PRINCIPAL BUSINESSES

A fragmented media landscape, growing numbers of communication channels, soaring use of Internet and the explosion of all things digital driving media convergence have combined to transform the world of communications.

These technological revolutions have changed the way people consume media and given rise to new social networks.

Havas has remained at the forefront of this change by gearing its organization to the new needs emerging in communications.

In order to rise to these new challenges, and rather than opting to confine this new digital activity to a silo, we have decided to put digital at the core of all our businesses, which are:
• Brand strategy, consulting and advertising
• Corporate, financial and Human Resources communication
• Relational, promotional and interactive marketing
• Health communication
• Media expertise

In the rapidly changing communications world, flexibility and clarityin our service offerings are essential. Havas’ size and its organization into two Business Units, Havas Worldwide and Havas Media, are key advantages.

Havas Worldwide includes the Euro RSCG Worldwide network and a number of agencies with a strong local identity: Arnold in the United States and Italy, H and W in France Palm+Havas in Canada.

Havas Media is made up of the MPG, Arena, Havas Sports & Entertainment and Havas Digital networks.

• Market and trends

2009 was the worst year the advertising industry has experienced in decades.

Forecasts were constantly downgraded as the year progressed.
Global spending on advertising in 2009, which was expected in forecasts published at end 2008 to be slightly negative, ended the year 10% down on 2008. The advertising sector has thus suffered its worst recession since 2001, when spending fell by only 3%.

Estimates for 2010 are currently more optimistic about the state of the market. The forecasts largely agree in predicting stability or even a slight rise in the advertising market (ranging from 0 to 2% growth), with the recovery being much more marked in emerging countries and on Internet.

Agency Zenith Optimedia estimated global advertising expenditure of USD444 billion for 2009 and USD448 billion for 2010.

The geographical breakdown by major region is as follows:

(1) All the market data shown in this section are taken from the Zenith Optimedia press release of December 8, 2009.


Internet is continuing its rapid expansion with an estimated +12% over 2010, at the expense of the more traditional press, magazine and radio media. With an estimated 14% share of total media advertising expenditure in 2010, Internet takes third place behind TV (around 40%) and press (around 10%) but could move into second place by 2015.

The main players in this market are the advertisers, the different media and the communications consulting groups, along with the various entities involved in the physical production of campaigns (actors/ models, directors, producers, photographers).

It should be noted that revenues of communications consulting groups are becoming steadily less correlated with media advertising spending. On the one hand, agency revenues are based more on fees than on commissions calculated as a percentage of media investment, with the exception of media buying which generally continues to operate on a commission basis. Fees are by their nature more stable (whether increasing or decreasing) than commissions directly tied to media investment.

In addition, a growing proportion of communications consulting revenues is now generated in the non-media domain (see the various communications consulting activities mentioned at the beginning of this paragraph 6.1.1).