NEW YORK (AdAge.com) -- Heading into 2010, Arnold was predicting revenue for the year would drop 20% compared with 2009, after a string of clients, including GlaxoSmithKline, RadioShack, Choice Hotels and Citizens Bank, all walked out the door.
But early forecasts proved unreliable. Starting in January of last year, the Havas-owned agency not only stopped bleeding accounts, it started winning them -- 18 of them to be exact. On top of solid organic client growth, Arnold brought in some $700 million in fresh billings, and instead of closing out the year down, it was up 5% in U.S. revenue.
That Arnold managed to whip itself back into shape so quickly serves as a valuable reminder to adland that despite the headwinds of ever-shortening CMO tenure (and client cutbacks), improved focus and confidence in your existing resources can yield great dividends.
Guiding the turnaround was Andrew Benett, a former Euro RSCG senior exec installed last year as Arnold's new CEO, replacing longtime head Fran Kelly. "Andrew has taken it to another level from a global perspective and expanding new business," said Michele Buck, chief marketer at Hershey's.
Mr. Benett -- who says he was lucky to inherit a good company -- inked a deal with U.K. agency KLP last year and is embarking on an acquisition hunt in Brazil and Australia in the first quarter. He plans to make a buy in Shanghai in the second half of 2011.
But he's been focused on domestic success too; one of Mr. Benett's first tasks was to assess and play up the strengths of each of Arnold's U.S. offices. Borrowing from the management-consulting world, which establishes centers of excellence by competency, he etched out a plan for each office. Arnold's Boston headquarters is now the hub for big retail accounts such as McDonald's, Pearl Vision and CVS, and for financial services, including Fidelity and Progressive . New York is known for consumer packaged-goods accounts, such as Hershey, Alberto Culver, and health care, with Aetna; and its Washington office is the center for corporate branding and public affairs.
In each of those offices, the same giant gilded frames proudly decorate the walls, containing charts of their clients' stock price and market share. It's fitting, given what clients including Volvo, Ocean Spray, Southern Comfort and Progressive say about Arnold's knack for work that moves the needle.
"Every single campaign they have created, once we put it on air, tests well, said Ms. Buck. "But more importantly, it works. We had the strongest retail takeaway with consumers in 2010 that we've had in years."
For Kit Kat, Arnold refreshed the candy bar's famous jingle and planned targeted blitzes around Halloween that resulted in 40% growth, according to Hershey's Ms. Buck. "I don't think in my career I have ever seen that kind of response, and it's a big business, worth over $300 million." More recently, Hershey has upped its marketing spend in stagnant brands, asking Arnold to bring Hershey's Syrup and PayDay candy back onto the air.
"During the pitch process, they spent a substantial amount of time really verifying that they understood our business," said Rob Price, senior VP-chief marketing officer for drugstore chain CVS, which chose Arnold as its new creative agency this past May. "The level of thoughtfulness that goes into the partnership [with Arnold] is really refreshing. I find no conversation is wasted time. It's a combination of being deeply prepared and being naturally passionate and curious about the business."
Jim Berra, CMO at Carnival who has worked with Arnold for two years, gives kudos to the shop for doing a "great job of refining our positioning and giving us a clear voice in the marketplace."
Mr. Berra landed at the cruise line shortly after Arnold had been named to the account, but tellingly, he saw no need to put his stamp on the company by making an agency change. Rather, he knew Arnold could help him get to better know the company.
"They're not afraid of failure, which is part of our culture, too."