NEW YORK (AdAge.com) -- The world's biggest retailer wants to make sure consumers know it's staking a claim in the wireless war -- and it plans to tell them this week with a national ad campaign touting Walmart's Straight Talk service as a real money-saver.
In a pair of ads by Interpublic Group of Cos.' Martin Agency, the retailer claims that if cellphone users switch to Straight Talk -- the wireless brand that retails exclusively at Walmart stores -- it "can add up to over $850 in saving a year."
Walmart's making no bones about the fact that it's aiming to beat other prepaid and contract wireless service plans on the basis of cost.
"When you look at that compared to average limited or unlimited contract plans, you're talking about substantial savings per year, which is what the ad speaks to," said Melissa O' Brien, spokeswoman for the entertainment division for Walmart U.S. "It's the freedom of no contract at a great price."
According to the very fine print in the ads, that $850 savings estimate comes from a Nielsen Mobile survey of average cellphone bills.
The service is offered exclusively for the retailer through Tracfone Wireless, a subsidiary of America Movil. Walmart is currently offering two plans: the first is a $30 plan that provides 1,000 minutes, 1,000 texts, 30 megabytes of data and unlimited 411 for 30 days; the second for $45 gets you unlimited talk, text and data for 30 days. However, plan prices don't include phones, which on Walmart.com's Straight Talk brand shop range from LG and Samsung models between a basic $39.98 device and a $328.88 phone with touch-screen, camera and video.
Targeting 'price-conscious families'
Ms. O' Brien said the retailer is hoping the new ads, which depict families fishing and camping together, will better target "price-conscious moms and families." She declined to share sales so far of the Straight Talk service, but in the new commercials Walmart urges consumers to join the "over a million who have switched."
The brand itself isn't new -- the Straight Talk name, logo and packaging were hatched quietly by New York-based indie boutique Droga5 last year -- but the big ad push is.
There's been promotion in-store and some local cable ads, but the rollout of Martin's national work, which is coupled with digital ads supporting the TV effort from Interpublic's R/GA, comes about nine months after Walmart launched a pilot program in 230 stores. The service is now available in Walmart stores nationally.
Tapping prepaid market
The prepaid market overall continues to gain momentum on contract service as consumers are still looking to save money, analysts say. Part of those gains stem from growth of business prepaid subscribers, which according to a January survey from Compass Intelligence, will rise about 10% over the next three years.
"Prepaid is growing like crazy," said Jeff Kagan, an Atlanta-based tech and wireless analyst. "It used to be a category that was for folks who were shut out of post-paid plans because of their credit, or other facts, but now it's expanded to where many customers are choosing it, either as a lower-cost primary phone, or other times as a backup phone."
Mr. Kagan noted that it was a sector that just a few years ago was "owned and operated by little companies that were owned and operated by little companies nobody ever heard of" and that Walmart making its presence known in the category is a sea change. "Walmart getting into any business is huge. It's a huge new opportunity and it's happening at a time when the wireless industry is reinventing itself."
The success of the service at Walmart is far from guaranteed, however, and a lot of it is riding on whether the new ad campaign resonates with consumers. "The opportunity is clear, but the question of will Walmart hit it on the nose and will it be profitable for them depends on how well they market and how well they advertise," Mr. Kagan said.