Wal-Mart, Please Don't Leave Me

GDS&M's bid to hang on to a monster client puts the ad agency's overhaul to the test

It's a sunny July morning in Austin and four Wal-Mart suits have arrived at GSD&M Advertising for a "chemistry session," the first meeting in a pitch process that will go on for 2 1/2- months. At stake is the right to run Wal-Mart's high-profile brand campaign.

Roy Spence Jr., GSD&M's affable 57-year-old president, welcomes the execs. "To set the right tone, I thought I'd start today by playing a clip. It's from a film I consider to be an epic piece of American cinema." On the conference room's 60-inch plasma television appears a chipped-tooth Jim Carrey wearing a hideous Southwestern-print shirt in a scene from Dumb and Dumber. Carrey is imploring his love interest, played by actress Lauren Holly, to tell it to him straight: "What do you think the chances are of a guy like you and a girl like me ending up together? Like one out of a hundred?" Holly winces. "I'd say more like one out of a million."

Pause. "So...you're telling me there's a chance?" Carrey's face breaks into a smile. "Yee-ah!" he shouts, pumping both fists.

So it is with GSD&M in the wooing of Wal-Mart. This wasn't the first meeting. The agency and Wal-Mart have been partners, along with Bernstein-Rein Advertising Inc. in Kansas City, Mo., for almost 20 years. But now, Wal-Mart Stores Inc. (WMT ) wants big changes. It aims to cultivate a more sophisticated image and has put its account up for review. That's why GSD&M is scrambling. Few ad incumbents ever win back a client's business.

NO MORE TEXAS RANGER

GSD&M, founded by six University of Texas grads 35 years ago, is undergoing its own overhaul and is using the Wal-Mart challenge as a live-fire test. With their retirement on the horizon, the founders say they want to develop a new process for cooking up campaigns that will infuse each new project with their restless creativity each and every time. They are experimenting with special software and inviting a motley collection of niche experts to help out. So far the agency has made it to the final four and has final meetings with Wal-Mart on Oct. 9.

GSD&M didn't always put such an emphasis on structure and process. Resting a foot on a conference table, Spence reminisces about the first time he flew out to Wal-Mart, solo, to pitch the marketing staff in 1987, a move that surprised them. "I told 'em, it's the Texas Ranger way: One riot, one ranger." The agency was just starting to take off. A year earlier it had coined the slogan "Don't Mess with Texas," created for the state's anti-littering campaign and still the agency's most famous creation. Wal-Mart would be its first national retail client.

Now, GSD&M has AT&T (T ) and BMW as clients, 850 employees, and roughly $100 million a year in revenues. These days, Texas Ranger tactics just don't cut it. Although not the CEO (that title belongs to co-founder Steve Gurasich), Spence and fellow co-founder Judy Trabulsi are the de facto leaders of the Omnicom Group Inc.-owned agency. Both are actively involved in all new business pitches, and their personalities permeate the agency: Spence, a longtime confidant of the Clintons, has a voice, manner, and speech pattern that resemble Bill's, while Trabulsi is the calming den mother. They are managing the Wal-Mart pitch together.

The giant retailer's marketing task is a tall order. It wants no less than to reshape its image in the eyes of Americans in 2007. The idea is to inspire the 138 million people who shop its stores each week to frequent more of its 50 departments each time they visit. It's also building six kinds of customized stores that target inner-city dwellers and affluent suburbanites as well as the rural customers who have long been Wal-Mart's mainstay. In a less tangible way, it aims to catch up with rivals like Target Corp. (TGT ) that have succeeded in building a sexier image among the middle class. Sloughing off associations with hard-line labor practices and small-business-killing tactics is also a goal. Put simply, Wal-Mart wants Americans to like the company because it is a behemoth and can drive hard bargains and cater to its every need.

