Wal-Mart Stores Inc. (NYSE:WMT) may be picking a new ad agency to handle its worldwide advertising duties as early as today. The world's largest retailer apparently wants to get a new agency onboard as quickly as possible after the recent fiasco involving two Wal-Mart ad execs leaving the company the the former ad agency -- DraftFCB from Chicago -- getting fired on the spot.

A published report states that Wal-Mart may indeed pick a new ad agency as soon as today, and the two finalists include some earlier usual suspects, including Ogilvy & Mather and the Martin Agency.

When Wal-Mart put its ad account up for review this year after having spent years with Omnicom's (NYSE:OMC) GSD&M, the global ad agency probably felt snubbed -- so much that after Wal-Mart fired DraftFDB, the Omnicom division said it would not return to compete for Wal-Mart's business.

In what appears to be a possible cover (if you ask me), Interpublic -- owner of the DraftFCB ad agency based in Chicago -- has said that it did "nothing wrong" in its recent sales pitch to retailer Wal-Mart Stores, Inc. (NYSE:WMT).

Wal-Mart recently dismissed two executive advertising staff members in the wake of a possible "inappropriate conduct" scandal, and at the same time, DraftFCB was dismissed from Wal-Mart as its new ad agency due to ... well, ad exec Julie Roehm's relationship with that company. Or was it a possible conflict of interest that got DraftFCB the job in the first place? We'll never know.

DraftFCB is backing itself saying that it did not do a thing wrong when winning the account, and even DraftFCB's CEO, Howard Draft, is being backed by the parent company Interpublic. Was this just a case of culture friction, or is there more to this?

Last week, Draft issued a memo titled "Truth and Trust" to staffers and select clients that seeks to end the rampant industry speculation and media coverage since DraftFCB was fired by Wal-Mart.

With the recent dismissal of advertising chief Julie Roehm and the firing of ad agency DraftFCB, the Wal-Mart Stores, Inc. (NYSE:WMT) ad account -- some $580 million -- now appears to be up for grabs. Who is salivating in their seats to grab a piece of that action? The firms which are chomping at the bit need to temper their enthusiasm given the demands that a company like Wal-Mart will most likely have. That is, no "flash and grab" kinda stuff, but more "core values of shopping" type of stuff (that actually works). Roehm obviously didn't have it, and the door she was shown.

I still believe that Wal-Mart struggles from an image and branding problem -- that is, if it wants to dig itself out of the "low price" hole and brand itself more than that. With Wal-Mart about to run another ad agency review in order to pick a new ad firm, finalists from the last round of the competition will be notified this week about who is eligible to pitch in the new contest and how Wal-Mart will run the new review. Of course, DraftFCB will not be in the running for the review, which Wal-Mart wants to conclude by Feb.1 of next year.

With Roehm recently saying that a marketing review process "can be uncomfortable for a conservative company," it makes me wonder what kind of advertising nonsense these ad firms pitch to clients. With so many eyeballs to try and reach and with the "distraction culture" of the Internet/iPod/Xbox/Lifetime Channel/what-have-you, ad firms are up against the wall to try and make an impression on customers who are constantly bombarded with marketing in every facet of life.

It's safe to say that Wal-Mart's culture is "conservative" because the company is in every way. Nothing wrong with that at all -- different cultures have different philosophies that are generally ingrained by their founder (Sam Walton in this case). A recent Wal-Mart exec hinted that Wal-Mart's advertising will focus on "price leadership on the hottest gifts," with current ads including a frugal dad who is happy that his family buys gifts at Wal-Mart.

Just what is the ad agency DraftFCB going to do now that an emerging scandal is erupting between one of the company's just-won largest accounts with Wal-Mart Stores, Inc. (NYSE:WMT) and Wal-Mart's former head of advertising, Julie Roehm? Although we've covered this situation in detail here and here, the question of the hour while this situation continues to develop is what impact this is going to have on DraftFCB now that one of the agency's largest accounts has told them to hit the road.

