• by Sarah Mahoney  @mahoney_sarah, Tom Siebert , December 8, 2006

In a stunning reversal of fortune, the likes of which has never before been seen in the history of advertising, mega-retailer Wal-Mart yesterday rescinded its recently awarded $580 million account, pulling it from the tandem of DraftFCB and Carat and putting the business back into review.

The jaw-dropping move was the second--and even heavier--shoe to drop, following the news earlier this week of Wal-Mart's dismissal of marketing communications SVP Julie Roehm, who led the eight-month review resulting in DraftFCB and Carat's win.

"Earlier today, we notified DraftFCB that we would reopen the bid process and they will not be eligible to participate," said Mona Williams, a spokesperson for Wal-Mart. "Carat will be invited. If they want to bundle with somebody else, they are welcome to." She added that Wal-Mart is open to working with another IPG firm.

Williams said the decision was made because of "new information we have obtained over the past few weeks." She declined to provide further details, but added that because of the work accomplished during the original process, the review would proceed quickly, with a new agency named by the end of January.

With a time frame that short, it's likely that one of the other finalists in the review--The Martin Agency, Ogilvy & Mather and incumbent GSD&M--or Wal-Mart's long-term independent firm Bernstein-Rein, which held the business in combination with GSD&M, would be awarded the account. Williams acknowledged but would not confirm this fact, saying: "All that's still being worked through. We should know soon."

Speculation, rumor and gossip ran through the advertising community like wildfire on the open prairie following Roehm's abrupt departure from the big box retailer, which came simultaneously with the departure of her close associate Sean Womack, vice president of communications architecture.

Several sources close to the review process, speaking on the condition of anonymity, say Roehm, a former Chrysler marketing executive, was never a good fit inside the company's culture, but had increasingly become persona non grata to Wal-Mart because of her behavior during the review and inside the organization. "They're burning everything she touched," said one source.

During the review, Wal-Mart's strict "non-gratuity" policy was breached, confirmed several sources, by at least two of the agencies and likely more. Roehm also operated more as a lone wolf than a team player, and did not keep enough executive-level management abreast of her progress or ultimate decision, further rankling top brass.

Wal-Mart also got wind of a full-page ad in Creativity magazine from DraftFCB, promoting the Cannes Lions awards, that depicted two lions copulating, with the caption "It's Good To Be On Top," which spurred much negative talk inside the company.

The easiest move for Wal-Mart at this point, speculated several sources, would be to simply keep the business at GSD&M and Bernstein-Rein, who continue to work on the account and may provide the traditional agency link that Wal-Mart decides it needs as it re-evaluates how it wants to be perceived.

With its weakest sales in a decade, the Bentonville, Ark.-based mass retailer may be moving more toward a mantra of improving the image it has a discounter, rather than trying to reposition itself as a store known for quality.

"Nothing has gotten simpler for Wal-Mart," said Richard Hastings, a retail analyst with Bernard Sands. "Everything has gotten more complicated. I'm going to speculate that Wal-Mart executives may realize that much of the imaging and branding efforts they've talked about are not going to achieve the results they thought they would, a year ago, when they really started to ramp these marketing programs up."

"The deterioration of sales momentum happened much faster than anyone anticipated," he continued. "In the U.S., they may have been maturing. It happens. But because sales momentum is off, and customer loyalty is off, they may be better off focusing on improving the store experience for people."

The toughest situation may be the one facing Carat, which presented an integrated marketing strategy as DraftFCB's media partner, and now finds itself in a Super Bowl of agency reviews without a defense. And when it comes to mating animals, Ogilvy & Mather recently one-upped DraftFCB with a 60-second commercial for AIDS awareness that shows a menagerie of creatures in the act.

Spokesmen for DraftFCB and Interpublic Group of Companies, DraftFCB's parent company, both said they were "disappointed," but declined further comment.

Representatives for Carat did not return calls by press time. Spokesmen for The Martin Agency, GSD&M and Bernstein-Rein referred calls to the client.