Commentary

Walmart's Monahan To Agency Execs: Relax, Be Happy -- But Don't Be Rote

Well, Brian Monahan, a self-described “recovering media planner” who left Interpublic’s Mediabrands more than a year ago to become head of marketing for Walmart.com, didn’t say that exactly, but he did say he wished he knew what he knows now on the client side when he was servicing them on the agency side.

That is, he said, “that a trusted agency relationship has real juice inside a client organization.”

“I wish I had just relaxed,” Monahan recalled about his days worrying whether the client would be unhappy and, even worse, pull its business.

“Having a trusted adviser who is an expert,” Monahan said of his agency partners, “is very valuable.”

The problem, he said, is that the world is changing fast, and so are the roles of agencies for their clients.

He said the old days of agencies being “fat and happy” doing “rote tasks” are over.

“There is software coming online that is going to replace some of those tasks,” Monahan said, advocating that agencies focus more on “being a brand agent with customer insights.”

“That’s what we paid for,” he said.

Focusing on value and efficiency isn’t just how Walmart approaches its agency suppliers. It’s how it’s approaching all its suppliers, including the brands and manufacturers that sell their products through Walmart’s stores, websites and apps.

He said Walmart’s promise to its customers is to ensure they pay the lowest possible cost for those products, and that the company is focused on finding efficiency in everything it does. Including its own audience targeting -- and the audience targeting of its suppliers.

That’s why Walmart launched the Walmart Exchange, an audience targeting platform that leverages Walmart’s first-party data on customer purchases, their website and store visits to target them better online and in other digital media.

“We can track sales and see people who were exposed to the asset and see how that impacts sales at the SKU level” among eight million customers, Monahan said, calling the exchange the “highest fidelity signal that is available in the world today for marketing driving sales.”
3 comments about "Walmart's Monahan To Agency Execs: Relax, Be Happy -- But Don't Be Rote".
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  1. Tom Cunniff from Tom Cunniff, October 2, 2014 at 8:03 a.m.

    Brian Monahan is right: software will replace many tasks now done by agencies. The difficulty is that while his idea that agencies should focus on “being a brand agent with customer insights” sounds right, that is emphatically *not* what brands pay for. We can look as long as we like for the line item on an invoice for "being a brand agent who provides insights", but I doubt we will find it. Brands pay for (mostly) rote tasks, and the consultative function has been provided free in the course of delivering the rote services. This has served everyone well for decades. But in the near future, the agency costs for providing consulting will no longer be able to be bundled with the fees for providing rote services, because software will handle those. At the moment, the traditional model of "pay for rote services, get consulting free" becomes unsustainable. Clients must then choose to a) pay ad agencies for consulting; b) pay a marketing consulting firm; or c) do it themselves. When we talk about "what clients value, we should remember that this has a literal meaning: what clients value is equivalent to what they are happy to pay for. Will agencies remain the client's top choice for brand advice when the cost is no longer hidden in fees for other services? I am not at all sure.

  2. Ed Papazian from Media Dynamics Inc, October 2, 2014 at 12:01 p.m.

    Interesting commentary, Tom. But one thing that may save the agencies is the "client's" need to protect his or her ass. When things go wrong---- no matter why-----the client can always fire the agency. If the client does it him/herself, who gets fired if things go wrong?

  3. Tom Cunniff from Tom Cunniff, October 2, 2014 at 8:32 p.m.

    Ed: just say "the algorithm needs tweaking". Problem solved ;-)

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