Spinning 2.x: Julie Roehm

If the art of spin is part of Julie Roehm's marketing 2.x concept, she's certainly trying to employ it in court. Roehm's defense tactic against Wal-Mart is to exonerate herself by accusing executives at the #1 retailer of ignoring company ethics policy.

She says they accepted trips and gifts from clients and benefited from preferential prices on jewelry and yachts, implying that maybe that makes it okay that she broke the company's ethics policy by accepting gifts from agencies pitching the Wal-Mart account last November and having what seems to have been a heated affair with a subordinate.

According to The New York Times, the filing says "While Wal-Mart asserts that it has policies which prohibit conflicts of interest and the misuse of Wal-Mart assets and opportunities, those policies do not seem to prevent its executives from using both to personal advantage.”

The story is also generating buzz at The Wall Street Journal and CNN Money. Each publisher has a slightly different take on the story, ranging from outlining Roehm's claims in some detail to brushing them off as a weak defense.

It's difficult to tell what the court might think, given this tactic seems to play more to the media than her case. On the quick, it reminds me of a defense similar to one my then 7-year-old son cooked up about a year ago. "Why were you throwing rocks at that house?" I asked. So-and-so "threw rocks at the house first" was his defense. Ho hum.

Since her termination last December, Roehm has fared the worst of the three most cited in this case study. Other than landing a gig at Sports Illustrated, most businesses have given her a lukewarm reception since she filed the wrongful termination case against Wal-Mart. Meanwhile, DraftFCB won K-mart and Wal-Mart stocks are up on the market.

Digital Media Moving Forward: Motorola

According to ADWEEK, Motorola has signed on to sponsor "The Burg," a Web comedy series of nine four-minute episodes that explore the hipster haven of Williamsburg, Brooklyn. Motorola products will be featured in the programming, which will NOT include pre-roll spots. The show has the potential to reach 5 million viewers.

While a few steps shy of fully capitalizing on social media, it does represent what will become a reoccurring theme in how companies view digital media and advertising. The product placement deal with with VideoEgg, which will syndicate "The Burg" through its network of social networking sites, was brokered by Motorola and DraftFCB.

If successful, this could represent another boon for DraftFCB, proving that there is life after Wal-Mart. The product placement deal comes on the heels of winning Kmart's $200 million account. It also suggests that DraftFCB is taking integrated social media seriously whereas some think other large agencies might not be.

Matt Heinz, senior director of marketing for HouseValues, Inc., recently began his article "Why Agencies Should Be Terrified" for iMediaConnection by speculating: “Ad agencies are in big trouble and may very well become just a memory five to 10 years from now. That's a bold prediction, for sure, but the marketing world is offering far more support for that suggestion than proof against it."

"The best, most brilliant, most effective marketing ideas of the past of couple years have not come from big ad agencies. They've come from small shops, and more often from individual consumers," he wrote. "Part of the problem lies in what big ad agencies have traditionally done well, vs. what works in marketing today. Even 10 years ago, traditional media was king. Great creative, placed correctly in the right media channels, could build mindshare and drive consumers to action."

There is almost an irony in that one of the most peer criticized ad agencies seems to be testing the waters for what might be next. No matter what you have to say about Howard Draft and DraftFCB, you have to respect them if the guess it is true. There is little doubt that more agencies and companies need to expand their horizons. If you listen closely enough, the argument isn't just being made by small shops like mine, it's starting to be made by companies like NBC Universal, Viacom (through Joost), and MTV.

The bottom line is that as distribution platforms change so will the face of advertising. Sure, we don't really know if these changes will take place in the form of VideoEgg's idea to show a small ad window on the bottom of the video player that viewers can click on to find product information ... or something more robust like we (Copywrite, Ink.) have in mind. But either way, there is no doubt that times are changing.

"There's a trend to media consumption in social networks," Troy Young, VideoEgg's chief marketing officer, told ADWEEK. "They haven't had as much success building destinations, so they're looking at hitting users wherever they're spending their time."

Hmmm... no wonder Harris Interactive's research into mobile advertising seems appealing. While not perfect (what is, really?), it certainly provides a well thought out glimpse into the future.

Counting Casualties: DraftFCB

Of all the casualties related to the Julie Roehm vs. Wal-Mart legal battle, the quietest past participant seems to be nursing the largest wounds. According to Noreen O'Leary's Apr. 2 story in ADWEEK, DraftFCB is still in the shadow of scandal.

