Wal-Mart Dodges Draft and Re-Opens Ad Review

In a jaw-dropping reversal of an equally astounding win, Draft FCB, the Chicago-based integrated ad agency owned by InterPublic Group and headed by direct marketing veteran Howard Draft, was bounced from the Wal-Mart marketing account, even as the company was gearing up for the job with as many as 100 new hires..

Neither Wal-Mart nor Draft FCB would comment on the specific reasons for Draft’s dismissal, but Bloomberg News quoted a Wal-Mart spokeswoman as saying that the decision to eject Draft was “the result of new information we have obtained over the last few weeks.”

At Draft FCB, spokesman Wally Petersen would only say, “We’re disappointed by the decision and we’re moving forward.”

An internal memo e-mailed to Draft FCB employees late Thursday said that “a number of events have occurred at Wal-Mart in recent weeks,” that the company was reopening its agency pitch process, and that “we will not be participating.” The memo went out over the signatures of company founder, chairman and CEO Howard Draft, chief creative officer Jonathan Harries, president and COO Laurence Boschetto and CFO Bob Oates.

Wal-Mart has announced that Draft FCB will not be eligible to bid for the company’s ad business in the reopened pitch. Carat USA will apparently be able to submit a second application, as will the others in the earlier pitch process — possibly along with Wal-Mart’s long-time agency Bernstein-Rein.

The Draft dismissal came two days after the departure of Wal-Mart head of advertising Julie Roehm last Wednesday. While Roehm’s parting was not officially explained, press reports said she had taken flack for violating Wal-Mart policies against taking gifts from current or prospective suppliers and service providers.

Roehm has since admitted to attending an elaborate dinner in the company of Draft executives during the agency review process in September, although she maintained that she thought her meal was being billed back to Wal-Mart. She also admitted to riding in the vintage sports car of Draft FCB founder Howard Draft — a move that Wal-Mart leaders may have considered inappropriate fraternizing.

Draft’s loss of the Wal-Mart account is doubly momentous because of the fanfare that accompanied the original win. To get Wal-Mart’s business, Draft FCB beat out a number of old-school advertising agencies, including GSD&M, Ogilvy & Mather and The Martin Agency. The firm’s success

Wal-Mart was thought to be a notable a notable victory for Chicago-based Draft. Coming as it did months after the merger of direct-mail marketer Draft and brand advertiser FCB, both IPG companies, it seemed to be a validation of the “one-stop shop” approach that combined the performance orientation of a DM firm with the audience insight and engagement of a brand advertiser.

The Wal-Mart win was important enough that Chicago’s Mayor Richard M. Daley stopped by a Draft celebration party on Election Day eve last month to offer Howard Draft his congratulations.

And Advertising Age revealed over the weekend that it had been planning to name Draft FCB “Agency of the Year” in a January issue, both because of the merger and the Wal-Mart coup. That title will now go to another contender, as yet unnamed.

Some observers believe Draft can weather the Wal-Mart setback if it is able to retain current clients and attract new ones. While large, the Wal-Mart account would not have been the biggest in Draft FCB’s stable, which already includes Procter & Gamble, Verizon and Kraft. Thursday’s e-mail to employees pointed to other wins since the merger, including new business from Citibank, Merrill Lynch, MoneyGram, Novartis, MetLife and the NAACP.

“Our culture is based on the key underpinnings of integrity, accountability, creativity and client-centricity,” the company e-mail concluded. “It will remain so. Let’s not let this situation shake our confidence. Our best days are ahead. We can feel it.”