Publicis Groupe and Walmart are creating a new entity to house the retailer's U.S. creative and in-store advertising, along with other pieces of business that do not involve advertising.
"The new entity will focus on how Publicis Groupe and Walmart will partner on advertising and marketing efforts as the companies together navigate the future of retail," said Publicis Groupe in a statement.
The statement said that with the deal Walmart will have access to "resources outside of marketing, including capabilities to support corporate reputation and technology that builds relationships with customers."
The retailer has already been working with Publicis Groupe's Saatchi & Saatchi on creative. It has also been working with Interpublic's Martin Agency, for creative, and, according to people familiar with the matter, the agency is now officially losing the creative part to Publicis Groupe.
Publicis Groupe's Saatchi had been gradually gaining pieces of the Walmart business from Martin over time, these people said. They also said that IPG will still retain some business, like its PR account at Golin. Said IPG in a statement: "Walmart remains a valued IPG client. We're proud to continue supporting Walmart on a variety of projects."
As for the in-store and shopper marketing, Saatchi X, Saatchi's shopper agency, has handled that business.
Publicis Groupe said that it will pull resources from various agencies within the holding company "to ensure the right talent is working on each Walmart project." The relationship will be led by Arthur Sadoun, Publicis Communications' CEO.
The deal does not include media, according to people familiar with the pact. Publicis Groupe's MediaVest earlier this year lost the massive Walmart media account. In April, Ad Age reported that WPP-backed Haworth was in talks to take on the account, but at the time a Walmart spokesman said that nothing had been solidified yet.
"Our ambition globally is to make every day easier for busy families, and having best-in-class marketing is critical to achieving that goal," said Doug McMillon, president and chief executive officer of Walmart Stores. "This relationship with Publicis Groupe will help us think and act differently, which will ultimately enable us to serve our customers even better."
Saatchi is part of Publicis Communications, a network within the holding company that was established in December 2015 after a company-wide reorganization and led by Mr. Sadoun. The network houses all of the holding company's creative shops, including Publicis Worldwide, MSL, Nurun, Saatchi & Saatchi, Leo Burnett as well as BBH and Marcel. It also includes the production hub, Prodigious. Previously shops like Leo Burnett were independent within the holding company structure.
Publicis also consolidated specialized agencies like Arc, Saatchi X, Vivid and the Creative Counsel under the Arc brand.
In the press release, Maurice Levy touted the reorganization's "power of one" positioning. "This relationship is the direct result of Publicis' new approach, 'the Power of One,' which is designed to deliver end-to end solutions for our clients," said Maurice Lévy, chairman and CEO of Publicis Groupe in the statement. "Walmart is already implementing innovative approaches to reach its customers. Our goal is to leverage all of Publicis' assets – not just the resources of one agency – to help them in these efforts."
The reorg was designed to jettison silos that exist in the holding company, Publicis said at the time, and offer clients extra services and innovation more easily -- which seems to be the case with Walmart.
"The joint decision to launch this initiative is living proof of the power of our new organisation and a good example of how to redefine our relationship with our clients by bringing them the alchemy of breakthrough creativity and technology," said Mr. Sadoun in an internal email sent to employees. "A big 'merci' to all of you who have contributed to making this ambitious project a reality."
It continued: "Voilà, we now have a unique opportunity to partner with Walmart and win in a world where newcomers are challenging established rules and business models, by delivering through the Power of One the kind of innovative ideas that can change our companies' future."
Publicis in April won both media and creative duties for Asda -- Walmart's U.K. supermarket -- without a pitch. Blue 449, which is part of ZenithOptimedia, now handles Asda's $145 million media account, and Saatchi & Saatchi London -- whose New York office has handled Walmart's creative in the U.S. for two years -- now does the creative.
Walmart is the nation's 11th largest ad spender, according to Ad Age's DataCenter. Walmart had $482 billion in global sales last year and $298 billion in its U.S. division. The retailer had measured U.S. ad spending of $620 million per Kantar Media and $2 billion in overall advertising spending, per the Advertising Age Datacenter.