Havas continues turnaround under Bolloré

By Carlos Grande in London

The two dominant French marketing groups experienced mixed fortunes as Havas recorded its highest organic revenue growth in six years but Publicis saw a slowdown.

Havas continued its turnround under Vincent Bolloré, its chairman who also heads the largest shareholder in the group.

After the Paris market closed, it reported a 4.4 per cent rise in organic revenues for the first six months of 2007. During the second quarter, Havas grew by 5.4 per cent, its fastest rate since 2001. At constant currencies, total revenue rose a modest 1.3 per cent to €729m ($1bn).

In both the US and UK, Havas returned to growth thanks to wins by Euro RSCG, the group’s advertising agency, and non-advertising revenues from North American clients.

At Publicis, campaigns cancelled by pharmaceutical clients and the delayed impact of account losses last year brought the rate of organic revenue growth down to 1.6 per cent in the first six months.

The figure is a far cry from the 6.8 per cent organic revenue rise Publicis reported in the first half of 2006 and a step down from a 3 per cent growth rate in January to March.

In Europe and the US, the two major markets for Publicis, owner of the Saatchi & Saatchi and Leo Burnett advertising agencies, organic revenues actually declined in the second quarter.

The group said organic revenue growth for the full year would now be 4-5 per cent whereas in May it predicted growth in "the order of 5 per cent".

The revenue figures were worse than expected although analysts said operating income of €331m (€312m) was in line with expectations. Staff costs also rose 8 per cent – faster than revenue – owing to the increased costs of hiring people to work on digital campaigns.

Maurice Lévy, chairman and CEO of Publicis, said: "There is less available talent in digital, it is more difficult to hire people from there than in classic advertising sectors."

This year, Publicis bought Digitas, a US digital, direct and healthcare marketing group, in a $1.3bn deal.