What you need to know 

• Havas has doubled its presence in the Melbourne market with the acquisition of creative production and media shop, Hotglue.
• The indie agency is one of 60 acquisitions made by the French Holdco this year, per Havas Media Network Australia boss, Virginia Hyland. 
• A proponent of the integrated model since its 2010 launch, Hotglue will plug right into Havas' end-to-end offering, and it's bring its deep social and content expertise with it.
• The agency will be merged into Havas' Melbourne media arm, with its three co-founders to take the helm, but in practice Havas says the village model means there's no longer hard rules over who does what. 
• For Hotglue the move unlocks the tech and resources needed for its next phase of growth, and co-founder Lewis Hearn says the two businesses together will be well positioned to take on the bigger players in the Melbourne market. 
• It's only the beginning of this latest acquisition push for Havas, and as the agency looks to pad its capabilities, Hyland says she's still on the hunt for shops in the CX and e-commerce space. 

Havas is well and truly on the acquisition path, as the French Holdco moves to build out it’s end-to-end chops and double down on its consolidation plans.

Melbourne-based independent Hotglue accounts for just one of the sixty new global assets the group has acquired in the last year, Havas Media Network Australia’s chief executive, Virginia Hyland, tells Mi3.

The digital media and production hot shop brings across its circa 50 team members to Havas Media’s Melbourne operations, bringing significant fire power to the unit, which post-merger will comprise 65 staffers. Collectively, Havas’ Melbourne presence will now total 120 talent across media, creative, PR, health and digital project management.

Over the next four weeks, the two teams will be fully integrated, with Hotglue’s three founding partners - Nick Smith, Lewis Hearn and Matt Hearn – to take the helm of the bolstered Havas Media Melbourne team. If all goes to plan, they’ll be joining the broader Havas Village in a new, and much bigger, Melbourne office within the next two months.

But as much as the merger is a play to build scale beyond the group’s Sydney stronghold, it’s also a nod to client demand for a more integrated service model.

Hotglue has been slinging an end-to-end offering since it first set up shop in 2010, with the three founders representing the core service verticals: creative and production, media planning and buying, and social media. Per Hyland, the firm’s digital lean will help plug a few gaps in Havas’ existing social and content offering.

“We saw this amazingly integrated business that already was thinking about solving markets problems, and how to engage with consumers.” she says.

“From a media perspective, Lewis has fantastic capability and credibility in the Melbourne market. Nick drives all the social media, content and influencer management for clients, which is something that the Havas Media team need more support in, in the Melbourne market. And Matt, who is an incredible creative producer, a director of film, and really has a unique proposition that we don't have in another market in terms of our ability to create ideas [across channels].”

Of course, those services don't all fit neatly under the media banner, but Hyland says the Havas village model goes beyond the siloes, so capabilities can flex accordingly. "We're not so concerned about who does what, you know, we're all one Havas at the end of the day". 

Meet cute

Havas hit the local market in search of its next indie prodigy in early 2023, aligning with global efforts to expand its footprint and capabilities via an aggressive acquisition strategy.  

In September the PR arm of the business struck up a deal to buy Australian Public Affairs (APA), and by the end of the year industry whispers were pointing to media being next on the list.

Hyland, who took the helm of Havas Media Network after the business acquired her own indie media shop in 2020, says she “went on the hunt personally” to find the right candidate. No third-party deal advisor was involved.

Bringing in a third-party is “fine” when it comes to things like legalities and financials, per Hyland, but going direct to market made it easier to judge chemistry with prospective teams – and chemistry was a priority.

“Do we fit together? Can we work together? Because it's kind of like marriage. You start to talk to each other like on a casual date, and then it ends up in a marriage,” she jests.

After Hyland connected with Hotglue mid last year, it was her experience as an indie founder that sealed the deal. “She was kind of able to coach us from the opposite side of that fence,” says Smith.

Unlike the other globals that had approached the agency in the years since Covid, Lewis Hearn knew from the first conversation that the two businesses could “come together and be a, really a key player in the Melbourne market”.

“You walk out of some of those meetings and go, we're so far apart in terms of what we believe in and what they believe in, from a business perspective and a people perspective,” he says. But with Havas, “it was pretty clear from that first conversation” that those values were aligned.

“The really appealing thing was the fact that we were going to still be able to control what happens here in this market…We’ve got a lot to offer, we've got a lot of value to add, and our journey certainly hasn't finished.”

It’s a philosophy of “big agency expertise with independent agency care”, says Lewis Hearn, rather than “we're going to swallow you up into a multinational and then spit you out looking like something different”.

Acquisition drive

For Hyland, its Havas’ respect for agency founders that sets it apart from other multinationals. “They didn't want to just buy my business and get rid of me," she says of her own acquisition experience.

More than that, Havas wants to replicate the energy and agility of the independent spirit, bolstering it with the scale, data and tech of a Holdco.

“There something great about indies, they're hungry, they're ready to listen to a client’s problem and creative a new solution,” per Hyland. The key, she says, is to scale those capabilities without flattening what made them successful in the first place.

“When you’ve got indie owners, talking to other indie owners, respecting that DNA and that culture that's been built, it's a completely different mindset,” she continues. “It's quite rare. I don't know many global companies that allow you to do that.”

And if it seems like Hyland might be trying to sell Havas to the indie market, it’s because she is.

“We're still looking for some fantastic indie talent in different pockets, whether it's around CX or e-commerce. We aren't stopping in terms of growing this model."

Scaling integration

While the challenges of today’s marketer have favoured the end-to-end model, it wasn’t always such an obvious choice. As such, Smith says that it took several years for Hotglue’s model to get traction, and it wasn’t until the last five to six years that the agency “really took off”.    

After fourteen years in markets, it’s clear that the co-founder’ inklings have paid off.

“When we set up the company, we saw in 2010 that digital video was going to dominate in the future, and that’s one of the reasons we set it up the way that we did,” explains Matt Hearne. “We never actually structured our agency to compete [with] or try to be like a creative agency with the big brand commercials or anything like that,”

The way Lewis Hearn frames the merger is akin to two underdogs joining forces to take on the big guys in the Melbourne market. “I think individually, we probably didn't have the firepower to scale on our own, but together, I think it's a pretty powerful combination, and something which is quite unique in terms of what we offer in Melbourne," he says.

Likewise, Hyland says Havas sees itself “as very much a challenger”. In June, the Holdco rolled out its new AI-powered Converged operating system, at the same time committing €400 million over four years to data and tech developments to progress the Holdco’s integrated strategy. It's evidence Havas is willing to punch above its weight, with the investment comparable to the €300 million Publicis Groupe – six times Havas’ size on an annual turnover basis – has sidelined for AI investment over the next three years.

While the Converged announcement landed late in the piece, it exemplified for Hotglue's founders the upside of marrying into a multinational group.

“As an indie there's no possible way you can ever compete with that, right?" says Smith. "You can buy platforms and bits and pieces and kind of bolt them all together in a cobbled together sort of way… That is obviously one of the main draw cards to wrapping business up with Havas group.”

It’s a boon for Hotglue’s clients too, and already the agency’s existing roster (which includes L’Oreal, Mountain Top, Dulux and La Trobe Financial) have been eager to learn how they can access the Havas offering.

For Hyland, the Hotglue's success to date if proof the end-to-end strategy is landing with clients. "This is the model that is going to get more and more traction as time goes on, with marketers under more pressure than ever before to report to their stakeholders and CEOs how they are driving results quicker, with less money, less team members and [more] pressure."