Wal-Mart’s woes give WPP a second chance

All in all, 2006 has not been a great year for the Team WPP concept. The recent loss of £75m Sky and £47m Vodafone no doubt involved a serious loss of face.

Yet they are pin-pricks seen in the context of WPP’s global operations. Its systematic programme of infill acquisitions, particularly in Asia, continues apace. And if the Team concept has taken a battering, next year may witness its triumphant vindication, thanks to the bizarre affair that is the £300m Wal-Mart pitch.

WPP, via Ogilvy, came close but not close enough in the original pitch, which was finally won by Draft FCB. For Draft, and particularly Howard Draft, it was a crowning achievement in what had frequently been a turbulent Interpublic Group network merger. Many existing FCB and Draft clients were suspicious of IPG’s motives, mouthing "cost-cutting" and (in the case of Draft himself) "ego-trip" whenever the marketing services group proclaimed "holistic". Yet Wal-Mart, with its huge budget and complex servicing requirements, seemed calculated to stop the carpers in their tracks.

How gut-wrenching for Draft FCB that only six weeks later it should find its strategy, together with the Wal-Mart contract, in tatters. And for reasons which – outside the magic circle of participants – seem almost too incredible to grasp.

The train of events started in early December with the ousting of the woman who had led the pitch, senior vice-president marketing communications, Julie Roehm. Feisty 35-year old wunderkind Roehm made much of her reputation as an "envelope pusher" antagonising a conservative management in explaining her sudden departure. But the near simultaneous firing of her lower ranking colleague, v-p communications architecture Sean Womack, soon had observers considering alternative possibilities. According to one of the many lurid stories which have since emerged, Roehm broke Wal-Mart’s puritanical code of ethics by allowing herself to be treated at Draft FCB’s expense to a lavish meal before she had actually appointed the agency. A circumstance that would barely raise an eyebrow in most pitch situations. More seriously, there was the affair, "improper" or otherwise; a similar revelation recently poleaxed the career of Boeing’s chief executive.

Whatever the rights and wrongs, Draft FCB has now been sacked as well, with potentially devastating consequences. Under pressure from clients, IPG is dismantling certain parts of the recent merger. Now that the unzipping process has begun, it is not at all obvious where it will end.

For WPP, on the other hand, this is an opportunity not to be passed up. From a new shortlist of three, Omnicom has now withdrawn. The other competitor is The Martin Agency – an IPG subsidiary.

Those look pretty good odds. Although, in the world of marketing you can never tell, can you?


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