous progress in this and it is critical for things to be state of the art. This is an area we will continue to invest in,” Bolloré informs.

Havas very recently steadied a new management team in India as well with the appointments of Rana Barua and Bobby Pawar, adding to the current leadership comprising the likes of Anita Nayyar. The changes in Havas, added with the formation of the Vivendi India Committee, are some of the steps the team has taken to give a shot in the arm to its India story. The expectations from India – both in the quality of work and in revenue – are high. Havas will build on its ‘Village’ proposition to achieve these goals.

VILLAGE WISE
Traditionally, the media side of the business has been strong for Havas. “We have experienced important growth in the market over the past decade. We have a very well-established organization in this market on the media side and we have great talent. What you can expect from us over the next 12 months is that we are investing in talent across the village,” remarks Mears.

He believes the new village leadership will impact Havas’ go-to-market strategy. He adds, “Some of the challenges we have faced in the past around our scale are becoming less relevant now. Scale is important but it’s not the only answer. We see huge potential for Havas in India because there are doors open to us now that did not exist previously. I am really optimistic about the entire India operation and not just the media group.”

Mears and Hirst both are of the opinion that changes at the group level globally will have an impact in India. For example, adopting common purpose around making a meaningful difference, and how that comes to life through the creative and media groups.

Hirst informs that Havas’ India plan would be to span multiple sectors within the marketing services mix. The village model will then allow to build the right teams with the right people. Technology will continue to be more important for the agency. But people and culture will take precedence, and so will understanding the true essence of a village model.

“We try really hard not to use the word ‘integration’. Our model isn’t integrated in the way people understand integration. When people talk about mergers and integration, they have this big mush where everybody gets squeezed into a single P&L and such. That isn’t our model. We have co-located businesses and we work towards doing the best in each one of those businesses. We then create our cultures, structures and frameworks to enable those businesses to organize themselves around individual clients. And we create models flexible enough to adapt to opportunity,” Hirst explains.

THE CREATIVE CHALLENGE
The ongoing work is at present twofold — to be the best in class in everything it does in each of its businesses, and to be able to work out how it can deploy resources around individual clients without the P&Ls getting in the way. “This is a combination of leadership structures and cultures within that village. We also have identified a number of what I call ‘red threads’ that are shared strategic tools or behaviours that might exist across a village or across the world. We have a tool called Meaningful Brands, both a global survey and an operating system, that allows different businesses to use the same languages and behaviours when thinking about how brands operate,” comments Hirst.

Between the over-arching ethos it has formulated for itself and the specific roadmap, Havas has laid out its plans to better hold its footing, and subsequently position itself, on a growth trajectory. Unlike the media side of the business, the creative side of Havas is still very low key in India. Its investments in people and culture aim to course correct this. Hirst asserts, “In addition to talent and culture, we have to make smart acquisitions and organize ourselves around our clients’ problems. At the end of the day, we cannot do it without these things. That’s why Bobby and Rana are here. We want to start that journey now. Our role at the global level is to create an environment that will allow these teams to succeed.”

Havas’ focused drive towards new business development, both at global and local levels, should play its part in its India story hereon. The leadership team has high expectations from the market, and it is eyeing growth-led transformation. As Bolloré says, the foundation for the India narrative is set, and even done without compromise in terms of investment. The proverbial clock is now ticking on whether the agency will reach the goalpost in 2019.

India will soon grow to Top 5 position among markets in advertising globally: Yannick Bolloré

On the face of it, with one simple move, Yannick Bolloré went from being the CEO and Chairman of a €3 billion global communications company, Havas, to Chairman of the Supervisory Board of French media company Vivendi, that is market-capped at € 33 billion, when his father Vincent Bolloré – Vivendi’s top investor - anointed him as the new Vivendi chairman in April 2018. As simple as it may sound, much preceded Vivendi’s decision to take over Havas earlier, and integrate it with its other brands, most of which are primarily in the media and entertainment space. Vivendi, hence, is not just a regular holding company, which in effect makes Bolloré’s role much more unique than his peers. The opportunity, and the responsibility thereof, is not lost on the 39-year-old chief.

In conversation with Noor FathimaWarsia during his recent India visit, Bolloré takes stock not only of the India opportunity for the company, but the larger play for the media and advertising sector at the global level. Here are some edited excerpts from the conversation:

Q] Tell us more about the agenda of this trip to India. What are some of the things on your to-do list?
India has always been very important for Havas, and this trip is very important for me for several reasons. India is one of my top three personal priorities in 2019 – from an overall Vivendi perspective. We have market-leading brands here and the objective is to grow this even further.
From a Havas lens, the growth and the opportunity story of India has been told many times and that reiterates why we will continue to invest and grow our footprint here. India already counts among the top 10 markets in advertising globally. It will grow to the Top 5 position soon, led by a combination of growth in newer forms of marketing and advertising, and a parallel growth in traditional advertising. In that sense, India is unique.

