For the third time in less than three months, Wal-Mart Stores made major decisions affecting the advertising agencies that handle its giant marketing assignments.
Wal-Mart, the nation's largest retailer, chose two agencies on Friday -- the Martin Agency and MediaVest -- to handle important assignments for ads that the company aims at mainstream consumers and that appear in major media like TV, magazines and the Internet.
Wal-Mart spends an estimated US$580 million a year on such ads.
Scuppering decisions
The announcement came five weeks after Wal-Mart stunned Madison Avenue by overturning decisions made by senior marketing executives on Oct. 25 to hire the Draft FCB Group, which is owned by the Interpublic Group of Cos, as the lead agency to create ads and Carat USA, part of the Aegis Group, to handle what is called media planning and buying -- that is, determining where ads run and how much to pay for them.
Wal-Mart attributed the reconsideration to what were described as improprieties in the selection process involving Draft FCB and two Wal-Mart marketing executives, Julie Roehm and Sean Womack, who were subsequently fired.
Roehm and Womack have denied any wrongdoing.
Wal-Mart barred Draft FCB from taking part in the new selection during the holiday shopping season, but invited Carat USA to try again -- which it did -- only to fall short the second time.
Wal-Mart let another agency owned by Interpublic, the Martin Agency, participate in the second round as it had in the first.
That paid off for Interpublic, as Martin was chosen to replace Draft FCB as the creative agency.
Celebrating brown
Martin is best known for its popular gecko ads for Geico insurance and campaigns for United Parcel Service that celebrate the color brown.
"We are very pleased with Wal-Mart's decision," Interpublic said in a statement.
Shares of Interpublic fell sharply on Dec. 7, when the creative assignment was taken from Draft FCB. They climbed US$0.33, or 2.5 percent, to close at US$13.37 on Friday.
In the second review, Martin bested one other agency for the creative assignment, Ogilvy & Mather Worldwide, part of the WPP Group.
Ogilvy had also taken part in the first review and accepted Wal-Mart's invitation to participate again.
Carat USA lost this time as MediaVest, part of the Starcom MediaVest Group unit of the Publicis Groupe, was chosen to handle the media assignments.
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