Unruly Julie and the Scandal That Rocked the Ad World

Why Wal-Mart Fired Its Change-Agent Marketer Julie Roehm -- and the Agency She Hired | See Seven Stories

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NEW YORK (AdAge.com) -- A glamorous, young change agent kicked to the curb by the ultraconservative retail giant that had hailed her as savior months earlier. Swirling stories of sex, bribery and lychee martinis.
Photo: Scott Breithaupt

Julie Roehm: Her behavior ultimately led to one of the most spectacular collapses of a marketing executive, casting doubt on a promising career and undoing one of the most stunning account shifts in Madison Avenue's history. ALSO: Comment on this article in the 'Your Opinion' box below.

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Previous Wal-Mart Stories:

Dec. 7, 2006
Wal-Mart to Reopen $580 Million Account Review
Newly Appointed DraftFCB Cut Following Ouster of Julie Roehm
Dec. 5, 2006
Julie Roehm Out at Wal-Mart
Recently Completed $580 Million Wal-Mart Stores Agency Review
Oct 30, 2006
How Howard Draft Wowed Julie Roehm and Won Wal-Mart
Retail Giant Rolls Dice on Newly Merged DraftFCB, With Eye on Its Data Prowess
July 2, 2006
Exclusive Look Inside Wal-Mart's Advertising RFP
Retailer's 'Dream Team' of Agencies Will Focus on Nontraditional Media
May 8, 2006
Wal-Mart's 31-Year Relationship With Original Ad Agencies Hits Skids
Bernstein-Rein and GSD&M Scramble to Stay on Post-Review Roster
May 3, 2006
Wal-Mart Puts $578 Million Account in Review
Incumbents GSD&M and Bernstein-Rein Have Been Notified
Feb. 17, 2006
Wal-Mart Dramatically Expands Marketing Department
Plans to Boost Advertising Staff by 30%
Jan. 18, 2006
Julie Roehm Leaves Chrysler to Join Wal-Mart
Becomes Senior VP for Global Marketing Communications
Aug. 5, 2005
Wal-Mart Shifts Advertising Strategy
New Creative Resembles That of Target's
April 28, 2005
Wal-Mart Names John Fleming as New CMO
Led Retailer's Successful Online Operations

Made for Hollywood
It seemed a story made for Hollywood rather than Bentonville, but in the days following Julie Roehm's ouster it emerged that her real offense was a blatant, and some might say stupid, disregard for a business culture that is more about the honest average Joe than the Aston Martin man.

In the days since Advertising Age revealed that Wal-Mart had fired Ms. Roehm and her underling, Sean Womack, VP-communications architecture, the industry's attention has focused on a brief history of flashy and ethically cloudy behavior that would have Sam Walton rolling in his grave.

Alleged missteps
Among the alleged missteps by Ms. Roehm: accompanying one of the agencies in the retailer's $580 million review to a flashy dinner at Nobu restaurant; sitting in that agency chief's Aston Martin; sleeping with Mr. Womack. Ms. Roehm admits to the first two and strenuously denies the third.

Still, her behavior ultimately led to one of the most spectacular collapses of a marketing executive, casting doubt on a promising career and undoing one of the most stunning account shifts in Madison Avenue's history: Wal-Mart's October decision to award its $580 million account to DraftFCB, just months after parent company Interpublic Group of Cos. decided to create the unit and put Howard Draft -- yes, he of the Aston Martin -- at its helm.

January mandate
Julie Roehm joined Wal-Mart last January with the mandate to get the blood flowing in a historically moribund marketing department whose biggest accomplishment had been signing off on the treacly smiley-face icon that symbolized the long-held price-rollback approach. But instead of being catalyzed, Wal-Mart and its culture rejected her like a bad kidney.

Last Thursday, Wal-Mart fired DraftFCB and said it would begin another review in which the agency would not be allowed to participate. Wal-Mart's media-buying and -planning business will also go back into review, though the winner Carat will be allowed to participate.

Match made in hell
Ms. Roehm, according to executives familiar with Wal-Mart, was felled by her own hubris, but she was also a victim of the extreme sensitivities of a Wal-Mart business culture that forbids its buyers to take so much as a cup of coffee from vendors and generally frowns on behavior that draws attention to its inner workings. That the mediagenic Ms. Roehm spent her 11 months in Bentonville in about as high-profile a manner as a senior marketer can didn't help: Her central project was running an ad review that took her across the country touring agencies and put her squarely in the public eye. In retrospect, Julie Roehm working at Wal-Mart looks like a match made in hell.

