Arnold lands a $250m account

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 reidy@globe.com.