Wal-Mart ad account goes to Interpublic, Publicis cos

By Michele Gershberg

NEW YORK (Reuters) - Wal-Mart Stores Inc. (WMT.N), the world's largest retailer, said on Friday it selected agencies from Interpublic Group of Cos (IPG.N) and France's Publicis (PUBP.PA) for its advertising work.

Shares of Interpublic surged as much as 4 percent with word of the decision that keeps the Wal-Mart account with the world's third-largest advertising group, even though it will be handled by a different agency within the company.

Wal-Mart put its estimated $580 million advertising account up for review in December, just days after the departure of a key marketing executive and barely one month after a previous review assigned the work to sister Interpublic agency DraftFCB and Aegis Group AGS.L media buyer Carat.

Interpublic's Martin Agency will take the lead in handling creative work on the account while Publicis agency MediaVest will be responsible for media planning and buying, Wal-Mart said in a statement on Friday.

Wal-Mart also named three agencies to focus on the black, Asian and Hispanic communities in the United States: GlobalHue, IW Group and Lopez Negrete.

Wal-Mart first put its advertising into review as it sought to shape a more polished image from the smiley-face logo and "Always Low Prices" slogan most associated with its image.

The company has added more upscale items to its shelves, from flat-panel televisions to trendier women's clothing, but the push has not been entirely successful so far.

DEEP RETAIL EXPERIENCE

Wal-Mart Chief Marketing Officer John Fleming led the review and said the agencies had been chosen for their "deep retail experience, recognized creativity and an understanding of our customers."

The ad shake-up at Wal-Mart came as its marketing communications chief, Julie Roehm, left the company in early December, along with her vice president, Sean Womack. Her departure came amid speculation she faced scrutiny from the retail chain for accepting a costly dinner hosted by DraftFCB.

Roehm told Reuters at the time the entertaining was part of the normal course of business and denied any inappropriate activity.

Interpublic in particular was hit hard by the reshuffle as it tries to put to rest a series of client losses, earnings restatements and management changes.

When DraftFCB first won the account, the new business was trumpeted as a proof of a turnaround at the parent company, while its loss quickly pushed down Interpublic shares.

At the same time, some analysts are giving the company a more positive second glance, including Lehman Brothers which raised its rating on the share to overweight from underweight earlier this week.

Interpublic shares closed 33 cents higher at $13.37 on the New York Stock Exchange after rising as high as $13.80.