• Ad Age, Monday, July 20, 2009 10:02 AM

Wal-Mart calls it the "cost-supplement initiative"; Jack Neff calls it "probably the boldest retailer grab for suppliers' consumer-marketing funds ever." What it boils down to is Wal-Mart requiring marketers to funnel more dollars -- not just from their trade promotion budgets but also from their consumer advertising funds -- into co-branded Wal-Mart ads in various media. The sword hanging over marketers who balk is losing shelf space or delisting.

But complying with Wal-Mart's guidelines means, in theory, that Procter & Gamble would need to divert around $1 billion into its media budget or marketing. In the unlikely event that it was inclined to do that, it would have to make proportionate concessions to other retailers to avoid violating the Robinson-Patman Act.

Wal-Mart is by no means the only retailer making an aggressive push into "shopper marketing," according to Chip Hoyt, vp-marketing of brokerage firm Crossmark. He points out that strong marketers such as P&G will be better able to fend off Wal-Mart's demands than marketers of second- and third-tier brands.

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