Advertising agency holding company Havas SA is setting aside money for acquisitions in Canada, and plans to double its size here within three years.
Canada is among the top 10 "priority markets" for Paris-based Havas, said Andrew Benett, Global CEO of Havas Worldwide and Havas Creative Group, in an interview to discuss the restructuring of its Canadian operations. Havas is attempting to grab a bigger piece of Canada's roughly $11.5-billion advertising market.
"We're very bullish on Canada as a market," Mr. Benett said. "We think it's a market that not enough [advertising] networks have seen the true opportunity in. ... The economics of the market [are] a little bit flat of late, but it's still a top market. There's a strong consumer base. It's an incredibly actively engaged market from a social media and a digital standpoint, and there's terrific talent."
The world's sixth-largest advertising holding company by revenue, Havas began changing the way its agencies work in 2012, creating what it calls "Havas villages." That means bringing more of its agencies under one roof and a single management team – ensuring, for example, that Havas's advertising agencies work together with its media buying and planning agencies, or that digital experts are part of the team when needed.
The company is now bringing its village concept to its offices in Toronto and Montreal, under the management team of Ann Bouthillier, CEO of Havas Worldwide Canada, and president and chief creative officer Helen Pak, former executive vice-president and executive creative director at agency Saatchi & Saatchi Canada, who leaves her position as creative strategist at Facebook Canada.
The "village" concept is meant to address the changing demands of advertising clients, who often require expertise in many different areas, on tighter budgets.
"There's a blend that clients are demanding, where they want to see creative, media and technology together. You've seen that a lot more in the last year," Ms. Pak said. "...The days where a creative team got a brief and it said, 'You're doing a 30-second spot, or a billboard buy' – those days where everything was siloed – are long gone."
At Facebook, Ms. Pak said she met with marketers who would have three or four agency partners with them – which can result in the "splintering" of a brand's voice.
"It's more and more challenging for clients to manage all the different partners around the table," Ms. Bouthillier said. "...There's pressure on costs, so most of the teams are reducing. We want to help them."
Havas does not expect to be a one-stop shop for clients, many of whom still prefer to work with more than one agency. However, the company is hoping that by streamlining operations, it can win a bigger slice of their business.
The company has seen 15 per cent growth in New York and Chicago since the "villages" were implemented and Havas created a "superstructure" for the two offices to work in tandem, in the past year. Toronto and Montreal will operate on a similar model.
Havas has also done work on its own brands, to make its family of companies less confusing for clients. It dropped its MPG brand, uniting media buying and planning services under Havas Media Group. On the advertising side, it folded the Euro RSCG brand into Havas Worldwide.
In Canada, Havas plans to pursue acquisitions in specialty areas that are drawing more of marketers' focus, including analyzing customer data. The company will complete one acquisition likely by the end of the year; two more are already in the pipeline.
"You can get incredibly creative with CRM [customer relationship management] today, which was not considered sexy years ago. Data wasn't considered sexy," Mr. Benett said.
"At Cannes [the advertising awards festival] this past year, not only were there new categories, but many categories merged media and technology with creativity," Ms. Pak said. "Those are ideas that are seeing a lot of celebration and a lot of business success. ... We need people to be able to think broadly and across disciplines."
Havas has roughly 225 employees in Canada. By the end of next year it expects that number will climb over 300, largely through acquisitions.
The move also signals a departure: Bill Sharpe, CEO of Havas Worldwide Toronto, will be stepping down. He will work as a consultant for the company in 2015, but will no longer be responsible for the Toronto office.
Havas's major clients in Canada currently include Hershey Canada, New Balance, Couche-Tard, and Michelob Ultra.
The company says that its integrated model has brought in new business.
Havas total revenue last year was €1.77-billion ($2.5-billion). In the first nine months of 2014, the company has seen 5.8-per-cent organic growth, and net new business wins are up 41 per cent compared with the same period last year, to €1.7-billion.
"You'll see us in Canada start to expand into new and interesting disciplines with a fair amount of speed and scale," Mr. Benett said.