Havas starts agency realignment

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Havas Advertising moved its Jordan McGrath Case & Partners Euro RSCG ad agency from the Euro RSCG network last week and placed it under the Arnold Worldwide Partners umbrella, giving Boston's Arnold a higher profile in New York. Havas Chairman Alain de Pouzilhac promises the network shift won't be the last.

As Mr. de Pouzilhac builds two strong ad agency groups, bulks up marketing services and enhances media capabilities, additional Havas unit transfers are planned at the world's fourth-largest agency holding company. The four divisions of Havas- Euro RSCG Worldwide, Arnold Worldwide Partners, Media Planning Group and other diversified services-may trade at least some of each other's capabilities.

"We will have three or four changes from one division to another," Mr. de Pouzilhac said. He wouldn't specify which companies could be next, saying it will be up to the respective chief executives.

The Jordan McGrath shift was reported first on AdAge.com March 1.

The internal shifts will come in conjunction with outside acquisitions in the traditional and nontraditional advertising arenas. Mr. de Pouzilhac noted, however, that the bulk of the company's upcoming purchases will be in the marketing services area.

"It's less cyclical, higher margin and more dynamic when we expect traditional advertising to grow by 6% and marketing services by 12%, approximately double," he said. "More and more clients want us to develop marketing services."

Just what those acquisitions might be has led to talk within the ad community. Mr. de Pouzilhac still contends with ever-constant industry rumors that his company is a suitor for True North Communications. He complained about speculation that Havas is interested in True North, saying, "I don't know why all the people focus on that." Mr. de Pouzilhac wouldn't comment beyond that.

One industry observer pointed out if Havas did buy True North, it could fold True North's FCB under its diversified-services arm and create three strong agency network brands.

In shifting networks, New York agency Jordan McGrath will drop Euro RSCG from its name but won't initially take on the Arnold moniker. Like other Arnold member agencies such as WCRS in London and La Banda in Madrid, Jordan McGrath will keep its own name and be billed on the agency's letterhead as "a member of Arnold Worldwide Partners."

"Look at Arnold's lineup of agencies and they're all autonomous. That's how this will be handled. There will be no business changes," said Pat McGrath, chairman-CEO of Jordan McGrath.

NEW YORK PRESENCE

One client, though, will be reshuffled. McDonald's Corp.'s estimated $40 million New York co-op business, now at an Arnold satellite office in Manhattan, will be merged into the Jordan McGrath office. Other McDonald's co-op business handled in Boston will stay there, said Tom Lawson, Arnold's managing partner-chief operating officer.

Arnold has been looking to establish a presence in New York, and the intra-Havas transfer of Jordan McGrath provides a cheap, fast fix. "It's tough to be global without being in New York," said Mr. Lawson.

It may still be tough to be global with New York as just an office rather than headquarters, which Arnold is keeping in Boston. Fifteen of the top 20 international agency networks are run out of New York. Two are based in Tokyo, and one each in London, Paris and Chicago.

With Jordan McGrath's claimed billings of $675 million, Arnold Worldwide Partners has billings of more than $2.4 billion, making it the 23rd-largest global network, according to Ad Age data. Jordan McGrath's clients consist of healthcare and package-goods companies including Procter & Gamble Co., Novartis Consumer Health and GlaxoSmithKline.

"Arnold is more a federation of highly creative agencies than a network," Mr. de Pouzilhac said, explaining why Arnold isn't moving headquarters. Right now, the Arnold network consists of Arnold, Jordan McGrath, six European shops plus shops in Canada and Brazil. He said the network will add agencies in Asia, with a focus on China, Japan and Australia; acquire a second Latin American agency, in Mexico; and fill in more European countries.

Contributing: Laura Q. Hughes and Kate MacArthur

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