Brownwood Native and GSD&M President "faces fight for Wal-Mart account"

GSD&M faces fight for Wal-Mart account
Account held by the Austin advertising agency since 1987 goes up for review.
By Robert Elder
AMERICAN-STATESMAN STAFF
Friday, May 05, 2006

Wal-Mart Stores Inc., one of Austin-based GSD&M Advertising's oldest and most valuable clients, has put its massive advertising account up for grabs.
GSD&M landed the account in 1987. Wal-Mart was one of GSD&M's first national clients, along with Southwest Airlines Co. and Coors beer (now Molson Coors Brewing Co.), and helped make the agency a national firm.

Roy Spence, president of GSD&M, says Wal-Mart's decision was 'inevitable.' photo caption

GSD&M has shared the account with Bernstein-Rein Advertising Inc., a Kansas City, Mo., agency that has had a big part of Wal-Mart's advertising business for 32 years.
Both agencies will compete for the account again, and GSD&M President Roy Spence said he expects them to have plenty of company.
Wal-Mart "will be the most high-profile pitch for the whole industry in a decade" because the advertising account hasn't been in play for so long, he said.
Wal-Mart "has not had a full agency review in more than 30 years," said Spence, a co-founder of the agency. "The bottom line is that it was inevitable . . . This is a company that is now entering a transformational period."
GSD&M, a unit of New York-based Omnicom Group, wouldn't disclose how the Wal-Mart account contributed to its estimated $110 million in revenue last year. Spence said between 30 and 50 employees make up the core team that works on the Wal-Mart account.
The Wal-Mart account is worth $578 million a year in billings in the United States, but that is just a measure of how much the company spends on its creative and media work. Ad agencies reap a small portion of total billings.
Wal-Mart recently has launched initiatives to appeal to a more upscale customer. For instance, it plans to double its organic product offerings and has been revamping its advertising, which for years focused on its low prices.
In September, the retailer advertised in Vogue for the first time, pitching a fashion line called Metro 7. GSD&M handled that campaign.
Wal-Mart has assembled a new lineup of marketers in recent months under John Fleming, who was named its chief marketing officer last year. Fleming joined Wal-Mart in 2000 after 19 years at rival Target Corp., which is known for its distinctive ads.
Fleming has hired well- regarded marketing executives from Chrysler Group and Frito-Lay.
Incumbent agencies typically win about 10 percent of the accounts their clients put up for review.
"These kind of things really challenge you and put the adrenaline in," Spence said. "It's a great account and we've had a great run, and we'll continue to have a great run. But it will be a fight."
GSD&M ranked 20th by revenue among U.S. advertising firms last year, up one spot from 2004, according to Advertising Age magazine.
The agency is currently shepherding AT&T Inc.'s ad campaign, spurred by longtime client SBC Communications Inc.'s acquisition of the former AT&T Corp.
Last year, the firm won the prized BMW of North America account.

relder@statesman.com; 4445-3671
source: http://www.statesman.com/business/content/business/stories/other/05/5gsdm.html