Although there is no public evidence that the agency's recent account woes are linked to Wal-Mart, O'Leary writes that some claim reviews of the $1.5 million John Deere and $3.5 Applebee's account may both be linked to the scandal. (DraftFCB will not participate in these reviews). Along with these accounts, Qwest Communications, a $95 million client that generates about $15 million in revenue, confirmed it is launching a creative review. The story also implies that S.C. Johnson and Verizon Communications are less secure.

"Whenever there's negative press, there's going to be short-term damage. But I don't think there's any fundamental damage to Howard or his agency," said Michael Roth, chairman of Interpublic Group. "In this business, you're only as good as your last account win. This model of the future, of putting these two companies together and winning Wal-Mart, proves the validity of it. I'm still very bullish about this (the DraftFCB merger)."

Others disagree. One former FCB employee described the mood at the company's New York flagship as "grim," according to O'Leary. "Everyone knew from the beginning that Draft would take the lead, but still, it's as if 100 years of FCB heritage is being shredded by Howard Draft."

I think Roth might be right. If DraftFCB can land a major account that gives it the opportunity to demonstrate creative result-driven work (which has not been easy for the Draft side, some say), it may be able to reverse its course. However, this is a very tall order and will require a sympathetic high-profile major account.

Part of the challenge will no doubt be reflective of the ADWEEK poll that revealed 29 percent of the 2,400 respondents said Draft fared the worst in recent industry scandals, second only to Roehm, with 46 percent. Although recent publicity that revealed Wal-Mart's past electronic surveillance and other espionage missions against employees was extreme, only 10 percent said Wal-Mart fared worst.

Here's my unsolicited take for the three most visible parties might consider for turnarounds and wins in the months ahead:

DraftFCB — Since you already made amends by supplying e-mails to Wal-Mart, take a page from the JetBlue crisis communication plan (sans apologizing forever) and create an agency ethics guide. Take a breath and consider some Ragan Communications findings that suggest: more than 60 percent of mergers and acquisitions fail to deliver the benefits that are promised—often because of the poor quality of communication. You need a message beyond picking up 90 smaller accounts worldwide. The message you have, Draft ROI with FCB creative, doesn't seem to be working. Spark up some integrated social media pitches and that will frighten other agencies, after they stop laughing.

Julie Roehm — Stop calling yourself a "change agent," drop the suit, get out of the press, take an extended vacation, come back refreshed (perhaps a bit remorseful), and start your own "marketing 2.x" firm, whatever that is. Your first few clients will likely be smaller accounts, perhaps in the automotive industry, but sometimes smaller accounts can turn into giants if your ideas really work. (Bonus tip for Sean Womack: stay away! Stay far, far away!) Marriage counseling wouldn't be a bad idea either, even if you didn't do anything as you said. (By the way, I'm married. Don't e-mail me!)

Wal-Mart — Sure, you asked Roehm to pass on perks from vendors and it didn't work. It's not your fault. But the time has come to give up on the notion anybody will make you happy with traditional marketing. You do need something new, but new doesn't mean Roehm's "progressive" and "sexy" that would have never reached your target anyway. So the best advice for the fine folks working on your next campaign is simply this: to get back to basics and rekindle that grassroots shopping for common people concept you once had before all the public relations nightmares and bad communication consulting distracted you. Who knows? Maybe what I call "income marketing" would be right up your aisle.

"Income Marketing" is marketing that generates income instead of simply producing expenses so that even CFOs might like it. Sure, it sounds like something that goes against my shell game post, but one of my colleagues told me to call it something. Besides, that was part of Amitai Givertz's excellent comment at RecuitingBloggers.com.

Have a nice weekend and happy Easter!

Taking The Bottom Position

Two days ago, we alluded to the idea that Julie Roehm was only the first casualty of a Wal-Mart insider marketing war. Yesterday, the fine folks at Draft FCB found out they were the next to go, just weeks after they crowed about being in the 'top position,' partly because they won the account. I guess it's back to the bottom position for them, making their ill-advised ad the ultimate case study for irony in advertising.

The not-so-surprising news yesterday was that Wal-Mart quickly overturned Roehm's Draft FCB choice, putting $580 million worth of advertising purchase power back on the table. Several major agencies are already pulling together their marketing plans for the nation’s largest retailer.

Ms. Roehm maintains that she did not accept gifts from agencies vying to become Wal-Mart advertising superstars or that her relationship with subordinate Sean Womack violated company policies. Instead, she told The New York Times: “I think part of my persona is that I am an envelope pusher,” she said last night. “The idea of change in general can be uncomfortable for many people, and my persona as an agent of change can prompt that feeling.”

