• by Joe Mandese  @mp_joemandese, October 27, 2006

Two possibly interrelated moves signal a profound shift for the world's biggest retailer. They may also signal a fundamental shift in the power of consumer marketing. Retail giant Wal-Mart Thursday announced its support of Arbitron's and VNU's Apollo project, and said it would subscribe to the data generated by a pilot project for the new single-source research system that simultaneously measures what advertising and media consumers are exposed to and what products they purchase in retail outlets.

Wal-Mart marks the first big retailer to sign on to the project, and coupled with its other recent moves, including its plans to announce a new ad agency roster, may reveal its need for greater consumer insights than it might have needed in the past. Among other things, one of its new agency partners, Carat, has a division that is deemed the best company at marketing mix modeling, a sophisticated form of marketing research that can also measure how advertising and media directly impact consumer purchases.

The developments are significant, because they also mark another radical shift in the power of marketing information - what some might call the Third Wave of mass marketing.

The first wave occurred after World War II when big marketers, especially packaged goods brands, began harnessing the power of new mass media - especially television - to create the modern media marketplace. During the first few decades, those mass marketers - companies like Procter & Gamble, Kraft, Coca-Cola, etc. - rose to power based on the incredible new efficiencies of the media, as well as their unmatched knowledge of consumer purchasing cycles.

That power shifted to big retailers during the 1970s and 1980s, as a mass of universal product codes and scanner data gave consumer purchasing intelligence to the retail community, which actually became more knowledgeable about consumer buying patterns than the mass marketers. That shift gave rise to the biggest shift in promotional spending, and actually drove so-called "trade promotion," in which retailers leveraged promotional support from marketers in the form of "co-op advertising" fees and product "slotting allowances" just to carry their products.

But the power began to shift again during the late 1990s through today, and this time it reverted not to the marketers or the retailers, but to the consumer. The rapid rise of consumer purchasing information, especially price comparison data, and product information over the Internet, has made consumers the most powerful part of the marketing mix. That was evident during the Association of National Advertisers' recent annual conference in Orlando, where big marketers such as Procter & Gamble, and retailers like Wal-Mart said it's time to "let go" and let the consumer be in charge.

It's unclear how all those shifts are influencing how mass marketers and retailers will actually go, but the latest moves by Wal-Mart reveal that it at least is in need of new consumer intelligence.

"We are looking to Project Apollo as an innovative research service that will help us understand how multiple touchpoints of our media strategies work, including traditional vehicles and obviously our own store communication touchpoints," Ramon Portilla, director of communication insights for Wal-Mart Stores, said in Thursday's announcement. "We want to tap into Project Apollo's ability to help us reach consumers with more relevant messages through the ROI optimization of our unique touchpoints, to ultimately improve shopping experiences and sales results."

So far Wal-Mart is not commenting on its new agency assignments, or the role of Carat or MMA, and Carat and MMA executives are not commenting either, but at least one observer thinks it's a brilliant move.

"Brilliant move on Wal-Mart's part, if they take advantage of Carat's secret weapon, MMA, the best and most qualified of the media ROI operations around," says Mike Lynn, director of integrated media at Storandt Pann Margolis. "Not that Wal-Mart isn't already one of the most well informed retailers in history when it comes to understanding how media works to generate profitable response. I just think it could be a great opportunity for both operations to join forces to study ROI and possibly both can add new insights to their respective knowledge bases. I don't know what the logistics will be like, but I'd sure like to be there when the whole thing comes together."