For some of our clients, India is already one of their largest markets, and for others, it is a critical market. It is our responsibility to assist them in realizing their India ambition, and do so in the most effective and efficient way possible. We are making progress on several fronts in that direction - right from a new management team to investing in acquiring companies in the right domains such as activation, design and digital, and putting a plan in place that will bolster organic growth as well.

Q] While India, and Asia per se, have been important markets in several conversations over the years, sheer numbers from last year were indicative that any marketing and advertising holding company that performed well in North America was doing better than others who had invested in Asia. Is there a disconnect between the Asia promise and the actual performance?
It is a fair question, but there is always more than one factor at play when it comes to a company’s performance and numbers. Without doubt, North America is a big focus for us too. After Europe, which generates about 50% of our revenue, North America brings in 36% and this number can grow a lot too, given the size of that market. The market-share of Havas in Asia Pacific is lower than what it is in the rest of the world. It is imperative for us to grow significantly in Asia Pacific, and India and China are two massive markets. More specific to India, this market is still a growing opportunity. But whether it is statistics or intuition based on statistics, I reiterate that India will continue to be significant in the years to come.

Q] The key theme for 2018 was marketers calling for the business of advertising to change. As there are leadership changes in some of the biggest FMCG players, what do you expect 2019 headlines to be like in that context?
It is becoming increasingly complex for marketers and for businesses on the whole. Being a CMO or CEO today is hard. The demands of leadership roles are changing, and industry leaders are evolving accordingly. From all conversations we have had with our clients, the move from ‘transactional’ to ‘partnership’ in relationships is evident. Our industry itself is changing rapidly, and that is a very good thing. It signals more maturity and positive times ahead. Clients’ demands from us would be similar in 2019 too, but the nature of the relationship most certainly is becoming that of trusted partners.

Q] The Vivendi Havas take-over will soon be two years old. The scale of the overall business and the expectations from you in that sense have changed completely. How are you dealing with that?
When we decided to join Vivendi, it had significance from a company, as in Havas, standpoint and also from a personal perspective for me. As the Chairman and CEO of a €3 billion group company, I was very happy to be part of a bigger group, capped at over €30 billion. This for me was key — it means playing in a much bigger field with increased challenges, competition, opportunity and synergies. We are barely scratching the surface of what this can translate to and the kind of work that we can do as a company now.

Each brand has its own growth plan, and we are also exploring how we can help each other. Universal Music Group is a leader in its space; it is massive in India. Gameloft is doing tremendously well, and the mobile growth opportunity ensures it has a bright future as long we are developing the right strategy to tap it, which we are. Daily Motion competes in a tough market. We have to strive for excellence in that from the technology, monetization and overall content aspect. But that again is a growing space. Marketers understand the value of content and this counts as our biggest strength.


Q] Finally, when can we expect the next Palau Pledge scale of idea coming from India?
We have done the legwork for it with a new team here. And we have great clients. Palau Pledge reminds us that brands today seek and serve a larger calling and have aligned themselves to purpose, and to being more meaningful. So, we have all elements in place now. I will let the team here and their work answer the ‘when’ part of the question.

">‘Creativity is everyone’s job’

CHRIS HIRST, GLOBAL CEO, HAVAS CREATIVE

Often described as a change agent and dubbed an “inspirational leader”, Chris Hirst was named the Global CEO of Havas Creative in January 2019. His expanded remit included developing Havas agencies’ creative reputation, as well as strengthening the group’s global village model, forging further integration with owner Vivendi. ‘Creative’ specifically is one area where Havas in India is yet to earn its stripes. As the agency makes some changes in that direction, in this conversation with IMPACT during his India visit, Hirst speaks on his new role, the India experience and ‘creativity’ as a buzzword for holding companies. Here are some excerpts:

Q] It is just over a month in this new expanded role as global head of Havas Creative for you. The India leadership team too is very new. What are the opportunities and challenges due to this?
Our business is a people business. It is all about talent and culture. The challenge is to create a powerful alchemy that gets the right talent in the right culture, combining those elements in a way that allows our business to outperform competition. In our industry, there is no tangible point of difference. Fundamentally, there is nothing different between good agencies, average agencies and great agencies, except for talent and culture. With the right people in place, and given Havas’ collaborative culture, we have laid the groundwork to tap the massive opportunity in India.

Q] Irrespective of the holding company, creativity or creative reputation is pinned as top priority on everyone’s 2019 agenda. Do you feel it is becoming more a buzzword?
For someone who has creative in their job title, creativity has to be top of my to-do list. As a business, we have to ensure we have creativity in the output, in our nature, in our culture, and at the heart of our business. In some of our businesses, that is already the case. In some, it isn’t, and we have to work to achieve it.

Creativity isn’t just the job of creatives. In agencies, you need to get the framework and the organizational structure right to ensure everybody in the company understands what their role in the larger picture is. There is no question that we at Havas have got work to do in terms of the transformation of our creative reputation. In our business, reputations generally do not lie. You cannot change your reputation by hiring different PR people. We have made some progress on that front as you can see in the steps that we have taken in markets like India already.