This seems to be a spin contrary to her attendance at a September dinner given by Draft FCB at the Manhattan hot spot Nobu, where she allegedly explained her presence as one of those cases where “if you don’t ask, you don’t get.” Unfortunately for Roehm, sometimes you do get what you don't ask for, since Wal-Mart has ruled the search process was "tainted by the pair’s behavior and should be reopened."

Draft FCB's (part of the Interpublic Group of Companies) stock fell 6.4 percent on the news it had lost the account. As I often advise clients in Roehm's position and higher, behavior is easily managed. Unless you'll be proud to see the story appear in the Wall Street Journal, er, The New York Times, don't do it!

All cloak and dagger courtships aside, Draft FCB was not ready for the holiday season and neither was Roehm, based on a USA Today story that weak Wal-Mart sales are dampening holiday season hopes.

What USA Today seems to miss is that the 'dampener' might be all Wal-Mart and not all retailers. Given that the agency review was concluded dangerously close to the holidays (not bright), that choosing an ROI (Return On Ideas) agency delivered a dismal negative .01 percent in sales for Nov. (assuming they got anything off the ground), and that Wal-Mart is in desperate need of some top-down strategic communication development to prevent it from further losing its way; I'd say it is not the best national holiday sales indicator at the moment.

You see, it used to be that Wal-Mart was unbeatable because it had a solid message that other retailers could not compete against. Today, Wal-Mart has voluntarily given up this message in order to pursue what it perceived as greener pastures (higher-end retail). Unfortunately, it did this without developing a core message with complete consensus among board members and executives.

In fact, that is why I don't give Roehm "I'm a change agent" as much kudos as some. Her "follow-me-on-faith" approach left the world's largest retail giant without a message, at best, and with a message unsupported by its core consumer, at worst. Gee, I thought we already covered this lesson back when Miller beer alienated its blue collar consumer with ads aimed at a micro-brew generation. Ah, history, let's repeat it. Ah, history, let's repeat it.

Advertising The Lack Of …

Every day, the sudden departure of Wal-Mart marketing boss Julie Roehm is attracting more attention and is increasingly linked to her connection with Draft FCB, which she pushed to become Wal-Mart's agency of record in October.

Speculation suggests Roehm flouted Wal-Mart's strict corporate gratuities policy, which states no one who works for the company can accept any sort of gratuities from suppliers (even a cup of coffee). But the real damage was done when Draft FCB ran an ill-advised, tasteless, and remarkably uncreative Lion Awards advertisement featuring a real male and female lion having sex above a copy line that read "It's Good to Be on Top."

I won't post it here, but you can find a copy of the ad on ADFREAK. The ad is so poorly done and uninspired that one poster accused Adfreak's Tim Nudd of posting a fake. No doubt, Draft FCB wishes it was a fake, as one of its spokespeople has already said the ad was "a terrible mistake."

It's a terrible mistake because some inside Wal-Mart, those who were dissastified with the decision to hire Draft FCB, suddenly had good reason to second guess Roehm's big push. Not good for Draft FCB because Wal-Mart insiders are not the only ones looking to poke holes in Howard Draft's rise to the top of the industry after merging with Foote Cone & Belding (which was already struggling) last June.

As Lewis Lazare wrote in the Chicago Sun-Times, the merger date will "go down as one of the darkest moments in the history of an increasingly troubled ad industry, which, with each passing day, shows new and disturbing signs it has lost its way.”

He called Draft FCB Group depressingly real proof the American ad industry has been totally and tragically upended.

“It's a shame to think that an agency like Draft that was once the lowly tail on a big, healthy, creatively inspired canine has finally emerged as the powerhouse wagging the mangy mutt that is now the general consumer ad business,” he said.

Little did Lazare know that the tail he was writing about would be morphed into a lion within six months. An agency showing its not-so-wild side, after Wal-Mart gave the agency its $580 million account, only added to Roehm's streak of bad luck since joining Wal-Mart.

Last month, she made a questionable call on a press release from Wal-Mart about how a staffer of John Edwards, the former senator and presidential hopeful, inquired about getting a Sony Playstation on the same day that Edwards was having a media event in which he talked about how bad Wal-Mart is to its workers.

Summed: never underestimate the brand damage you can do with a single gratuitous awards program advertisement. A dark day indeed.