Havas sets bar higher

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In a year that saw double-digit decreases in revenue for many i-shops, the interactive units of Havas Advertising held their own, and then some.

Euro RSCG Interaction, the interactive network of Havas Advertising-owned Euro RSCG, was the third largest i-shop in the U.S. in 2001, recording $161 million in revenue , up 2.5% from 2000. Globally, Euro RSCG Interaction claims to be the largest interactive network, with $230 million in revenue in 2001 and 45 agencies worldwide.

Havas' other ad network, Arnold Worldwide, maintains a significantly smaller, but still growing, interactive presence. In early 2001 it opened Arnold Interactive, a 75-person unit based in Boston. In January 2002, Arnold Interactive merged with JMCT Touch, the interactive unit of Jordan McGrath Case & Taylor, to gain a New York presence.

Clearly, the interactive driver at Havas is Euro RSCG, with more than 400 clients worldwide, including IBM Corp., Intel Corp., Nokia and Volvo Cars of North America. Perhaps the biggest testament to Euro RSCG's ability to manage interactive work is the dramatic change in fortunes for Circle.com, which Euro RSCG inherited in 2001 after Havas acquired Circle's parent, Snyder Communications. The company, renamed Euro RSCG Circle last year, lost nearly $43 million in 2000 on net revenue of $67.3 million, but is now profitable; revenue is expected to grow this year, says George Gallate, CEO of Euro RSCG Interaction. Havas reported a net loss of $50.6 million in 2001 on $1.9 billion in revenue.

Though its interactive business is holding its own, Havas' other businesses face a tough year ahead, says Frederik Kooij, European advertising analyst with JPMorgan in London. The company's media business is weaker than its competitors', and with the pending Publicis Groupe /Bcom3 Group merger, pressure will increase. "They've got a hell of a lot of things to overcome at the moment," Mr. Kooij says.

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