Walmart plans to double its multicultural ad spending as part of a sweeping initiative to move the company from a silo-like approach to making sure everyone takes responsibility for multicultural marketing.
"One hundred percent of the growth [in sales] is going to come from multicultural customers," Tony Rogers, Walmart's senior VP-brand marketing and advertising, told the audience at the ANA's Multicultural Marketing and Diversity conference on Tuesday in Miami. "Our spending against multicultural customers will grow by at least 100%." At last year's ANA conference, Mr. Rogers created a stir by saying Walmart was going to "blow up the multicultural budget" and move it out of silos and into the business units to signal how serious the company is about improving its multicultural efforts. He was invited again this year, along with Greg Warren, Walmart's VP-creative marketing, to report back on how it's going.
Mr. Rogers outlined four key learnings: 1) Make multicultural part of everything you do, rather than projects in silos. 2) Train people. 3) Set goals and keep score. 4) Build partnerships and leverage people outside your company.
Walmart's "aha" moment was a disconnect over the company's layaway program, reintroduced last year in a huge initiative. But the Hispanic ad that ran on the popular Latin Grammy Awards show on Univision featured giggling girls buying Latin music CDs from Walmart.
"The ad we ran on the Latin Grammys didn't mention layaway," Mr. Warren said. "Our [Hispanic] agency Lopez Negrete did a great job doing what we asked them to do. We just weren't asking them to do the right thing."
"Layaway was the straw that broke the camel's back," Mr. Rogers said. "The layaway team was working hard on layaway. The multicultural team was working hard on the Latin Grammys and not going to the layaway meetings. That was a real eye opener for me."
There's still a Latin Grammys effort, but now it's a platform to talk about layaway, he said. This year, the Lopez Negrete spot features two soccer fans in jerseys from rival teams buying big screen TV sets at Walmart -- on layaway.
Seat at the table
Warren said it's also key to give multicultural agencies "a seat at the table" from the beginning. Previously, multicultural efforts would lag by several weeks or a month because the general market work was done first. This year, the Hispanic wireless-contract campaign took the lead in Walmart's back-to-school wireless effort, and the general market followed.
Walmart ranked as the 16th biggest advertiser in Hispanic media with 2011 spending of about $60 million, according to Ad Age 's Hispanic Fact Pack.
"There's an education process and a score-keeping process," Mr. Rogers said. This year, an intensive tracking of multicultural efforts has been added to Walmart's weekly Monday morning meetings to measure progress and look at numbers. "You know every Monday morning, you're going to have a conversation about multicultural. [And] it's on your performance review objectives, and it's on mine. People may have three or four objectives, and multicultural is one of those things."
In another initiative in the last year, Walmart set up a monthly multicultural advisory council that includes senior Walmart execs and the heads of Walmart's multicultural agencies, including Alex Lopez Negrete, president-CEO of Lopez Negrete Communications; Don Coleman, chairman-CEO of African-American agency GlobalHue; and Nita Song, president-chief operating officer of IW Group. The group has already gone from quarterly to monthly meetings, in marathon four-hour sessions attended by Walmart CMO Stephen Quinn.
Walmart is also looking at driving diversity in its suppliers. At a shoot, for instance, Mr. Warren said 75% of the people he sees may be Caucasian. "There is still very little diversity at the ground level," he said. So Walmart is doing a pilot program in Chicago in the production space, taking junior-level people "under our wing."
Mr. Rogers said Walmart's increased focus on multicultural can also help make its suppliers smarter in that area. "We had a supplier who was convinced their audience was Caucasian women," he said. "We were able to show them that 40% of their business came from multicultural consumers."
Mr. Rogers drew a round of applause from the ANA audience when he quoted one of his marketing managers, Javier Delgado, as saying that in some companies you have to ask permission to do a multicultural program, but at Walmart you'd now have to ask permission not to do one.
How successful is Walmart's intense focus on multicultural marketing?
Mr. Rogers said, "I don't think we would have volunteered to come back [to speak at the ANA] if it wasn't working well."
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