Draftfcb is back in the retail game, winning Kmart’s estimated $225 million advertising account without a review.
The business includes customer relationship marketing, branding and media advertising, but not consumer promotions. Draftfcb takes over the business from Kmart’s longtime ad agency, Grey Worldwide, on May 1.
The first work Draftfcb tentatively will tackle is Kmart’s back-to-school campaign, said company spokesperson Chris Brathwaite.
This week’s win follows Draftfcb’s high-profile loss of Wal-Mart’s $570 million account in December amid a scandal that drove out Wal-Mart’s top marketer, Julie Roehm, who led the review that chose Draftfcb. Wal-Mart dropped the agency before its contract even began (PROMO Xtra, Dec. 11, 2006). That assignment did include promotions.
Kmart stands to benefit from the prep work that Draftfcb did to gear up for Wal-Mart. The retail chain also can leverage the agency’s direct-marketing expertise, and its month-old retail marketing division, to build shopper loyalty.
“We’re committed to building lifetime relationships with our customers and Draftfcb has a proven track record of helping its clients achieve success by utilizing a full range of marketing tools and capabilities,” said Bill Stewart, Kmart’s chief marketing officer, in a statement. He said that Draftfcb is “uniquely qualified to assist in our needs right now.”
Kmart needs a push. Its 2006 sales were $18.7 billion, down 2% from 2005, with 28 fewer stores. Same-store sales were relatively flat, down only 0.6%, according to parent Sears Holdings Corp.
Draftfcb will add staff to handle the new business; the number of new hires hasn’t been determined yet.
Draftfcb will handle Kmart’s TV, magazine and radio advertising; customer analysis and strategy; data analysis; and CRM work. The company spent $225 million on measured advertising in 2006, according to TNS Media Intelligence. Of that, it spent $148 million on TV, radio and magazines.
Draftfcb launched its shopper marketing division in mid-March with a staff of four, led by Jim Lucas, and three current clients: Kellogg, U.S. Postal Service and the Ontario Lottery & Gaming Board (PROMO Xtra, March 12, 2007).
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