The agency side
DTC Marketing Blog
A tail of sex, gifts, and culture clashes leads to another fallen star
Dec/10/06 07:42 | Permalink
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Normally I use this website to write or post articles directly related to pharmaceutical industry but the story coming out of Bentonville, Wal*Mart's HQ's, is too good to pass up. It's a story of an alleged sexual affair, of accepting gifts from agencies, but more importantly it's a story of a self-imposed marketing star who wanted to continue to shine in a culture where there are no stars.



Julie Roehm was hired by Wal*Mart with a lot of fanfare from the press. She was the marketing executive who was responsible for such racy ads as the "lingerie bowl". She is the type of person who covets the spotlight and wants to be in charge of everything. It was surprising therefor for Wal*Mart to recruit her for a Senior VP's position.

After arriving at Wal-Mart, Ms. Roehm referred to herself as a “change agent,” and set about turning the company’s annual shareholder meeting — a traditionally PowerPoint and numbers-heavy affair — into a three-hour musical. Ms. Roehm, in an interview, said she believed that her job at Wal-Mart was to buck convention. “I had to assume they felt I brought the right skill set in this quest for transformation". The meeting raised the eyebrows of several Wal*Mart executives who questioned her judgement of conducting a shareholders meeting in this fashion.

Then several weeks ago, Ms. Roehm courted controversy again when she oversaw production of a holiday TV ad, known inside the company as “Sexy,” that portrayed a husband and wife discussing racy lingerie in front of their extended family. The ad drew customer complaints and was immediately taken off the air, a person involved in the matter said. Anyone who knows Wal*Mart's positioning knows that an ad is way off base for Wal*Mart's core audience and never should have been developed.


Ms. Roehm then put Wal*Mart's $580 million advertising account up for review. In the process of meeting with agencies she was seen riding with agency people in their Bentley's and high end BMW's. She also accepted an invitation to one of the most expensive restaurants in New York, Nobu, in which generous portions of Kobe beef and lobster were served. Now some people might say "so what's the big deal?" Well this is as opposite of Wal*Mart culture as you can get. Those of us who have called on Wal*mart, including this author, know that you are not even allowed to buy soft drinks for employees. Taking ANY Wal*Mart person to dinner is strictly forbidden.


In addition to these mistakes by Ms Roehm there is an allegation that she had an affair with a subordinate of hers who accompanied her on the agency review trips. Ms Roehm, who is married, denies the affair.


So what really happened here? Well to me it's a simple case of really bad judgement as well as trying to revolutionize a culture that was resistant to change. Change is evolutionary not revolutionary and Ms Roehm as a seasoned executive should have seen this could not see this. A good executive has to learn about he company he, or she, works for before implementing change. A good executive does not continually desire the spotlight in a culture where there are no stars. Ms Roehm wanted to excel but more importantly she wanted to continue to be in control. As one executive said "Julie is the type of person who sucks all the life out of a room. When she enters a meeting, it's her meeting and nobody had better try and get control away from her."


There is a lot to learn here for everyone. Talent alone is not a guarantee of success in any industry. I am sure Ms Roehm will find a new position with some company but her star is now tarnished and it's going to be interesting to see what organization might want to take a chance on someone who is "all about me".
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Musical Chairs for ad agencies ?
Dec/08/06 07:34 | Permalink
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In case you hadn't noticed there has been a lot of musical chairs taking place on the agency side of the ad business. It's happening in the consumer and pharmaceutical ad agency business world and I expect it to continue . What's going on here? Well I believe that the good ol' days of the agency client relationships are quickly coming to an end and that marketers are sending a clear and concise message "we want strategic partners who can be accountable for their work".


Last month it was announced that Pharmaceutical giant GlaxoSmithKline had moved the professional advertising accounts for six brands to Interpublic Group of Cos.' FCB Healthcare and Torre Lazur McCann. WPP Group's Grey Healthcare lost the Advair account, valued at $100 million, as part of this consolidation. In October Novartis is moved the ad account for its high-blood-pressure medication Diovan from Interpublic Group of Cos.' Deutsch to sibling Hill, Holliday, Connors, Cosmopulos, according to multiple executives. It's happening in the consumer products area as well. This week Wal*Mart fired a Senior VP who lead a review for a new agency and promptly announced that they were reopening the account review of their $580 million business. While no reason was given for the termination of the executive the ad world is abuzz with speculation.


