Prices and people stressed in retail titan's advertising

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In a world where huge global ad agencies cite huge global clients as their raison d'etre, it is something of an anomaly to find a small independent advertising agency in Kansas City, Mo., handling branding for the world's biggest company.

Legend has it that the agency in question, Bernstein-Rein Advertising, was somewhat surprised when a certain Sam Walton dropped in one day in the early '70s. He had driven to see the shop, so it is said, because he liked the commercials it was doing for a local grocery store.

"When we started out they had 74 stores," said agency co-founder Skip Rein. "They decided they'd try TV in a spot market and then do a test. But then they started advertising in other markets and we didn't ever get to the results of that test."

different assignments

Thirty years later, their client is the world's No. 1 corporation with more than 3,000 stores in the U.S., over 1 million employees and a second roster agency, Omnicom Group's GSD&M, a partner of 15 years. While both agencies do creative, media planning and buying in addition to numerous other tasks, their assignments are slightly different. Bernstein-Rein handles retail branding which includes the "Every Day Low Price" commercials, while GSD&M's focus is "people and product."

These enduring relationships speak volumes about Wal-Mart's attitude to its external communications: consistency is key. Alex Lopez Negrete is president-CEO and chief creative officer of Lopez Negrete, Wal-Mart's agency for Latino marketing, along with Wing Latino, Puerto Rico. When asked about his current Wal-Mart campaigns, he responds, "I don't know if I would use the word campaign. It is really just one continuous body of work over the nine years that I've been involved. It is not the kind of company that does one campaign one year and another the next."

Wal-Mart is an atypical client in other ways too. It expects its agencies to work together as if there were no walls, rather like its product vendors. "They don't care about global networks. They just care who their team is," said Alicia Smith Kriese, senior VP-group director at GSD&M. The U.S. team also includes independent E. Morris Communications, Chicago, for African-American marketing.

"We have an agencies' council twice a year and we spend two days talking about overall vision," said Ms. Smith Kriese. She admits she didn't think it would work initially, but said the council enables agencies to share thoughts on creative work and information about strategies that did or didn't work in the various territories.

education

Internationally, Wal-Mart works with Publicis Groupe's Publicis in Canada and the U.K.; Grey Global Group's Grey Worldwide in Germany and WPP Group's J. Walter Thompson in Mexico.

"Wal-Mart goes to great lengths to educate whoever works with them. They do that much better than other retailers," said John Paul Orr, exec VP-marketing at Omnicom Group's National In-Store, Sarasota, Fla., one of nine official agencies charged with in-store marketing and tasks such as shelf designs. "They are very clear in communicating what fits the strategy, so you don't spend time on programs that don't match up," said Mr. Orr, who claims his calls are always returned within 48 hours.

When asked to describe the client, the word "understated" is often used to describe both management style and the Bentonville, Ark., headquarters.

know the customer

Mr. Lopez Negrete adds, "They focus on the work, not the politics that plague the industry." Lopez Negrete's advertising speaks to the Latino community about many aspects of shopping at Wal-Mart. In one spot, airing on Spanish language TV in the U.S., a young DJ is shown buying all the latest music at Wal-Mart. The spot shows him discussing not only the selection, but how saving money is helping him pay for college.

All agencies are schooled in the No. 1 priority: knowing the customer. The retailer's creative advertising always features real stories and real shoppers. Said Ms. Smith Kriese: "There's always a true story. They get out of the ivory tower. ... The bubble of advertising is out of touch with America. Wal-Mart lives in the real world." While Wal-Mart executives want to be kept up-to-date on shoots, they don't expect to be at them, preferring that agencies just get on with the job, said Ms. Smith Kriese.

Only 50% of GSD&M's work is advertising; the rest is research. It tests out new store formats and the performance of private-label brands. In addition, GSD&M conducts nightly phone polls to take the consumer's pulse. Questions range from what's the consumer's No. 1 store, to how they feel about the future of America. It all helps the retailer see what trends are emerging. GSD&M also has an employee who collects stories and tales about shopping and working at Wal-Mart from across the country. Such information helps shape the advertising strategy.

One of the big pluses in being a Wal-Mart agency is the extent to which its partners feel empowered to influence the company. Gene Morris, chairman-CEO of multicultural agency E. Morris Communications, a partner of 10 years, said, "They give us an opportunity to state our point of view, and if it's a concept that fits, they'll take it." The agency works on a unique program during black-history month that focuses on Wal-Mart employees who have passed on talents through the generations.

Wal-Mart, however, is not without its issues. PR agency Fleishman-Hillard, yet another decade-long partner, works on media relations and "issues," such as dealing with local officials and Wal-Mart's reputation. Jay Lawrence, senior VP-partner at Fleishman-Hillard, part of Omnicom Group, explains how Wal-Mart has tweaked its approach to public relations over the years.

"I think they are less fearful of the media than they were 10 years ago," he said. "They are in the midst of tremendous growth and they said `We need to be concerned about reputation issues."'

As the company expands overseas, Mr. Lawrence said Wal-Mart is now focusing more attention on how to protect its reputation beyond the U.S. borders.

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