Retailer to Funnel Funds Into Individual Business Units
By: Laurel Wentz Ad Age
Walmart Stores is going to “blow up” its multicultural marketing budget and move the money into the company’s individual business units, said Tony Rogers, senior VP-brand marketing and advertising, at the ANA’s Multicultural Marketing & Diversity Conference today in Miami. “I’ve come to the conclusion that if you really want to be serious about multicultural, one way to do it is just blow up the multicultural budget,” Mr. Rogers said. “Take the multicultural budget out of a silo and push it out into the business units. [And] you’ve got to protect the budget and make sure it doesn’t just dissolve away.”
At Walmart, for instance, if a marketer works in a category group like food, “I’m now handing you a budget that includes a very strong multicultural component,” he said. “That makes it more difficult for that marketer to ignore any part of it. If those budgets are sitting in a silo, there’s an assumption that someone else [is taking care of it].”
Mr. Rogers said this change is happening “in real time.” The new system will include linking compensation to multicultural performance, he implied. “You’ve got to make sure this marketer has four or five objectives for the year,” he said. “One of those objectives has to be how did you do against multicultural.” Walmart’s main multicultural agencies are Lopez Negrete Communications, one of the biggest independent Hispanic agencies, GlobalHue for African American work, and Interpublic Group of Co.’s Asian agency IW Group.
Procter & Gamble, the biggest multicultural marketer, made a similar move about a year ago to push multicultural budgets into individual product categories and brands from a more centralized multicultural unit and tie managers’ bonuses to multicultural performance. Ethnic agency assignments were also realigned. And as a precaution, P&G guaranteed its multicultural agencies’ revenue for three years to help smooth the transition.
Mr. Rogers spoke today to a record 700-person crowd at the ANA’s annual multicultural gathering. In a fireside chat with Jacqueline Hernandez, chief operating officer of Telemundo Communications Group, Mr. Rogers said he had just come from running the New York marathon on Sunday and drew applause for delivering Walmart’s slogan in Spanish: “Ahorra mas, viva mejor.” (“Save more, live better”).
He described his own journey as a marketer over the last decade and said there are three levels of “getting” multicultural marketing. The first level of “getting it,” he said, “is not doing anything.” The second level is recognizing its importance, but keeping efforts pretty siloed, like spending some money during Black History Month and Hispanic Heritage Month and considering the multicultural box to be ticked off. “The next step is where we are — making multicultural part of everything we do,” he said.
He cited Walmart’s recently rolled out layaway program, saying it’s incredibly popular among multicultural customers and that “not leading with a multicultural message, that’d be crazy.” He also said Walmart found that the interaction with recent digital ad for the layaway program, done in both Spanish and English, was three times higher for the Spanish-language version.
For Walmart’s current Christmas price-guarantee program, each multicultural ad is based on a relevant insight, Mr. Rogers said. The humorous African-American spot revolves around food and extended family. The camera zeroes in on individual food items like pie, and adds a price tag to show how affordable it is. One missing pie is tracked down to an errant uncle sneakily devouring it in another room, so he’s relegated to the kids’ table at the feast.
The Hispanic spot is based on abundance, with a huge stack of gifts at the store, which Mr. Rogers said has prompted store managers to ask if they can build a similar stack in their own premises. A third TV ad, in Chinese, reflects a Chinese saying about comparing prices three times before buying.