Advertising Age reports that Walmart is pressing its suppliers to allocate a greater percentage of both their consumer ad budgets and trade promotion dollars to the retailer, and is “using a simultaneous push to clear underperforming brands off its shelves as extra leverage.”
Walmart is looking for suppliers to fund co-branded advertisements and commercials as well as banner ads on its website and in-store television sponsorships.
According to the story, “It's probably the boldest retailer grab for suppliers' consumer marketing funds ever, if only because the amounts involved are so huge. Some package goods companies do more than 30% of their U.S. business at the retailer. Complying with Walmart's guidelines would, in theory, mean a company the size of Procter & Gamble Co. diverting around $1 billion in U.S. media dollars into Walmart's media budget or marketing and merchandising vehicles -- a sum roughly equivalent to what Walmart spent on all of its own measured media last year, according to TNS Media Intelligence.”
Ad Age says that there is no evidence that Walmart has been successful in getting suppliers to accede to its wishes – in part because if manufacturers do it for Walmart they’ll have to do it for Walmart’s competitors or face legal challenges.
This move comes as Walmart also is applying pressure to suppliers on the environmental front, asking them to be part of an indexing process that will evaluate their “green” quotient.
Walmart is looking for suppliers to fund co-branded advertisements and commercials as well as banner ads on its website and in-store television sponsorships.
According to the story, “It's probably the boldest retailer grab for suppliers' consumer marketing funds ever, if only because the amounts involved are so huge. Some package goods companies do more than 30% of their U.S. business at the retailer. Complying with Walmart's guidelines would, in theory, mean a company the size of Procter & Gamble Co. diverting around $1 billion in U.S. media dollars into Walmart's media budget or marketing and merchandising vehicles -- a sum roughly equivalent to what Walmart spent on all of its own measured media last year, according to TNS Media Intelligence.”
Ad Age says that there is no evidence that Walmart has been successful in getting suppliers to accede to its wishes – in part because if manufacturers do it for Walmart they’ll have to do it for Walmart’s competitors or face legal challenges.
This move comes as Walmart also is applying pressure to suppliers on the environmental front, asking them to be part of an indexing process that will evaluate their “green” quotient.
- KC's View:
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Proving, I guess, that Walmart isn’t satisfied with just twisting arms. It also likes to twist other appendages…because “green” is a word with a financial as well as environmental implications, and Walmart is highly capable of multitasking.
