Havas CEO on AI, whether agency brands still matter and why it works with Shell

Ad Age recently caught up with Yannick Bolloré, chairman and CEO of Havas, to discuss its positioning versus its competitors, its Shell account, the state of agency brands and more. Havas last week posted 4.5% organic revenue growth for the third quarter, putting the Vivendi-owned agency company in good stead among holding company rivals that have reported quarterly organic revenue results so far: IPG reported a 0.4% decrease, Omnicom posted 3.3% growth and Publicis leads the pack with a 5.3% increase. Havas has made significant moves, such as acquiring Uncommon Creative Studio and promoting two co-CEOs to head Havas New York. Havas has also faced criticism over its Shell account win, which has garnered some pushback from members of the advertising community. Last week, B Corp-certified agencies signed a letter, supported by activist group Clean Creatives, calling for shops that work with fossil fuel companies to be stripped of their B Corp status. This included companies such as Havas, MSQ and TBWA. Check out the latest Ad Age events and award programs More: Watch Havas’ chilling new PSA for The Harris Project Bolloré has been chairman of Havas since 2013 and its CEO since 2014. The following conversation has been lightly edited for length and clarity. How do you think you’re stacking up against your competitors? When you look at Havas’ client portfolio, it’s quite well-diversified, quite well balanced. Maybe we are slightly overweighted in health compared to our peers. We have one-third of our revenue coming from health clients, but otherwise, it’s quite well balanced. I looked at the earnings for our top 50 clients and they were all great. Maybe we are suffering less than our peers [because of] better diversification. I don’t like to say bad things about our peers, I just like to focus on ourselves and our clients. And obviously, it’s a very strong year. Have you seen macroeconomic concerns from clients leading to a slowdown in projects that other holding companies have cited in their financial reports? To be totally transparent with you, we don’t really see any kind of slowdown. When I talk to my teams, maybe it would be fair to say that we might expect slower growth next year. But still, I’m a huge believer that our clients’ investment is having a good effect on their business. They’re not spending money just to please their communication partners. They invest money in communication and media because it’ll have a positive effect on their business. Of course, there are things we need to deal with–inflation, the rise of interest rates, which is not easy to cope [with] for everyone, depending on the industry. We also have some geopolitical crises, to say the least. So of course the environment is pretty scary, but when we talk to our clients, maybe we’ll see a softening in the investments, but nothing seems to make me think that next year won’t be a year of growth. When we start budgeting for next year, as I tell my team, I like to quote the Navy SEALs: “Expect the worst and hope for the best.” Last month you entered into a partnership with retail media network Mirakl. How that partnership will benefit your organization? Mirakl is one of the leaders in the e-commerce website space. We have seen a rise in investments in retail media. Obviously, Amazon is by far leading the category. I think Amazon owns between 60% and 70% of brands’ investments in e-commerce websites. But we see a trend from all retailers to go and invest in that space. My belief is that retail media will become the second-most invested space in advertising after digital, but before TV. So it’s very important that we continue to offer the best of the best to our clients. Those kinds of partnerships are really important to us because they can help Mirakl develop their solution of advertising on e-commerce websites, and they can help us to access the best websites in the world and offer website solutions to some of our clients. You expanded your partnership with Adobe. How is that significant? One hundred percent of our creative agencies are using AI today, mostly Dall-E and Midjourney. The only problem I see with AI is around intellectual properties and copyrights because our clients want to have the guarantee that every work we produce for them, they can use it free of rights. Havas belongs to Vivendi, which is a world leader in content and entertainment. And when I talk to Universal Music Group, Canal+ [a French channel owned by Vivendi], or people in the book publishing sectors, they all fear that AI has not been trained on free-of-rights content, and it might create a problem in the near future. So it was very important for me to partner with Adobe, because their tools GenStudio and Adobe Firely have been trained on only content that is free of rights, whether it's free of rights or they have cleared the rights. I’m always amazed when I discuss with clients the amount of their content that is not used. They tell me that between 50% and 80% of their content is wasted. They produce the content, but they don’t really use it. So the journey is how can we avoid waste? How can we be more effective in producing content and using it and also more efficient? And this is why we’re developing this strategy around responsible and meaningful AI together with Adobe. Recently Clean Creatives supported a petition to have agencies, including