P&G Abandons $20 Million Program With Wal-Mart

Speaking of Women's Health Casualty of New Trade-Marketing System

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CINCINNATI (AdAge.com) -- Procter & Gamble Co. has backed away from perhaps its biggest marketing program with retail behemoth Wal-Mart -- the $20 million Speaking of Women's Health program -- and major competitors have rushed in to take its place.

The move appears to mark a shift in priorities for P&G as it implements a trade-marketing program based on pay for performance, though a P&G spokeswoman said, "Our relationship with Wal-Mart has never been stronger."

Wal-Mart kicked off annual in-store events supporting the charitable foundation at its 2,200 supercenters Jan. 20 without the usual host of P&G brands that have made up the bulk of sponsorship for the past five years. In P&G's place this year were most of the company's principal rivals, including Unilever, L'Oreal, Kimberly-Clark Corp. and Johnson & Johnson.

Wal-Mart and the nonprofit National Speaking of Women's Health Foundation approached the new sponsors this summer, apparently after P&G backed out. A Wal-Mart spokeswoman referred questions to the foundation, whose chairman didn't return calls or e-mails seeking comment.

Spending wasn't disclosed, but according to tax filings by the foundation, its revenue was $19.6 million in 2004, the most recent year for which data are available -- up from $1.5 million in 2000, the year before Wal-Mart and P&G began major joint support for the program nationally.

The program, one of the biggest and highest-profile pieces of the legendary collaboration between P&G and Wal-Mart, was developed by Thompson Murray, the shopper-marketing agency for both marketers. The program won the agency P&G's top internal award for shopper marketing in 2002, before it was acquired by Publicis Groupe for its Saatchi & Saatchi X global network in 2004.

But last year, "my sense was that the execution wasn't what either [P&G or Wal-Mart] had hoped," said Burt Flickinger, consultant with Strategic Resource Group. "P&G competitors also have been lobbying to get in because they thought they could bring some new ideas and energy."

"We really felt it was a great strategic fit," said Lisa Klauser, VP-marketing shared services at Unilever. She said the program dovetails with the company's "vitality" theme in its marketing and is an example of Unilever's efforts to build its capabilities in shopper marketing.

The trade-marketing program P&G implemented earlier this month is geared toward paying retailers to carry out specific programs with readily measurable sales impact. People familiar with the system also expect it to shift resources toward bigger and faster-growing retailers. Wal-Mart is easily the biggest, but its U.S. sales growth has slipped behind that of its leading rivals.
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