Behind the Wal-Mart, DraftFCB Split

NEW YORK Looking back, it’s easy to pinpoint the day it went bad. DraftFCB, angling for every advantage it could get in Wal-Mart’s $570 million blockbuster review, invited client svp of marketing communications Julie Roehm to speak at the shop’s Sept. 20 presentation to some 35 search consultants visiting New York shops as part of AdForum’s annual one-week tour. It was an invite that would eventually help undo both Roehm and DraftFCB’s relationship with the world’s largest retailer.

Roehm, seven months into her Wal-Mart tenure, spoke glowingly about the Interpublic Group agency, even though the shop was still in the midst of the review. The consultants were stunned and walked away from the hour-plus meeting with the impression that DraftFCB had already won the business, three weeks before final presentations, sources said.

Roehm did nothing to dispel that notion that night when she and vp of communications architecture Sean Womack joined a half-dozen DraftFCB executives at a dinner they threw for the consultants at a swanky midtown restaurant, Nobu 57. The group occupied a series of tables in an upstairs loft area and ate, drank and socialized for several hours, with sources saying that Roehm sat and was photographed on the lap of at least one male DraftFCB executive. The agency picked up the tab, an IPG representative confirmed.

The events of Sept. 20 were particularly shocking to Wal-Mart executives, who are renowned for their austerity when it comes to corporate expenses and gifts. They have been seen paying for drinks at open-bar events and bringing their own food in brown paper bags to catered meals in order to stay within their strict ethics rules.

The picture of coziness between two Wal-Mart marketing executives and DraftFCB emerged last week after the retailer cut ties with Roehm and Womack amid allegations of what sources described as a personal relationship between the two and the acceptance of gratuities from potential vendors. Wal-Mart later undid the October hiring of DraftFCB and Carat and relaunched the review of its creative and media account, with Carat invited to participate, but DraftFCB told to stay home.

Roehm on Friday responded to the widely reported allegations about her dismissal. Regarding her relationship with Womack, she said, “Of course we have a personal relationship, because we’re friends, but I think that what is to be denied is that there is anything improper about our relationship.”

She took issue with others’ characterization of the Nobu dinner as well, saying she accepted no gratuities. “That event at Nobu, I don’t believe it was a dinner event. I believe that it was hors d’ouevres and drinks, but I paid for my drinks. It is customary at large events like that where there are no menus or meals but things are being passed around—we talk to the agency and ask them to bill us back and that agency in particular has done it in the past. … I don’t know for certain if they did. I didn’t check into it or check up on it, but I did pay for my drinks.”

As for the alleged photo of her on the lap of an agency exec, she said: “I’m not even sure whose [lap] it was, but if there was [a picture], it was completely innocuous. I’m sure I just sat there and was taking a picture with him. I don’t recall, but there was certainly nothing sexual about any of it. And I am certain if whoever has the photo would have produced it, you would see that.”

Sources said the morning after the Nobu 57 outing, Roehm attended a meeting with another contender, Ogilvy & Mather, and made reference to the late night she’d had with DraftFCB executives the night before. Earlier in the review, Roehm had joined Ogilvy staffers for a casual but orchestrated July afternoon barbecue outside the shop’s midtown office.

Some saw similarities with DraftFCB’s approach, but others said Ogilvy’s effort was different. “That’s pitch theater. That shows the enthusiasm for wanting the account, etcetera,” said Hasan Ramusevic of Hasan + Co., a Raleigh, N.C., search consultancy. “That was a closed session between the agency and the prospective client with no outside influences and therefore, that’s fair game to me.”

As of late Friday, the process of selecting a new agency appeared murky at best. A client rep said Wal-Mart hoped to make a selection by the end of January, when the contracts of incumbents GSD&M and Bernstein-Rein expire. The tight time frame suggested that previous finalist teams led by IPG’s The Martin Agency, Omnicom Group’s GSD&M and Ogilvy would simply be invited back. But as last week drew to a close, the shops were still awaiting word on whether they’d be reconsidered and if any new agencies would be added to the mix. Wal-Mart said only that the review would be “by invitation,” and IPG shops other than DraftFCB would be considered.

The specter of re-pitching business against newcomers may not appeal to previous contenders, who put much time and resources into the original review. “This was a very expensive process,” said a source at a previous contender, adding, “There are a lot of sore feelings.”

—with Jim Edwards and staff reports