Video: Wal-Mart battles its critics with new ads

Alison
By Allison Linn Senior writer
msnbc.com
updated 1/11/2007 4:40:02 PM ET 2007-01-11T21:40:02
ANALYSIS

After months of being dogged by its critics for everything from its wages and health care offerings to its environmental practices, Wal-Mart this week launched a national advertising campaign designed to fight back.

Faced with tough adversaries, analysts say it’s smart for the company to try remind people of the discounter’s folksy roots, and to tout the good it believes it does for communities, workers and families.

But there’s no guarantee the strategy will work. While companies commonly use public relations campaigns to show themselves to be good corporate citizens, the major pitfall they face is that customers may not believe them.

“What they’re trying to do is communicate to somebody about their image, and people know it’s coming from Wal-Mart, so it’s a source credibility problem,” said John Antil, associate professor of marketing at the University of Delaware.

The latest effort to sway public opinion comes as the company is struggling with efforts to lure in more upscale shoppers and fend off competitors, irking some shareholders. And the ads are appearing amid major upheaval in the company’s advertising and marketing efforts, including the abrupt exit of a top executive.

David Tovar, spokesman for Bentonville, Ark.-based Wal-Mart Stores Inc., said the television spots were the brainchild of the company’s corporate affairs department, and are separate from its other advertising and marketing plans.

“We know that we have to tell our story. Otherwise people will tell it for us,” Tovar said.

Wal-Mart’s two television spots feature happy parents frolicking with carefree kids, sentimental pictures of folksy founder Sam Walton and beaming employees extolling the virtues of working at Wal-Mart. Soothing voiceovers remind viewers of the company’s small-town roots and offer statistics arguing that Wal-Mart saves money for families and provides health insurance for workers.

The advertisements have already drawn criticism from activist group Wal-Mart Watch, which filed formal complaints with the attorneys general of Arizona and Nebraska after the ads aired in test markets last summer. Wal-Mart Watch spokeswoman Laura Jack said officials did not appear to investigate the group’s claims that the ads were misleading, but the group is standing behind complaints.

“It attempts to paint Wal-Mart in a much better light than we and many other people see them in,” Jack said of the campaign.

Faced with such detractors, a company like Wal-Mart has almost no choice but to respond with its own public relations campaign, said Jennifer Chang Coupland, clinical assistant professor of marketing at Penn State University.

She also thinks it’s smart to capitalize on the warm feelings people have for founder Sam Walton, and perhaps replace in consumers’ minds the more recent, negative things they have heard.

Such a strategy could work with shoppers who have liked the Wal-Mart brand and want to be reassured that it’s OK to keep shopping there, she said. But people who were already skeptical of the company may see the ads as a way for Wal-Mart to cover its tracks, raising the potential of a backlash.

Adam Hanft, chief executive of the branding and consulting firm Hanft Unlimited, thinks the ads could backfire precisely because they bring to mind the company’s beginnings, which are in stark contrast to its current standing as a multibillion-dollar merchandising powerhouse.

“They’re trying to go back to their roots, which was Sam Walton,” he said. “I think the problem is they’re light years beyond the avuncular guy who lived in Bentonville, drove a pick-up and got 99-cent haircuts or whatever.”

Such a down-home message also is inconsistent with other communications from the company, such as its recent acknowledgement that it is using advanced technology to schedule its thousands of workers more efficiently. To send such mixed messages can hurt a company’s credibility, Hanft said.

“Wal-Mart is under huge pressure. Its image is being threatened on a number of different fronts, and what we’re seeing out of Bentonville is a kind of schizophrenic, knee-jerk response to all this,” he said.

Hanft thinks the company would have more success if it more closely coordinated its public relations campaigns with its other advertising and branding messages. He also thinks the company should focus on areas where it can make concrete positive statements, such as its improving environmental commitment.

He would also recommend that Wal-Mart take more of a mea culpa approach.

“They need to be more transparent and more honest, and I think they need to admit that they did things wrong,” he said.

Antil, from the University of Delaware, said he sympathizes with Wal-Mart’s predicament, and thinks the company is facing some unfair criticism. Still, he doesn’t know if the ads will help.

“Will it work? I’d say the jury is still out on that,” Antil said.

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