|Wal-Mart's latest selection of ad agencies is a 180-degree turn from the direction ousted executive Julie Roehm was taking the company. | ALSO: Comment on this article in the 'Your Opinion' box below.||
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Why Wal-Mart Fired Its Change-Agent Marketer Julie Roehm -- and the Agency She Hired | See Seven Stories
With the Martin Agency, Wal-Mart gets a shop that couldn't be more different in culture or approach from DraftFCB, the agency Ms. Roehm picked in October only to see that decision tossed out days after she was dismissed, or Ogilvy & Mather, the losing agency in the shootout for the $580 million account.
Both DraftFCB and Ogilvy are Madison Avenue giants that tout scale and deep expertise in direct marketing and interactive advertising, among other disciplines. Martin, on the other hand, is a Richmond, Va.-based, single-office agency known for creating ad campaigns that permeate pop culture. Its Southern roots, industry observers say, make it a better cultural fit for Wal-Mart, a company headquartered in Arkansas whose heartland values are still bruised from the embarrassment that accompanied Ms. Roehm's departure.
'Set fire to everything'
"It's pretty clear that Wal-Mart wanted to set fire to everything that Julie touched," said one executive familiar with the review.
That fire also swept up Aegis Group's Carat, Ms. Roehm's choice of media agency. Unlike DraftFCB, which was at the center of the maelstrom, Carat was allowed to re-pitch, making it a favorite among handicappers. But in the end, Carat was bested by Publicis Groupe's MediaVest, leaving even its fiercest rivals to reflect that the Aegis shop was truly a victim of circumstance.
Wal-Mart also handed African-American creative duties to GlobalHue and Asian-market duties to IW Group. Independent Lopez Negrete successfully defended its Hispanic duties.
The departure of Ms. Roehm and Sean Womack, VP-communications architecture, set off a media firestorm. Wal-Mart never explained their dismissals, though executives close to the company said it had to do in part with ethical violations during the initial review, something both executives have publicly denied. Since then, the marketing executive in charge of Sam's Club, Mark Goodman, has also departed, and observers say Chief Marketing Officer John Fleming might be in for a reassignment, potentially to a merchandising role.
Importance for Martin
The importance of the Wal-Mart win to Martin Agency can't be overstated. In recent years, high-profile work for auto insurer Geico, as well as Quizno's and Miller Genuine Draft, gained notice for the agency. But adding a massive company like Wal-Mart will do much to raise Martin's profile on that short list of integrated, single-office agencies that are some of the hottest shops in the land, outfits like Crispin Porter & Bogusky and Goodby Silverstein & Partners.
"These days, you tend to think large marketers would go for large agencies, but the exception is proving to be the rule," said Arthur Anderson, co-founder and principal at Morgan Anderson Consulting.
"Martin Agency has great creative, incredible strategic planning and a deep-down understanding of direct," said Russell Wohlwerth, principal at consultancy A-Team Advisors. "It speaks to Martin's corporate persona. They are genuinely nice people who have humility about them, and they are incredibly talented. It's not that much of a stretch from Bentonville to Richmond."
A surprising winner in the Wal-Mart saga is Interpublic Group. Back in the fall, it was touting DraftFCB's Wal-Mart win as evidence of a turnaround, only to see that all trashed in l'affaire Roehm. Martin's victory, however, heaped some good news on top of a pair of analyst upgrades Interpublic received last week.
Interpublic's stock surged Thursday and Friday in heavy trading, hitting $13.40 early Friday afternoon -- then soaring to $13.80 in the minutes after news broke on Martin's win. That's 77% above Interpublic's July 2006 multiyear low ($7.79). It closed at $13.37, up 33› in its highest close since February 2005. Finally, Interpublic closed above the price at which it traded when Michael Roth became CEO two years ago this week ($13.32).