Wal-Mart should “really pay” Ad Agencies for bidding twice

Note: I am thinking out loud and guessing all over the places in this post. So feel free to correct me in anyway you can. I will do my best to fix any incorrect claims I made. Thanks in advance.


From the way that DraftFCB was fired, the reason seemed pretty clear that it was because of something Ms. Roehm did or didn’t do (my guess — what she did), or what DraftFCB did or didn’t do (my guess again — what they did).

It looks like how the first deal fell apart was really no fault of the other ad agencies. And now they have to expense resources to bid again. Lets not kid ourselves, some agencies are going to lose again. Losing twice on a same account! I am no expert in this but I don’t think ad agencies got paid a ton of money (any money?) to bid. And since this is Wal-Mart’s account, I suppose every agencies on earth are willing to bid this one for free. Well, at least the first time around anyway.

Quoting AdWeek, at least Carat is very eager to re-pitch (second chance is better than no chance, I suppose),

Carat is eligible to re-pitch, Williams said. Reached late Thursday, Ray Warren, president, Carat, confirmed the agency would re-pitch Wal-Mart media. “We will be using flame throwers, bells and whistles and all the artillery in our arsenal,” Warren said.

Now, since it looks like Wal-Mart really messed up its bidding process, should Wal-Mart (or any client for that matter) be allowed to just act as if nothing has happened and ask the agencies to bid again (for peanuts or for free)? I am sure the ad execs have nothing better to do over Xmas and New Year holidays — not! (I am thinking of that Borat “Not joke” right now. (smile))

From a pure negotiation perspective, do the ad agencies have the power or the will to stand up together against Wal-Mart — the $193b giant? Will the agencies be thinking only of competition? (probably) Or will they be able to combine competition and cooperation to create some form of Coopetition (in the classic Brandenburger and Nalebuff strategic game theory sense)?

Ad execs are a creative bunch, I am not sure if the damaged trust can be healed quickly. I suppose the winner of the next round will still be happy (it is a $580m deal after all). But those that have to lose TWICE will really feel like sh*t. And they had to do this over Xmas. Oh, that sucks big time.

May be the ad agencies can (should?) group together to negotiate a deal with Wal-Mart so that they get paid really well to bid for the second time around.

In my humble and naive opinion, if Wal-Mart is serious about repairing the damaged relationships with these agencies, it is time for Wal-Mart to act differently. Of course, extending the deadline helps a little bit too. But since the clock started ticking this morning (when Wal-Mart reopened the account review), I am afraid the ad execs’ Xmas holiday plans have probably been canceled already.

Of course, my suggestions are ideas that only someone out of the box can think of. And probably someone that is not looking at a potential $580m paycheck can think. After all, the game doesn’t seem fair to the ad agencies at the moment. And this may be a great time to change and play a different game. Of course, I am not naive enough to think that the ad agencies will do anything differently. But my question is, if not now, when?

Again, these are just my 2 cents and I do change my mind quickly as I aspire to make mistakes faster. (smile)

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