Wal-Mart's $580 million deal with DraftFCB has been dropped and the agency has yet to officially respond to the mess in Bentonville that is currently underway. The Windy City is probably alive with talks of retail chatter right now, but DraftFCB 's flagrant chief Howard Draft is now probably having an ulcer or two according to industry estimates. He should. This was probably in no small part due to his actions along with Ms. Roehm's apparent hot-seat cult of personality.

Will DraftFCB react quickly (tick, tick) to restore its reputation? It should -- and fast. Crisis communications are probably just standing around studying this situation for future case studies, and right now, not a darn thing is coming from its Chicago headquarters. I'd be concerned if I was an ad exec looking to pick an agency and DraftFCB had a scandal underway with no public response to why it was "fired".

Julie Roehm contradicted everything that Sam Walton ever held dear, and her hiring a year ago had many Wal-Mart Stores, Inc. (NYSE:WMT) observers scratching their heads. Famous for her racy, attention-getting antics -- like her "Lingerie Bowl" in which models clad in underthings played 'football' -- Roehm never seemed the right sort for Wal-Mart. She was fast cars, sex and rock-and-roll to Wal-Mart's Buicks, family values and Barry Manilow. In fact, her transformation of the shareholder meeting from boring to off-Broadway was a spectacle to behold (and, it seems, had old-line Wal-Mart executives "groaning," according to the New York Times.

[Recent Julie Roehm news:
Wal-Mart should bring Julie Roehm back -- May 27, 2007
Julie Roehm claims Lee Scott violated ethics -- May 25, 2007
Julie Roehm says Wal-Mart charges invalid -- March 29, 2007
Wal-Mart countersues Julie Roehm -- March 20, 2007]

Now she's been ousted, amid allegations of an inappropriate relationship with a subordinate, and the advertising agency she chose -- DraftFCB of Chicago -- is unceremoniously dismissed before it even began work on the huge account.

How was this ever supposed to work? I have to ask. Wal-Mart executives, even Sam himself, were always told to sleep two to a room while travelling on business, and select the cheapest available lodging. The company has strict "fraternization" rules so that any relationship between colleagues is inappropriate. [While it's not said outright in anything I've read, it seems that Julie Roehm has been read-between-the-lines accused of sleeping with Sean Womack, a member of the marketing staff at a lower rank than Roehm. It doesn't shock me. People who work together sleep together, it's happened everywhere I've ever collected a paycheck.]

Wal-Mart is so not Julie Roehm.

The chief of advertising at global retailer Wal-Mart Stores, Inc. (NYSE:WMT) has left the company. Julie Roehm, the head of advertising who led the selection of Chicago-based DraftFCB as the retailer's new ad agency, will be leaving Wal-Mart after less than a year on the job. Now that was a short tenure.

It is unclear whether Wal-Mart will reconsider the hiring of DraftFCB or alter its marketing strategy, but given the timing it is likely that Roehm's departure is tied to her decision to hire DraftFCB as Wal-Mart's ad agency. Apparently, the ad agency has has had little success preventing Wal-Mart customers from defecting to other stores like Target Corporation (NYSE:TGT).

In addition to Roehm, Sean Womack -- vice president of marketing -- has also left the company. Hmm -- two marketing execs leaving at the same time? Suspicious. I think Wal-Mart's image as a dirt-cheap retailer is still intact, regardless of its efforts to move into higher-margin goods and even offer organic food and produce to its customers. Can Wal-Mart ever change its focus and image from a retailer of all-things-Chinese-made to higher-margin-retailer-with-appropriate-marketing? That will be like turning the Titanic before it sinks.

Proof is in the pudding, as sales at the retailer have been sluggish. When Roehm was hired and then herself hired DraftFCB, the moves seemed to signal a change in marketing focus to highlight different goods and rely on a more highly targeted approach to reaching consumers. It didn't happen, as Wal-Mart's holiday season advertising message has reverted to being all about low prices. And that may be all it's ever known for.