A new era in Arnold’s evolution begins today, as the Boston-based Havas agency seeks to recast itself as a worldwide micro-network with new global CEO Andrew Benett, a Euro RSCG veteran, at the helm.
Fran Kelly, a 16-year Arnold veteran who has served as chief executive since 2006, moves to vice chairman. Ed Eskandarian remains worldwide chairman.
Benett, 38, joins from Arnold sibling shop Euro RSCG in New York, where he has been co-CEO — teaming with Jeff Brooks — and strategy chief for the agency’s 230-plus office global network. Brooks remains co-CEO. Pete Zillig, president of global brands, currently based in London, will relocate to New York to fill Benett’s slot as co-CEO. Euro RSCG has yet to name a new global strategy chief.
David Jones, CEO of both Havas Worldwide and Euro RSCG, praised Benett as the right leader to turn around Arnold. “Under his leadership, the profile and size of the New York agency have grown substantially,” Jones said. “He’s both a truly global player — key to our ambitions for Arnold as a global micro-network — and very strong strategically. [Plus] he and I work very effectively and well together. I hired Andrew over five years ago and we have worked very closely together over that time.”
During that period, Euro RSCG’s New York operation has grown by nearly 100 percent and won assignments from Jaguar, NYSE, Hyatt, Kraft and Heineken, the shop said.
Conversely, Arnold has slipped, especially in the last 18 months during the height of the global economic downturn. It lost key clients — most recently RadioShack, Citizens Bank and Choice Hotels — and came up short in numerous high-profile reviews, such as contests for UPS and Expedia. Of late the agency has gained some momentum, however, adding Panasonic in December and Mike’s Hard Lemonade as 2010 began.
Still, such wins were rare bright spots in an especially rough stretch. Per sources, Arnold’s revenue fell at least 10 percent in 2009 to an estimated $235 million, and it suffered several rounds of layoffs and also imposed salary cuts. (Some would say the decline began in late 2005, when longtime marquee client Volkswagen of America shifted its business to Crispin Porter + Bogusky after a decade at Arnold. Most in Boston’s tightly knit ad community believe Arnold never recovered from that blow.)
The agency currently employs about 600 staffers worldwide, down almost 20 percent from a year ago. Two years ago, Arnold’s overall staffing was about 800.
Despite Arnold’s recent poor performance, Benett is bullish on the firm’s prospects for the future, noting the cyclical nature of the agency business and the fact that the shop has a seasoned, talented staff in place.
“Arnold is one of the great brands in advertising, I really think it is, especially in U.S. advertising,” Benett said. “It needs some dusting off … a shot in the arm.”
Recasting Arnold as a highly integrated micro-network is the key, and Benett will attempt to build the kind of operation that can handle — across its own offices and in tandem with Havas’ broader resources — both global assignments and significant regional work.
At present, Arnold’s three domestic units — Boston, New York and McLean, Va. — constitute its core operations, though it also maintains satellites in London, Madrid, Milan, Prague and Lisbon.
Getting those offices to work together more effectively and efficiently is a key — and Benett has practical experience in such matters. Working with co-CEO Brooks, he oversaw the fusion of digital shop Euro RSCG 4D with the main agency and helped streamline operations so that the two would work in tandem.
A decade ago, Havas tried to mold Arnold into a global force, but the effort never jelled. This time around, however, there are far fewer offices to get in sync, and the micro-network positioning seems more realistic than an attempt to grow Arnold into a full-blown worldwide operation like Euro RSCG.
Chris Colbert, CEO of Boston independent Holland Mark and a former analyst and longtime player on the local agency scene, questioned the feasibility of a global/local network strategy.
“Creating a global micro-network feels like a theoretical strategy to rationalize a current accidental construct and/or play both ends of the game,” he said. “I don’t know too many client organizations that are seeking such a creature.”
Hiring a senior executive to oversee integration and subsequent operations is not out of the question, though Benett stressed: “I genuinely have no intention to clean house or make meaningful changes” among existing managers.
“There’s a great team in place,” he said. “I’m impressed with the talent here.”
That said, he might add to the management ranks, “bringing on impact players” in areas like brand engagement and planning.
Benett said Paris-based Havas is committed to growing Arnold; he denied that Euro RSCG would ultimately absorb its sister shop’s brand and operations. “It wouldn’t make sense for us,” he said. “It’s still our second network and there’s no value or reason to subsume it under Euro RSCG.”
Jones added: “If you look at one of the most successful and exciting areas of growth in our industry over the past few years, it has been the success of the global micro-network — from BBH to Wieden to Fallon to Mother — so we have big ambitions and aspirations.”
Even so, Arnold has grown somewhat less autonomous of late. A year ago, that agency and all Havas creative units — including digital, design and marketing shops — were realigned to report to Jones as part of an umbrella group called Havas Worldwide. Those shops represent roughly 70 percent of Havas’ annual global revenue. The other 30 percent comes from Havas Media, which includes MPG.
Benett moves to Boston this summer. He said Kelly would remain “extremely involved” in operations as vice chairman, continuing to work on various client businesses and prospecting for new accounts.
Kelly, 53, is known to have strong ties to key clients at Fidelity, Hershey and McDonald’s, among others, but he declined to say which assignments he works on day to day.
“I’m genuinely excited about it,” he said of Benett’s arrival. “He’s a great CEO and he also has the digital and global skills that are important to our company.”