The old model of doing business was simple for agencies; their job was to develop ad campaigns, get them approved by the client and then bill for their time. That was then..this is now. Marketers now want agencies who are strategic partners and can be held accountable for their recommendations and work. Spend $100 million on a campaign and share doesn't move then someone has to answer "why?" Agencies are in a tough position because they often do not get to implement their recommendations. They enter the dark world of the pharmaceutical company matrix and often come out with changes to creative that are in direct conflict to what they recommended. On the other side of the street however we also find some agencies that deliver creative that is way off the mark because they are led by a DTC team with little experience in consumer marketing (see my post on Rozarem as an example).


Some ad executives, with vision, have been calling for change for a long time but nobody wants to be the first to step forward with a new business model and admit that consumers now have lot more power. The old business models and heavy up media plans just don't provide the same ROI's anymore. Marketers have to justify every dollar they spend and it's getting harder to justify mega-million dollar ad budgets today when share remains flat. Some agencies have decided to fire the first shot and fire clients (long overdue) because clients would not allow them to become strategic partners with the brand.


With all the changes on the horizon for DTC and the increased earnings pressures on pharmaceutical companies it's easy to see why every dollar and relationship is being scrutinized. I believe that a lot more shifting of business is going to happen in the near future as more companies hold agencies accountable for their work.
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Most Ad Agencies refuse to accept the fact that consumers have the power
Nov/03/06 16:58 | Permalink
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David Jones, CEO of global agency network Euro RSCG Worldwide, said that rather than talking about how to redefine creativity in a fast-changing world, "we should just get on and do it. His talk at a conference this week on creativity boarded on self-promotional garbage and is a really big reason why agencies today are in real trouble.
His first piece of advice: Stop worrying about the 30-second TV commercial. The death of the TV ad is highly overrated, he maintained, and "to talk about it is to miss the point. Our industry is the best in the world at short-form content. We should think of ourselves as creators of short-form content, not 30-second ads." Admitting to a bit of shameless promotion for his agency, he showed "Waterboy," an animated commercial that runs for more than two minutes, created and produced by Euro's Paris office. "'Waterboy' took on a life of its own" after it was aired, said Mr. Jones. The ad's soundtrack, which featured a cover of Queen's rock anthem "We Will Rock You" sung by a French schoolboy, was a spectacular success in France, where it was released as an album. The album went gold and the single reached platinum.


He then criticized a popular trend in advertising today: the use consumer-generated content. "We've got to stop thinking that consumer-generated content is an idea," he said. "It isn't. It is a phenomenon." The problem with relying on communications created by regular Joes, he said, is that they "rarely create content with your brand strategy in their pocket." Uhhhh attention Mr Jones: marketers are no longer in charge of their brands consumers are. Leave to someone trying to save his ass to talk so much crap and ignore the trends in media. Mr. Jones would might want to take a look at the latest activity around the Dove brand generated by a viral video on YouTube.com.

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With not a penny of paid media and in less than a month, "Dove Evolution," a 75-second viral film for the brand has reaped more than 1.7 million views on YouTube and has gotten significant play on TV talk shows "Ellen" and "The View" as well as on "Entertainment Tonight." It's also brought the biggest-ever traffic spike for CampaignForRealBeauty.com, three times more than Dove's Super Bowl ad and resulting publicity last year, according to Alexa.com. By those measures, "Evolution" is the biggest online-buzz generator in the U.S. personal-care and beauty industries.


Mr Jones is a symptom of what is wrong with ad agencies today. They can't accept the fact that consumers are now in control of brands and that most advertising has become irrelevant. It's no wonder that at this time agency fee's are increasing at a time when they are providing less and less value for marketers.
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