Wal-Mart Hands Multicultural-Media Account to 42 Degrees

Consolidation of $60 Million Business Ends Infamous Review

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BATAVIA, Ohio (AdAge.com) -- Wal-Mart Stores has ended perhaps the most storied agency-review process ever by giving its $60 million-plus account for multicultural media planning and buying to Starcom MediaVest Group's 42 Degrees, New York, consolidating duties that had been with the retailer's multicultural creative shops, according to people familiar with the matter.
Wal-Mart's multicultural-media assignment is the final piece of a comprehensive agency review begun in May 2006.
Wal-Mart's multicultural-media assignment is the final piece of a comprehensive agency review begun in May 2006.

No conflicts at shop
The move by Publicis Groupe's SMG earlier this year to break up its industry-leading multicultural media shop Tapestry into two units appears to have paved the way for the win. Tapestry, aligned with SMG's Starcom unit and with offices in Chicago and Miami, handles Wal-Mart rivals Walgreens and Best Buy, but 42 Degrees doesn't have such conflicts. Though the shop is owned by SMG, it's part of the MediaVest unit and works separately from Tapestry.

One person familiar with the matter said the consolidation was an obvious choice for Wal-Mart, given the retailer's predilection for power buying. MediaVest won the rest of Wal-Mart's $500 million-plus media account in January.

Wal-Mart spent $60.7 million on Spanish-language television, magazines and newspapers last year, according to TNS Media Intelligence; the chain spent $515 million overall.

The multicultural-media assignment is the final piece of a comprehensive agency review begun in May 2006 by since-ousted Wal-Mart marketing executive Julie Roehm.

Alleged ethics violations
Wal-Mart reversed its original November selections of Interpublic Group of Cos.' DraftFCB and Aegis Group's Carat in December after firing Ms. Roehm for alleged violations of its ethics code. Ms. Roehm has denied any ethics breaches and sued Wal-Mart for wrongful termination and breach of contract. That case was returned by the U.S. District Court for Eastern Michigan last week to the local court in Oakland County, Mich., where it was originally filed.

The multicultural portion of the review -- though not otherwise caught up in the scandal -- was put on hold pending a re-pitch of the general-market account.

Wal-Mart in January named Interpublic's Martin Agency, Richmond, Va., and SMG's MediaVest as its general-market creative and media shops following the re-pitch. It also named as its multicultural creative shops Lopez Negrete Communications, Houston, for Hispanic; GlobalHue, Southfield, Mich., for African-American; and IW Group, Los Angeles, for Asian-American consumers. Lopez Negrete, an independent shop, has been Wal-Mart's Hispanic agency for a decade and is the only agency -- creative, media or multicultural -- to survive the review and remain on Wal-Mart's roster. The new Asian shop, IW, is 49% owned by Interpublic and GlobalHue, now independent, was previously partly owned by Interpublic.

Decision made a month ago
Soon after those decisions, Wal-Mart commenced a pitch for the multicultural media account. The multicultural creative assignments are unaffected by the media decision, which apparently was made last month, about a year after the comprehensive review began.

Wal-Mart declined to comment by press time. Spokespeople for SMG and MediaVest couldn't be reached or didn't return calls for comment.
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