Volvo's Agency Review Could Expand to Include Arnold's U.S. Business

BETC Takes Lead on Havas' Pitch for Account

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Volvo Cars' global agency search has taken as many hairpin turns as a racetrack.

What started in June as a review aimed at consolidating the automaker's agency relationships around the globe but was explicitly stated to not include the U.S., could now expand to include the $50 million U.S. creative account held by Havas' Arnold Worldwide.

It's a sign that the 86-year old Swedish auto brand, now owned by China's Zhejiang Geely Holding Group, continues to look for efficiences. The automaker had earlier used a "Team Volvo" structure -- a popular approach for car advertising -- that was an alliance between three agencies: Arnold Worldwide, SapientNitro and what was then called Euro RSCG 4D. But in 2011 it consolidated that approach and moved all of its business in the U.S. to Arnold.

The latest review, which came amid changes in Volvo's marketing suite, could mean further consolidation of Volvo's external partners. To put its best foot forward, Havas is using BETC, London, to lead the ad holding company's Volvo pitch, according to an executive familiar with the review. It's getting assistance from Boston-based Arnold. Both shops declined to comment.

The car maker wants a "new business partner rather than a new agency," said Tomas Caetano, Volvo's VP-global brand marketing. The winner will be asked to "translate our vision into a new brand experience and brand behavior," he said. Mr. Caetano succeeded Richard Monturo, the former VP-global marketing at Volvo, in June.

Since kicking off the search in June for global creative that could be adapted by regional agencies such as Arnold, the car maker cut a massive list of interested agencies -- as many as 200 -- to 10 official contenders. six were invited to pitch the business. After the first round of meetings, it narrowed to four semifinalists. Volvo is expected to shortly cut the list to two finalists. Each will put its proposed campaign into test. Mr. Caetano said the company is aiming to pick a winner by November, he said.

Outspent By Competitors

The Volvo brand has long defined safety and reliability. But it is being heavily outspent ad-wise by bigger European auto brands such as Mercedes-Benz, BMW and Audi.

To regain its marketing mojo, Volvo is studying a variety of ways to handle its marketing on a global and regional basis, said Mr. Caetano. As part of its search, Volvo has talked to "small boutique agencies as well as global networks just to find the right setup."

Mr. Caetano said Volvo's far more interested in the names of the agency executives who would work on its account -- rather than big name agencies: "Sometimes you have great names of agencies. But the good guys have left already. You buy an empty house."

Volvo has been using a search consultant to sift through agencies, Mr. Caetano confirmed. But he declined to name the firm. Gary Stolkin, CEO of The Talent Business in London has been overseeing the review, said the executive. Mr. Stolkin declined to comment via e-mail.

More Management Changes, Sales Drop

Volvo Cars of North America just had a management shakeup, with Tony Nicolosi named acting president and CEO on Thursday. Nicolosi, former president and CEO of Volvo Car Financial Services US, replaces John Maloney, who left the company.

Volvo's U.S. sales dropped 7% over the first nine months of 2013, according to the Automotive News Data Center. That tied Volvo with Nissan's Infiniti for worst sales drop over that period among major auto brands. Volvo's sales grew 1% last year to 68,117 units. But that was less than half of Volvo peak U.S. sales year of 139,067 units in 2004.

Still, Volvo's U.S. problems have resulted as much from lack of new vehicles than anything else. The auto maker has high sales hopes for 2014 when it rolls out a new V60 sports wagon and a successor to the XC90 luxury crossover SUV

With new models finally on the way, Volvo is priming the pump with increased ad spending. Volvo spent $40.2 million on measured media through June 30 compared to $50.4 million during all of 2012, according to Kantar Media.

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