|Rance Crain, editor in chief, 'Advertising Age'
Go ahead, Wal-Mart, be arrogant. It already counsels marketers on ad and promotional spending, packaging, product introductions and pricing. Why not get involved in evaluating the effectiveness of ads? It already has a pretty good handle on what works and what doesn't. I'll bet it's starting to draw conclusions about why some campaigns sell more product than others.
Wal-Mart's goal, we reported, is to get 100% of the first two weeks' sales of any new product and 70% over the first four weeks. It stands to reason some ads are better than others at helping it meet those goals. If supplier ads could be on the money more often, it's money in the bank -- for Wal-Mart and the supplier.
Since it demands that supplier ads work quickly, Wal-Mart's system leaves little tolerance for ads that don't get right to the selling point. Marketers that have a hard time standing up to their agencies' insistence on making jokes at the expense of the product, or showing how well the product fits into consumers' lifestyles, can take heart. Just blame Wal-Mart for the "outrageous" demand that ads must cut right to the chase.
And an agency can tell pesky magazine sales people that, while the agency personally would love to use the cumulative effect of magazines as an integral part of the campaign, its client's biggest customer, Wal-Mart, insists on using the fast-building TV medium. Further, the agencies can say that if they aren't fast enough in getting the TV campaign on the air, Wal-Mart is forcing their clients to use Wal-Mart's own in-store TV "to instantaneously build awareness" (as Wal-Mart TV's sales chief put it).
Impatience for results
With Wal-Mart's impatience for results, is there any doubt why advertisers continue to buy TV in the face of declining ratings and rising costs?
Unfair, magazines might complain -- but it could be worse. What if Wal-Mart decided to give its checkout display positions to a bunch of Wal-Mart private-label magazines? Wal-Mart's reasoning? Since magazines aren't doing anything to help move their single-copy sales (can you imagine any other Wal-Mart category not advertising to its consumers?), why should Wal-Mart give them valuable space?
There is precedent for a Wal-Mart private-label magazine. To support its fresh-water fishing tournaments, it publishes its own magazine ("the official publication of America's largest and most prestigious fishing tournament") chock full of ads for fishing tackle, boats, engines, oil and snack food products. Somehow, I don't think Wal-Mart needs to sell hard to persuade its suppliers to advertise in its magazine -- any more than it needs to put the arm on suppliers for Wal-Mart TV.
Win-win for Wal-Mart
The Bentonville folks must be of mixed mind about sharing with suppliers any formula they've divined for successful advertising. If their suppliers' advertising is off the mark, the better their huge stable of private labels look to Wal-Mart shoppers.
Not a bad formula for success: Heads or tails, it still comes up Wal-Mart.