Arnold Worldwide (CEO Ed Eskandarian) lands a $250m account

Arnold Worldwide lands a $250m account

Boston agency will create a new face for RadioShack

Boston Globe
April 27, 2005

By Chris Reidy, Globe Staff

Arnold Worldwide of Boston will create a $250 million national
advertising campaign for RadioShack Corp. that will be one of the
largest ever developed by a local ad agency.

RadioShack said yesterday that Arnold had bested 20 other agencies
from around the country to land the creative portion of its
advertising business. Arnold’s mandate: to devise the next generation
of RadioShack ads, which currently star such celebrities as Howie Long
and Vanessa Williams. In past years, ads had the theme of ”You’ve got
questions. We’ve got answers.”

With $2 billion in billings, Arnold is the region’s largest ad
agency. Clients include Volkswagen of America and Fidelity
Investments. Though Arnold is owned by Havas of Paris, most of the
work for RadioShack, a Texas chain with nearly 7,000 stores, will be
done in Boston.

Arnold officials declined to say how much of RadioShack’s $250 million
would go to the agency in revenue. It used to be that an agency got 15
percent of an ad budget, with the rest mostly going toward media
expenses, such as buying TV time.

That’s no longer the formula, as corporate clients have become tougher
in negotiating fees with ad agencies, said Judy Neer, president of the
consulting practice of Pile and Co., a Boston firm that helps
companies hire ad agencies.

Still, Arnold’s snagging the RadioShack campaign is significant.

”It’s a huge win,” Neer said. ”There has not been a win of this size
locally in quite some time.”

When the agency now known as Arnold captured the $110 million
Volkswagen account in 1995, it was described as the biggest new piece
of business ever won by a local shop.

But consolidation in many key local industries such as financial
services, has resulted in fewer big new business opportunities for
local ad agencies, Neer said.

”Every time two companies merge, an ad agency loses out,” said Bink
Garrison, who once headed the defunct Boston ad agency Ingalls Quinn &
Johnson.

Boston ad agency Hill Holliday, for example, recently laid off 3
percent of its staff, or 20 employees, because a big client,
FleetBoston Financial Corp., was acquired by Bank of America Corp.

Previously, RadioShack created its own ads, but the Fort Worth chain
has stumbled a bit lately with a subpar performance. The
consumer-electronics business, meanwhile, has evolved to the point
that the current campaign has lost relevance, said Don Carroll, the
company’s chief marketing and brand officer.

A decade ago, RadioShack was known for everything from garage-door
openers to boom boxes and computer accessories. But now the retailer
that traces its roots to a Boston store opened in 1921 also wants to
be known for wireless products.

As part of the repositioning of its brand, RadioShack decided to hire
an outside agency. The decision to hire Arnold was first reported by
The Wall Street Journal. About 10 weeks ago, RadioShack asked 20 ad
agencies to come up with ideas for a new campaign, Carroll
said. Arnold was not on the list but sent a letter to Radio-Shack so
persuasive that the company decided to include Arnold in the
competition.

Comparing Arnold’s letter to a famous Boston College football play, Ed
Eskandarian, Arnold Worldwide’s chief executive, said, ”That was our
Doug Flutie Hail Mary pass.” Eskandarian and Carroll declined to
describe Arnold’s winning pitch. Its ads are expected to run this
year.

Chris Reidy can be reached at [email protected]

http://www.boston.com/business/articles/2005/04/27/arnold_lands_a_250m_account/?rss_id=Boston+Globe+–+Business+News

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