Havas, to get stripped of their B Corp status if they work with fossil fuel companies. You work with Shell. Can you comment? I read the petition, it’s about other groups, it’s not just Havas. I told the team that I don’t agree with the Clean Creatives and their position, but I’m a huge admirer of freedom. And I like to quote a French philosopher called Voltaire who said, “I strongly disagree with you, but I will fight until the death to make sure you can continue to express your point of view.” I have nothing but huge respect for anyone with different opinions than mine. We discussed with the executive committee about Shell when we were invited to pitch because we were aware of the sensitivity. First, I want to reiterate our mission, which is to make a meaningful difference to the world. We continue to stick to our commitment in terms of greenhouse gas emissions. We continue to say that we won’t be participating in any greenwashing, but once we have said that, the question becomes where do you draw the line? My belief is that we will have a stronger impact and a more meaningful impact partnering with every company as long as they’re engaged in the meaningful transition journey themselves. Put the emotion aside and look at what is in the Shell assignment for Havas Media. A huge majority of the assignment is about promoting EV charging stations, which is good for the world. So I’m a huge believer that the most effective change comes from within. That’s why we decided to participate in the pitch. I really want to express my congratulations to the team that has been pitching and winning because it was a fierce competition. We were not the only ones in the pitch, as you can imagine, everyone was pitching. The only ones who were not pitching are the ones who had a conflict in the fuel [industry] already. So I’m super happy that we won and we continue our commitment. I discussed [our clients] with the B Corp certification inspector a few years back, and we had the discussion because we work for those kind of controversial industries in some other parts of the world, and they agreed that as long as we are committed to making things better [we qualify]. I’m still open to dialogue and whatever happens, we will continue to commit to our commitments and our objectives in terms of CO2 reduction. Do you feel like the reaction to the account win has been warranted? I think it’s good to have these kinds of dialogues with everyone, but if I don’t agree, I think I will continue to have this dialogue with the team. Do you have any thoughts on the Wunderman Thompson and VMLY&R merger at WPP? It’s very hard for me to comment. I don’t have all the elements. So I don’t know exactly if it was working or not working. What is sure is that I’m a huge believer in integration and making things simple for clients. Clients want to avoid the complexity of our own internal organization at holding companies. So I believe the more we make it simple for people, the better it is for the clients. Do agency brands still matter? More and more clients are consolidating their businesses because they want to avoid having multiple contracts in different countries. I remember participating in a consolidation pitch for a big pharma company eight years ago in Switzerland. For the first time, they were not inviting agencies, but they were inviting the five or the six holding companies, and they wanted to move to just two holding companies. I asked the CEO, “Why are you doing this big consolidation pitch?” It was one of the first holding consolidation pitches. And he told me, “I looked at it with the team and the procurement department, and we have 3,600 different contracts with agencies around the world. So we wanted to structure and make it more simple and save money,” and it made sense. [The industry] has changed a lot. And that’s true [especially] when [clients] pitch for media consolidation they talk about Havas, Publicis, WPP, Omnicom, IPG and Dentsu. They don’t talk about GroupM or Havas Media. So I would say it’s important to keep the brands and the different agencies to manage conflict, but in the end, the holding company matters much more than in the past, for sure. Havas led the way with our village strategy. I don’t want to say that brands do not necessarily matter, because it’s not really true—especially on the creative business for some very boutique, very creative [agencies] with a strong personality. But at the end of the day, it’s fair to say that holding companies matter much more than in the past. Ad Age A-List & Creativity Awards Final deadline approaching for annual program Enter here I’ve heard predictions that next year we’re going to see more consolidation of agency rosters. Is that something you’re seeing? I think the trend is here to last in the media sector for sure. We still have some clients that like to pick and choose by country. But still, I think the trend is we will move toward more consolidation. It’s slightly different on the creative side because it’s not true that the same campaign can work in every country. Locality still matters. For example, the cultural specificities in France are not the same as in the U.K. or in the U.S. Ad Age World’s Largest Advertisers 2023 Ad spending, rankings and analysis for the top 100 advertisers Click here

Havas CEO on AI, whether agency brands still matter and why it works with Shell

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