A hot-shot marketing team is in place in Bentonville to drive this effort, including 19-year Target veteran John Fleming as chief marketing officer, former Chrysler (DCX ) director of marketing and communications Julie Roehm to lead the ad review process, and former Frito-Lay (PEP ) chief marketing officer Stephen Quinn. Together they will guide the roughly $570 million marketing budget. While the winning agency is expected to make only $6 million to $12 million in revenue from the account, according to industry estimates (agencies will submit their budgets on Sept. 27), the winner will be in charge of the campaign, from the overarching tagline and brand position to individual print magazine ads, a high-profile piece of business.

It's 11 a.m. at GSD&M headquarters in mid-September, and 34 people gather on a second-floor balcony overlooking the central atrium. Like a fighter squadron briefing before a mission, the group sits in neat rows of chairs listening attentively as Haley Rushing, an account planning head, speaks in front of a large projector screen. Nearly two weeks earlier, Wal-Mart handed the four finalist agencies--GSD&M; Chicago-based Draft FCB; Martin Agency in Richmond, Va.; and Ogilvy & Mather in New York--an assignment to design test campaigns. One was for the back-to-school season, the other to hawk electronics. The team, composed of more than a dozen outside consultants as well as GSD&M senior staff, was chosen to bring as many different perspectives into the room as possible. It includes folks like Neil Howe, economist and co-author of Millennials Rising, and twin sisters Amber Dalton and Amy Brady, who play video games on the professional circuit. Each is paid a day rate of $2,500 to $10,000. Over the next five hours, the group will generate a huge number of ideas.

A LONG DAY'S JOURNEY

They break out into new rooms and each fires up a laptop. Three versions of the same question appear on the different screens: "When it comes to shopping for electronics...what could Wal-Mart do or say to make a [particular set of consumers] happy...to make their lives better?" With that, strains of the fourth movement of Beethoven's 2nd symphony start to lilt through the PA system, and for the next five minutes everyone types like mad.

Spence is typing away, too. But as he enters a cogent suggestion about how Wal-Mart saves customers time, out loud he's cracking wise about the music. "I wanna hear Money for nothing and chicks for free.' Who is that? Dire Straits? I know, let's do that! Wal-Mart: Money for nothing and chicks for free.'" Trabulsi tells him to hush. Spence, in many ways, is the reason this part of the process was developed. He tends to make himself the center of attention. Not only does submitting ideas digitally produce a flood of them and create a permanent record, but offerings also show up anonymously. So a wallflower's idea can be taken as seriously as one from the boss.

A jumble of suggestions has popped up on everyone's computer screens: "Show me the most popular item within each category." "Accept trade-ins on used products." "Display competitors' prices on the same item." Five minutes into the session, there are nearly 70 ideas onscreen for each different type of consumer.

The rest of the day's activities are variations on this process. After the first round, the group reflects on what has been entered and types in more thoughtful, developed ideas based on the best elements of what has been suggested. Then the moderators move the group on to new challenges, and they dive deep again. Interspersed are breakout sessions in which consultants and GSD&M staffers mix, munch on sandwiches, and plot more detailed plans with a traditional easel-and-magic-marker approach.

They report to the moderators, who type it all up. These ideas won't necessarily be the ones used. In fact, many can be fairly bland, admits Maury Giles, GSD&M's director for analytics, who helped moderate the session. But team heads will pore over every last sentence to see if some curious phrase or kernel of a thought in those reams of pages was perhaps overlooked and incorporate it into their final plans.

No two sessions are ever the same. Rather, GSD&M can use the model to break assignments down into their components or generate ideas on an abstract level. Earlier they ran the process in reverse for their overarching tagline and new position for Wal-Mart (they won't say what it is, for competitive reasons): They attacked the developed idea, criticizing it from every angle to make it bulletproof.

The point is to provide the pitch team with ideas and insights the agency never would have come up with if they'd hunkered down only with one another. "Every industry in the world that is surviving and thriving right now is in a collaborative mode." Using a phrase he often repeats, he adds: "We just don't have the corner on the smarts. So we said we're gonna corner the smart people." If Wal-Mart buys that, maybe the Texans will be riding back to Bentonville.

By Burt Helm

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