Havas Reorganization Unveiled

BOSTON — Brann Worldwide, a relationship marketing shop with about $1 billion in billings, on Thursday was shifted into Arnold’s worldwide network as part of a major reorganization undertaken by No.5 agency holding company, Havas Advertising.

Paris-based Havas in October began dismantling 70-shop Diversified Agencies Group in an effort to save $120 million over the next two years. Most of the DAG holdings, mainly direct marketing, public relations, design and interactive agencies, have been reassigned to Havas’ three other networks: Arnold in Boston, Euro RSCG of New York and Media Planning, Barcelona.

“I am confident that this reorganization will enable Havas Advertising to rebound as from 2002, by developing both its organic growth and its profitability, with a mid-term objective of 15% EBIT/revenue margin,” said Havas chairman and CEO Alain de Pouzilhac in a prepared statement.

About 55% of DAG has been directly integrated into the three remaining Havas networks. About 36% of DAG will indirectly serve the networks, operating as independent agencies in three specialized sectors: public relations, marketing support and human resources communications. The fate of the remaining 10% or so of DAG has yet to be determined.

Brann, Wilton, Conn., by far the largest DAG agency, accounting for perhaps 40% of the unit’s billings, will now report to Havas through Arnold. Also joining Arnold’s network are ehsrealtime, Steam, Conran Design, and AMX, all U.K. marketing agencies; U.S. public relations shop Magnet; and French marketing shops W Group and Le Nouvel Eldorado. Arnold’s overall global network billings now double to nearly $6 billion.

Euro RSCG — which claimed some $15 billion in global billings before the reorganization and was viewed by Havas as requiring less buttressing than Arnold — counts design shop Pulp and interactive agency Connectworld, both in France, as its major additions.

Media Planning picks up Havas Sports Marketing, a European sports marketing and media company, as well as the media branch of All Response Media, which is based in the U.K.

Supporting all three networks are some 20 former DAG agencies including public relations shops AMO, Hudson Sandler and the Grayling Group; marketing agencies Skygridge and Contact; and human resources communications shops Reilly, Heist, EMDS and The Link.

The holding company yesterday reported revenue of approximately $1.4 for the first nine months of 2001, an improvement of 3% compared with the same period a year ago. Havas endured an especially bad third quarter, posting revenue of $400 million, a 4% drop from the same quarter in 2000. Those numbers are adjusted to exclude acquisitions and currency fluctuations.

The company predicted growth in the fourth quarter and early-2002, given the volatility of world marks, “close to zero percent” with an EBIT margin between 10% and 12%.