Hershey Ends 12-Year Relationship With Arnold Worldwide

By Imani Moise Features Dow Jones Newswires

Hershey Co. is consolidating its creative ad agency accounts, the latest example of how companies are reassessing their marketing needs amid industry headwinds.

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The chocolate maker said Friday it will end its 12-year relationship with Arnold Worldwide, while it maintains existing partnerships with Crispin Porter & Bogusky and Anomaly.

Arnold, a 71-year-old agency that is a unit of holding company Havas SA, landed the creative work for chocolate brands including Hershey's, Reese's and Hershey's Kisses in 2005, according to Ad Age. Arnold will continue working on Hershey's brands through the end of the year, Hershey said.

The changes will "enable Hershey to excel with engaging, brand building creative campaigns and evolve our modern marketing capabilities with best-in-class practices," said Ronalee Zarate-Bayani, Hershey's head of integrated marketing and digital, in prepared remarks.

Anomaly also handles accounts for Campbell Soup Co. and Coca-Cola Co. CP&B also works with firm such as Domino's Pizza Inc., Kraft Heinz Co. and PayPal Inc.

A representative from Arnold didn't immediately respond to a request seeking comment.

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Shares in advertising companies tumbled on Thursday after WPP PLC, the world's largest advertising firm, reported a steeper-than-expected slowdown in global ad buying.

Consumer packaged-goods companies, which have been a reliable source of revenue for advertising agencies, have been cutting costs to cope with declining sales driven by changing consumer tastes. Many companies like Procter & Gamble Co. and Nestlé SA have also decided to cut back on ad spending amid questions about the quality and effectiveness of digital advertising.

Hershey has been squeezed as traditional candy faces growing competition from fruit-and-nut bars, yogurt and other options that seem fresher or healthier. Looking to expand its reach, Hershey bought Krave jerky in 2015 and the maker of the barkTHINS snacking chocolate brand last year.

The company's advertising and related consumer-marketing expenses fell 4% in 2016 from a year earlier. Spending in the category through the first six months of 2017 was down 0.3% from the prior year.

However, Hershey said in a July 28 securities filing that advertising and consumer marketing would be "meaningfully higher" in the remainder of the year. The company also said it had "solid Halloween and holiday plans" and would continue its rollout of products such as Hershey's Cookie Layer Crunch bars, Reese's and Hershey's Crunchers candies and Reese's Crunchy Cookie Cups.

Write to Imani Moise at imani.moise@wsj.com

(END) Dow Jones Newswires

August 25, 2017 14:52 ET (18:52 GMT)