Arnold's 175-person media department will remain quasi-autonomous and under the direction of agency managing partner John Gaffney.
The unexpected development runs counter to parent company Havas Advertising's strategy for its other U.S. agencies' media units, which are being absorbed by the domestic arm of Havas' Media Planning Group.
Effective Jan. 1, Arnold's media group will be rechristened Arnold MPG and allowed to operate with a large measure of operational independence in terms of planning, negotiating rates and pitching new business. Gaffney will serve as Arnold MPG's president and report to Antoni Rossich, CEO of Media Planning's U.S. operations. Gaffney had reported to Ed Eskandarian, chairman and CEO of the Arnold agency network.
The unit's launch is viewed by some as the latest act in a drama that began unfolding two weeks ago, when Rossich predecessor Steve Farella was ousted after being told the company was seeking a change in direction. Contributing to Farella's departure were heated disagreements with executives at several Havas agencies—including Arnold—about their media departments being integrated into Media Planning, sources said. Rossich could not be reached for comment by press time.
Arnold executives apparently insisted that several large clients feared rates might rise and their level of service suffer if their business was shunted off to a large conglomerate. Arnold handles more than $1 billion in media billings for clients such as Volkswagen of America and Royal Caribbean.
Even though Gaffney and Eskandarian insisted there was no serious tension over Havas' integration plan, the latter noted, "Our clients said they wanted to get the same service from the same people. And, this way, conflicts aren't an issue." He added: "This way, we don't lose the things we have. And everything else [in terms of Media Planning's global reach and systems] is a gain."
Industry observers said that keeping Arnold's media group somewhat outside Media Planning weakens the ability of both to increase their competitive standing.
But Gaffney disagreed. "New business opportunities would come our way at times, but we could never aggressively pursue it on our own. That's all changed now," he said.