Q] Let’s talk a little about technology and creativity from an India perspective. Are the two working well together already?
There is no equation or algorithm on how best to use technology and creativity. Creativity is one of the words that gets used and abused. When used properly, creativity is about people with real skill and craft producing work that creates a functional and emotional connect with people. Creativity then doesn’t require technology. Increasingly, what we should do is understand the broader role that technology can have. There are many points along this journey from understanding the problem to creating the idea and executing the idea. Technology can have a big or small role to play in that journey.

Ultimately, everything really boils down to what is the problem the client needs fixed. We then get the right mix of people to address that problem, viewing it from different lenses and ensuring that the best solution is put in play. In our world, the mix of people is really the answer to the technology question. I don’t think these rules are different for India as compared with anywhere else. The scale of opportunity, growth, ambition and optimism that exists in India is very exciting and is liberating to work with. However, the way we work and the way we succeed in that context remains the same.

‘We tend to confuse transparency and trust’

PETER MEARS, CEO, HAVAS MEDIA GROUP

Seldom has the marketing industry faced such complex times as it does today. As CEO of Havas Media Group, Peter Mears, who is also a member of the Havas Group Executive Committee, has a more unusual task at hand than some of his peers. At a time when marketers are asking for greater transparency in legacy structures, Vivendi’s 2017 take-over of Havas made it sibling to several media companies such as Universal Music Group, Canal+, Daily Motion and Gameloft. Consequently, in addition to the regular fare, where he oversees global operations and strategy for all of Havas Group’s media units and supports Havas’ global brand partners, global new business team and manages all regional and local leadership, arguably Mears’ role also requires him to work harder when it comes to the trust quotient in the agency-client relationship.

Here are excerpts from a conversation IMPACT had with Mears:


Q] Even as there is segregation at the operational level, Havas and Vivendi’s other media assets ultimately belong to the same parent, and there is a layer of integration at play. What are the specific steps you have put in place to ensure transparency and comfort to your clients?
Transparency has been a subject of great debate over the last couple of years. In the same way, we sometimes confuse integration and collaboration, we tend to confuse transparency and trust. Our relationship with our clients is that of a trusted partner. A trusted partner would do the right thing for you. So, if that’s about making recommendations about your creative strategy or your media strategy, your trusted partner will keep your growth in mind.

The media and entertainment companies under Vivendi give us unrivalled access to different content opportunities and access to consumer insights like no other company. For example, no other organization understands youth the way Universal Music Group does. Bringing that access and insights to our clients gives us massive competitive advantage. It’s not about selling stuff but about helping our clients grow by leveraging insights we have through our partners, and hence building a trust-based relationship.

As an industry, it is important we fall out of love with the mechanics of the business and re-focus on what our overall purpose is. Ultimately, we are there to put together the right solutions for our clients whether it is in creative, media or PR, without necessarily selling stuff.


Q] You would soon be celebrating the two-year anniversary at Havas. Any milestone or key take-away to mark this time?
I have been here for just over 18 months now. The first year was critical for the business and for me personally. We were making changes in our leadership and in the way we organize ourselves internally. There is a marked focus in our new business development initiatives. We have been aggressively pitching globally.

We have also emphasized this new business drive on our local markets. This has been an important shift from where we were before. The role of global leadership is really nothing without the local people and operations. We very much exist to support the local teams to deliver the best work possible in their regions.


Q] Tell us more on what you had to learn or unlearn to adapt to the Havas culture, especially given your previous experiences in companies like IPG and Omnicom?
I have spent a large part of my career working for American holding companies. Havas, being a French holding company, did mean a different culture, and hence, transition at more levels than one. In my experience of working with integrated teams, I have seen the best work happen when I was sitting around the table with people from different domains and expertise. Bringing that experience forward has been truly interesting.

The unlearning part is thinking about the P&L (profit & loss) and being protective over just the media piece, sometimes even at the expense of others. One part of the transition for me was to be able to think about the collective.

Feedback: impact.edit@exchange4media.com Category: Cover Story Volume No: 15 Issue No: 39

RELATED POSTS

BOOM TIME FOR WEB CONTENT CREATORS

THE HOTTEST JOB ROLES

IS THE INDUSTRY ANY CLOSER TO ADOPTING CPT?

WENDY CLARK: COUNTING ON THE 3Ps

SUBSCRIBE TO OUR NEWSLETTER

 


E- PAPER

CURRENT

LAST WEEK

SUBSCRIBE TO IMPACT ONLINE

IMPACT SPECIAL ISSUES

ANNIVERSARY
Top 30 Under 30
GOAFEST DAY TWO
13TH ANNIVERSARY
GOAFEST DAY ONE
GOAFEST DAY THREE
Copyright 2019 Adsert Web Solutions Pvt Ltd . All Rights Reserved.