Havas Becomes Marketing Services Powerhouse With $2.1 Billion Snyder BuyHis title won't change, but Patrick Lemarchand, chairman/CEO of the North American division of Havas Advertising's Diversified Agencies unit, practically found himself in charge of a new business model after the announcement that Snyder Communications, Bethesda, MD, had become part of the company following an all-stock transaction valued at $2.1 billion.
The industry's latest trans-Atlantic marriage makes Havas Advertising, Levallois, France, the world's fourth-largest agency conglomerate and one of North America's most formidable new marketing forces. Before the merger, more than half of Havas Advertising's global profit margin was derived from providing traditional advertising and branding deliverables. But with the purchase of Snyder, Havas is expected to realize far more - more than 60 percent - of its total revenue from marketing services, nearly half of which will now be derived from its U.S.-related business interests.
"It's quite a significant change," said Lemarchand. "Clients see how large we are becoming, not only in the world, but in the states as well."
As a giant new marketing darling, Havas Advertising's Snyder acquisition came complete with the traditional advertising agency Arnold Communications as well as direct marketing specialists Brann Worldwide and Bounty SCA Worldwide and Internet service provider Circle.com.
Havas already owns Euro RSCG Worldwide, but the firm said it plans to make Arnold the lead agency in its Campus division while bringing targeted research and tracking shop Bounty SCA, Glenview, IL, under Euro RSCG. Brann Worldwide and Circle.com will become part of Havas' Diversified Agencies Group, and Circle.com will continue to have an independent tracking stock.
According to Lemarchand, no labor cutbacks are expected.
"When it comes to the North American division itself, there's no change I can see coming regarding staff changes. I could only see additions at this point."
He said the firm's new tilt toward marketing services, customer relationship marketing and an expansion into e-commerce doesn't mean that traditional advertising ideas (or companies) are becoming history.
"No doubt things are changing fast everywhere," he said. "But that means you have to demonstrate for your clients that you are always on top of what's next. It's a world where clients expect you to be informed about the front end, the back end, the technology and the [implementation] of it, with resources across the board."
When asked if Havas would pursue new business in the marketing services arena along with the growing trend of incorporating revenue-sharing models as part of clients' contractual agreements, he said, "I don't have a crystal ball, but being a little edgy in anticipation of what your new clients are going to want next doesn't hurt."