Agencies May Give Radio Shack Answers

Radio Shack moves into its new Fort Worth, Texas, headquarters next week, and the first department to take up residence will be its 150-person in-house ad agency. But a new marketing director's talks with outside shops may spark the export of at least some of the retailer's $220 million ad account. Radio Shack has called at least three shops—Interpublic Group's TM Advertising in Irving, Texas, and Deutsch in New York, and WPP Group's Berlin Cameron/Red Cell in New York—seeking "branding" ideas, according to one executive. It was unclear if all three shops agreed to meet with the client. The arrival of Kieran Hannon as brand vice president two months ago is seen as a catalyst for change at the 80-year-old electronics retailer, sources said. Like chief brand officer Jim McDonald, Hannon came to Radio Shack from Young & Rubicam and also worked in San Francisco as a senior partner at J. Walter Thompson and, for less than a year, president and COO of Grey in Northern California. On occasion, Radio Shack taps outside agencies for project work. Through a representative, Hannon denied that the talks were a prelude to naming a lead agency. "At any given time, we could have multiple agencies handling multiple projects on an à la carte basis," the rep said. "But when it comes to execution, we have no need to go anywhere else." But Radio Shack's current work "is not moving business," one source said. The consumer-electronics marketer is the nation's top seller of wireless phones and accessories through its 7,000 stores. While that segment accounts for one-third of its sales, growth in other categories has lagged, analysts said. Radio Shack's sales rose roughly 1.6 percent in the first six months of the year, compared with the comparable period in 2003. Radio Shack chairman and CEO Leonard Roberts announced on Sept. 8 that the company was planning to divest non-core assets with a goal of boosting profits by 20 percent in 2005. In addition, next year the retailer will set in motion a three-year growth plan that includes redesigned stores and a drive to broaden its appeal to a wider customer base. Radio Shack customers are still 60 percent male, but a new product line known as "Lifewise" is designed to enhance the chain's appeal to women, with items such as aroma-therapy machines, health-monitoring gear, massaging equipment and air-filtration systems, the rep said. McDonald previously worked as an account director on the Radio Shack business at Young & Rubicam Inc.'s The Lord Group. But he moved to the client side in 1998 and shortly thereafter took the business in-house. There, he created Radio Shack's tagline, "You've got questions, we've got answers." The chain's advertising under McDonald has featured celebrity spokespeople such as Howie Long, Shaquille O'Neal and Teri Hatcher. The chain's latest celebrity pitchman is former football star and Fox broadcast personality Terry Bradshaw. Radio Shack spent $220 million on ads in the U.S. in 2003, and $95 million through July 2004, according to Nielsen Monitor-Plus.

Brand Marketing

Agencies May Give Radio Shack Answers

Richard Williamson

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Richard Williamson