Last week, Andersen Consulting filed for divorce from accounting giant Arthur Andersen, citing "breaches of contract and irreconcilable differences." It is asking an arbitrator to rule on a way to separate from the sibling and parent Andersen Worldwide.
Since Andersen Worldwide created Andersen Consulting in 1989, the operation has grown to become the world's largest management consultancy; it is now larger than the accounting unit.
NO. 7 IN CONSULTING
Arthur Andersen, expanding beyond its slow-growth market, set up its own business consulting practice in 1994 and last year ranked No. 7 in the business, according to Management Consultant International.
Arthur Andersen also has racheted up its marketing, boosting first-half '97 U.S. measured ad spending to $4.4 million, just behind Andersen Consulting's $4.5 million, according to Competitive Media Reporting.
Jim Murphy, worldwide managing director of marketing and communications at Andersen Consulting, said he does not expect the public feud to cause any concern among clients; fewer than 5% of Andersen Consulting's clients use Arthur Andersen for tax or audit services, he estimated.
But he acknowledged some confusion will continue in the marketplace because of the similarity of the two names; both intend to keep the Andersen name regardless of a breakup.
"We will continue to build our brand as we have" during the six months or more arbitration process, Mr. Murphy said. "And if the arbitration is successful, it will just allow us to differentiate ourselves even more from Arthur Andersen."
Mr. Murphy said his company's ad spending will grow some 25% to 30% a year in coming years as it helps drive a boom in professional services advertising. Mr. Murphy estimates total global spending in that category at about $300 million, not including an estimated $400 million in corporate ads from IBM Corp., a big force in tech consulting and services.
On Jan. 3, Andersen Consulting begins the next wave of its TV campaign, launching a new spot called "Birds."
Andersen Consulting will run complementary print ads in 30 countries and TV in key countries. Two-thirds of its budget will be spent outside the U.S.
Print will receive the majority of spending.
Next spring, Andersen Consulting will launch a revamped corporate Web site