WMT Walmart Inc

By Nathalie Tadena 

Wal-Mart Stores Inc. has consolidated much of its U.S. creative account with Publicis Groupe, signaling a potential change in the massive retailer's advertising strategy.

Publicis on Tuesday said it's launching a new entity to handle U.S. advertising and in-store marketing work for the retailer. Publicis' relationship with Wal-Mart isn't exclusive and initially applies to the retailer's U.S. advertising and in-store creative, for which the French ad giant will serve as the primary agency of record.

Publicis' Saatchi & Saatchi agency already worked on parts of Wal-Mart's creative business and its Saatchi X shopper marketing agency worked on the in-store business. The Martin Agency, owned by Interpublic, had been Wal-Mart's lead agency for advertising since 2007. A Martin spokeswoman confirmed that the agency's relationship with Wal-Mart will end in September.

Wal-Mart, a major ad spender, late last year named Tony Rogers as its new U.S. chief marketing officer. When a new CMO comes in, It is common for a marketer to re-evaluate its agency roster and chart a new creative direction. A spokeswoman for Wal-Mart said there are no plans to change the company's longtime slogan: "Save Money. Live Better."

"Our ambition globally is to make every day easier for busy families, and having best-in-class marketing is critical to achieving that goal," said Doug McMillon, president and chief executive officer of Wal-Mart, in a statement. "This relationship with Publicis Groupe will help us think and act differently, which will ultimately enable us to serve our customers even better."

Publicis said it would pull resources from the agencies across its portfolio "to ensure the right talent is working on each Wal-Mart project." The retailer will also have access to Publicis resources outside of marketing, including corporate reputation capabilities and technology that builds relationships with customers, Publicis said.

"Wal-Mart is already implementing innovative approaches to reach its customers," Publicis Groupe CEO Maurice Levy said in a statement. "Our goal is to leverage all of Publicis' assets -- not just the resources of one agency -- to help them in these efforts."

The Wal-Mart relationship will be led by Arthur Sadoun, who heads Publicis' creative agencies. Mr. Sadoun is a rising star within Publicis Groupe and is seen as a contender for the CEO role when Mr. Levy retires next year.

Publicis last year unveiled a companywide reorganization in a bid help the French ad giant win more business and break down silos after disappointing financial performance in recent years.

"The joint decision to launch this initiative is living proof of the power of our new organisation and a good example of how to redefine our relationship with our clients by bringing them the alchemy of breakthrough creativity and technology," Mr. Sadoun said of the Wal-Mart relationship in an internal memo.

Earlier this year, Publicis' Mediavest lost Wal-Mart's North America media account, a major blow for the media buying agency after losing business in North America from other big clients including Procter & Gamble and Coca-Cola.

Wal-Mart spent an estimated $902.4 million on U.S. ads in 2014, not including digital video, social or mobile advertising, according to WPP-owned ad tracking firm Kantar Media. The company has been boosting investment in online operations and has tried to simplify its store operations amid sluggish U.S. sales growth.

Sarah Nassauer contributed to this article.

Write to Nathalie Tadena at nathalie.tadena@wsj.com

(END) Dow Jones Newswires

July 12, 2016 15:28 ET (19:28 GMT)

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