- Red Havas, the 230-person PR arm of the ad holding company Havas Group, was forced to shift gears when the pandemic hit.
- It's reduced its practices to focus on the areas where clients are still spending in the downturn as they try to boost online sales and communicate with employees in lockdown.
- These shifts have helped Red Havas make up losses in seasonal campaigns and events, its CEO said.
- But the outlook is uncertain as coronavirus cases rise, shrinking the job market and people's disposable income.
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Red Havas, a PR arm of the ad holding company Havas Group, used to have nine practice areas ranging from consumer PR to travel and tourism.
But with clients slashing spending in the pandemic, 230-person Red Havas had to make a sharp pivot. It reduced its those practice areas to four to focus on growth areas — health and wellness; business-to-business and person-to-person; purpose, cause, and change; and consumer and lifestyle — and eliminated standalone practices for areas like food and beverage and travel and tourism.
The agency also rolled out corporate communications and related services as clients sought help telling shareholders and employees how they're responding to the pandemic.
These four practices and specialty offerings have helped Red Havas make up much of its losses in seasonal campaigns and events, CEO James Wright said, adding that no layoffs happened as a result of the reorg. For example, the health and wellness business is up 30-40% in some regions since the start of the pandemic, Wright said.
Red Havas is also doubling down on areas outside traditional PR, like e-commerce, content production, social media strategy, and social media ad buying.
"This isn't about losing clients, but clients reducing revenue spend, so we have to be ready to move," Wright said. "Where we have had traditional PR revenue dip, we have made it back in social, content and data services."
Havas Group's entire global PR business reported $225 million in revenue, according to ProvokeMedia.
Red Havas' revenue is down for the full year, but the firm kept profits strong by cutting costs like marketing and travel. It's also been helped by new business from clients like Helen of Troy and Jaguar this year and a recent uptick in business as clients try to boost their fourth-quarter sales.
But the outlook remains uncertain as coronavirus cases rise, shrinking the job market and people's disposable income, Wright said.
"I'm very confident, but we need to be wary," Wright said. "Anyone with experience running an agency knows you're three to four phone calls from disaster. Those calls might come closer together than previous times because we're in different times."
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