It's not that there weren't signs. In the months before VW dumped the shop, its top marketing executive, Kerri Martin, hired in April from BMW Mini, demanded that work on the 2006 Passat be redone, making Arnold scrap the TV ads it had crafted in favor of the kind of online, viral and events work she's known for at Mini. She even gave the account team, as well as VW staff, a crash course in nontraditional marketing, asking them to read buzz-marketing tomes such as Seth Godin's "Purple Cow."
Yet when Arnold Chairman-CEO Ed Eskandarian got the news Sept. 6 from Volkswagen Exec VP Len Hunt, he had less than an hour to tell his employees about the forthcoming punch in the stomach before a press release hit the wires announcing the move. The Volkswagen staff found out roughly the same time. (Only a month earlier, Mr. Hunt, told Advertising Age Arnold was "pretty safe" on the account.)
By week's end, it was announced that Mr. Hunt would be shipped back to England, essentially swapping jobs with Adrian Hallmark, the sales and marketing chief at the VW-owned luxury brand Bentley.
The agency shift was unusual for being both a shock and something in retrospect that could have been predicted by any industry oddsmaker. It's rare for a marketer to eschew a review and move an account worth hundreds of millions of dollars from Boston to Miami overnight. But then there's the marketer's major sales slump, the sense that Arnold's "Drivers Wanted" campaign was a far cry from its award-winning heyday, and, of course, the presence of Ms. Martin, who had been marketing-communications manager at Mini. "We weren't thinking everything was just dandy, but we weren't aware they were ready to do a move like this so quickly," said Mr. Eskandarian.
Now, the Havas agency will be concerned with mitigating the damage. Layoffs are expected, but it's hoped that the 100 or so staffers who work on the account can be shifted to other business, such as Arnold's most recent big win, Radio Shack. It's estimated that revenue from the account is 10% to 12% of its overall revenue of just under $200 million, according to executives familiar with the matter.
As for Mini, BMW has not said whether it will put the account in review or move it to another agency.
Ms. Martin, who was hired at VW as director-marketing development and now holds the title of director-brand innovation, took her massive marketing budget to a shop known for creating media-neutral ideas that reach consumers through unexpected channels. With Volkswagen, Crispin is responsible not only for shaping TV ads, but also leading media planning, online creative, CRM and events. "One of things we talked about early on was the experience we had in engaging with brands and helping them reconnect with pop culture," said Crispin CEO Jeff Hicks. (Last week, his agency also picked up Coca-Cola's Sprite business, following a shootout with incumbent Ogilvy & Mather.)
Mr. Eskandarian said his executives had no idea Ms. Martin was in discussions with Crispin executives, who themselves had to walk a fine line because their contract with BMW Mini forbade them to work with other car companies. Another executive at Arnold, however, said the agency had gotten wind of the talks before last week. Ms. Martin "had it in for us," she said. "We didn't get the courtesy to re-pitch. ... Our biggest sin is we're not Crispin."
Arnold, which just last month named a new account director for Volkswagen, was at the time of the account shift preparing to publicize new work for the Beetle that breaks today, spots touting the car as a "Force of Good," a tagline that's hard not to look at with some irony. The Beetle program is also employing a guerrilla-marketing strategy Crispin would be proud of, with Beetle "ambassadors" feeding parking meters and handing out coffee and juice among other good deeds. When the move was made, Arnold's staff was still in the process of editing some of the seven Passat spots it ended up producing after Mr. Hunt, who had been pounded by dealers for not spending enough on TV, ordered them up.
"We were hoping those would help sales," said Mr. Eskandarian.
Ms. Martin said Arnold's Passat blitz wasn't changed and that TV was always part of the schedule.
Arnold, which has tried to return to its creative roots after a failed bid at becoming an international network, will have to try to replace the financial and brand luster a massive auto account like Volkswagen lends an agency. Last week Mr. Eskandarian, who not long ago could bask in the not-pale glow that comes from creating best-in-class auto ads, found himself shilling for a new ride.
"Car wanted," he said.