"She just didn't fit in with the culture there," said one executive close to the imbroglio. "She was not right for that world." Ms. Roehm, in an interview, didn't seem to disagree: "The history books are littered with companies who sought change and then decided they didn't want it. That's their prerogative. I still don't know specifically what happened there."

Career built on controversy
The irony, of course, is that Ms. Roehm was done in by the very rock-star qualities that likely made her so attractive to Wal-Mart in the first place. After all, the 35-year-old's career was built on controversy. During her watch at Chrysler, she became famous in the marketing world for taking chances on risky plays such as the infamous Lingerie Bowl. She also signed off on a Dodge Durango spot that had two men chatting about size while standing before urinals. And she's been a very outspoken proponent of initiatives to change the way ad time is bought, including a plan to test an online auction.
What 'Advertising Age' said about Ms. Roehm's appointment in January.
What 'Advertising Age' said about Ms. Roehm's appointment in January.

Wal-Mart's leadership was especially miffed by a September dinner at New York's posh Nobu 57, where over lychee cocktails and plate after plate of sushi, lobster and Kobe beef, a number of search consultants were wooed by executives at DraftFCB. Also on hand was Ms. Roehm who, according to those in attendance, was effusive about the newly formed agency's business model -- a tall, good-looking and hyper-articulate weapon in DraftFCB's charm attack on the small but influential crop of consultants.

Denies gifts and gratuities
Ms. Roehm denied she received "any gift or gratuity" and said she paid her own way at the Nobu event.

"It was one of those hors-d'oeuvre-y things, so I'm not sure exactly what I ate, but I just fully anticipated that they knew to bill the food back to Wal-Mart, which is what Draft had done on other occasions and what the other agencies did too."

Ms. Roehm also denied persistent rumors last week that part of the reason for her dismissal was that she had, as some people put it, "an improper relationship" with Mr. Womack that the rumor-mill suggested would end in Ms. Roehm's getting divorced.

She denied that. "There is no improper relationship. Absolutely not. I've had this my whole career. ... I'm meant to have slept with about half the men I've worked with, so I clearly get around, but I can tell you I've never experienced any of the benefits of that."

Said her husband, Mike Roehm: "No, I'm not divorcing my wife. Sean is a good family friend of ours."

Wal-Mart remains tight-lipped
Wal-Mart isn't offering any detail about her departure--although a spokesman did stress that Ms. Roehm was not accused of any criminal action. But executives close to the retailer say events like the Nobu dinner, in addition to her well-publicized attempt to go for a ride in Howard Draft's Aston Martin while the account review was ongoing, angered Wal-Mart's senior leadership at a crucial time.
Howard Draft's Aston Martin has become a high-profile element in the scandal.
Howard Draft's Aston Martin has become a high-profile element in the scandal.
So did some less-than-classy and widely criticized Cannes ads that DraftFCB created for Advertising Age's Creativity featuring a pair of lions in a mating position. All of this comes as a company that long coasted on easy growth has seen same-store-sales declines and, at the same time, has been trying to emerge from ethical quagmires such as a fake-blog scandal that recently dominated the media's attention.

A DraftFCB spokesman expressed "disappointment" at the decision last week but declined to comment further. Ms. Roehm declined to comment on the decision. Wal-Mart declined to make executives available for interviews and attributed the DraftFCB decision to "new information obtained in the past two weeks" that it did not describe in any detail.

The seven-month review featured a number of occurrences, such as the Nobu dinner, that left those who participated perplexed and often frustrated, particularly feeling that DraftFCB had extra face time with Ms. Roehm and tried to win the business by lowballing its rivals, something Ms. Roehm denied in interviews following the late-October decision. Yet even the losing bidders for Wal-Mart's business, probably the largest account to go in play this year, stop short of crying graft.
The infamous Aston Martin
The infamous Aston Martin Credit: George D. Lepp

Ethics of new business
The ethics of new business are, to put it mildly, hazy. As gauche a tactic as DraftFCB's Nobu dinner seems now, a stickler could point out that a cookout in honor of Wal-Mart held in July by Ogilvy & Mather, another finalist for the business, also caused problems for a code as tight -- or, as one agency executive put it, "draconian" -- as Wal-Mart's.

"I might stop short of calling all of what went on unethical," said one veteran new-business executive. "But I would call it stupid."

Ms. Roehm put it differently.

"There's this strange thing we do called a chemistry check, where we try to work out whether we're a cultural fit for each other," she said. "That means formal meetings, but it also means informal meetings and maybe even going to social events together. You're not just negotiating FTEs."

~ ~ ~
Mya Frazier and Alice Z. Cuneo contributed to this report.
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