• by Erik Sass  @eriksass1, August 16, 2006

In a move separate from Wal-mart's ad agency search, the mass retailer Tuesday named Saatchi & Saatchi X its agency of record for shopper, in-store, and associate communications. In this role, the Publicis unit will direct the array of in-store media Wal-mart uses to reach its shoppers, and will also handle corporate communications with Wal-Mart's 1.3 million salespeople or "associates."

The Wal-mart account is a major gain for Saatchi & Saatchi, giving it broad responsibilities at Wal-mart's 3,900 stores--including programming on its in-store TV network, operated by Premiere Retail Networks. It will also be responsible for Wal-mart's signage systems and events.

Saatchi & Saatchi X has worked with Wal-mart since 1999, as noted in a statement by Wal-mart's senior vice president for marketing communications, Julie Roehm: "We have been very pleased with the results Saatchi & Saatchi X has provided us as our in-store innovation partner. By bringing the agency into an AOR arrangement as a roster agency, we believe we can achieve even greater results"

With headquarters near Wal-mart's in northwest Arkansas, Saatchi & Saatchi X is used to working hand-in-glove with Wal-mart, but this is its first appointment as an agency of record. The company also has experience coordinating marketing efforts specifically tailored to Wal-mart for big packaged goods brands like Procter & Gamble and General Mills, which made it a logical choice to manage services like Wal-mart TV--where these brands can purchase video advertising displayed near their products.

Wal-mart has pioneered in-store TV advertising, tailoring content for regional and demographic targeting. In March, for example, Wal-Mart TV announced a partnership with TV One, a cable network targeting African-Americans with lifestyle programming, and many stores also have Spanish-language content. According to Mark Mitchell, executive vice president of sales for Premiere Retail Networks, which operates Wal-mart TV, the network reaches about 390 million every month.

For her part, Julie Roehm is pushing an array of innovation projects both within Wal-mart marketing and in the industry at large. One of the main forces driving the $50 million development of eBay's electronic media trading system, Roehm may also see in-store communications as a potential area for greater cost efficiencies, perhaps looking to consolidate some of Wal-mart's ad efforts there. The retailer currently spends $570 million a year on advertising, but is under increasing financial pressure. On Tuesday the company announced its first decline in earnings in 10 years, with CEO H. Lee Scott Jr. citing the cost of gas and rising health care costs for the dip.