Arnold, EMC “Restructure” Their Relationship

BOSTON — Arnold and EMC have “restructured” their relationship “in light of economic reality,” a representative from the data storage company said on Monday.

The representative did not elaborate, but essentially, EMC revised downward its projected 2002 ad spending and has renegotiated a lower retainer with Arnold, sources said.

The move comes as little surprise, given EMC’s mighty economic struggles in recent months — and may spell the beginning of the end for the two-year relationship, sources said.

Changing shops or pulling some work in-house is being considered, sources said, though the representative strongly re-affirmed the client’s faith in Arnold and stressed that no review or change of agencies is imminent. EMC is currently planning new ads for 2002 with Arnold, the representative said. Arnold spokeswoman Rebecca Sullivan said the restructuring will have little impact on the day-to-day client/agency relationship.

Arnold had banked on EMC launching a major marketing push in 2001 and expected the client to spend in excess of $50 million on domestic ads in 2001, making it one of the agency’s largest pieces of business, sources said. Through the first eight months of this year, EMC spent about $15 million — far less than had been expected, though that amount is more than double the company’s expenditure for all of 2000, according to CMR.

Arnold in March broke a global image campaign extending EMC’s “Where information lives” positioning. The special effects laden, cinematic commercials — featuring astronauts, dinosaurs, cavemen and the “EMC Orb,” a sphere of video monitors –were intended as a visual manifestation of the positioning line.

When the agency, a unit of Havas Advertising, twice cut staff this years, sources both times cited less-than-expected EMC spending as a factor.