Bollore-owned French marcoms group Havas has just reported a nine per cent increase in 2014 profit to €140m, which is about £100m. WPP, by contrast, made £1.5bn which means that Havas is playing in a rather different division, in financial terms anyway.
But they both compete in the same markets so let’s see what their respective bosses think.
62 per cent of Havas revenue of nearly €2bn came from creative, 38 per cent from media. The company’s headcount rose by 800 although it didn’t do any noteworthy deals and Bollore is busily grouping his people in Havas ‘villages,’ to offer everything under one roof. So he’s happy and so, presumably, is father Vincent, the power behind the throne.
WPP’s Sir Martin Sorrell, despite his record profit which is one factor in a share award for himself of £36m, is being his customary old gloomyboots, citing threats to the global economy such as the struggling Eurozone, a “litany of woes” in the Middle East and Ukraine among others. He’s also worried about the continuing clampdown on agency fees and commissions from clients.
So he should be, particularly given WPP’s travails in Australia which have led to MediaCom losing business and handing back money to clients after billing them for inventory it received as a free ‘bonus’ from media owners.
But is Bollore’s ‘glass half full’ or Sorrell’s half empty the reality? Well that depends on who you are and where you are. WPP’s Sorrell is everywhere; in fact it’s spent a fortune in recent years expanding around the world – in the strife-torn Middle East and Africa as well as Asia Pacific and Latin America. The kind of problems that bubble up in the first two regions on a regular basis make trading in the Eurozone look like a walk in the park.
Havas, of course, is heavily dependent on the Eurozone along with the UK and US. But the Eurozone is looking somewhat healthier following the European Central bank’s decision to prime pump it with billions of euros. As well as the agencies mentioned above, Havas has the mighty BETC in Paris. Expanding BETC into other markets must be a priority for Bollore, even though its efforts in London came to a grinding halt after a promising start when the top management fell out.
Sometimes, arguably, it’s better to be in fewer places than everywhere. WPP really needs to keep growing everywhere around the world to deliver on its promises and that’s getting harder and harder as the world becomes less obedient to the desires of Western politicians and businesses.
For now, anyway, Bollore may be right to be smaller (not that he has all that much choice) and, consequently, ‘serene.’