By: E&P Staff
Wal-Mart Stores Inc. has decided against buying more advertisements in local newspapers after a test in two states showed the expense is not justified, the world’s largest retailer said Wednesday.
Wal-Mart’s test run in Midwestern papers had been closely watched by publishers who complained publicly last year that Wal-Mart sought free publicity from their newspapers but refused to buy ads _ all while driving out local businesses that had been mainstays.
In a bid to improve community relations, Wal-Mart agreed to run a test in the holiday shopping season. It placed a full-page color ad for its electronics department in 336 smaller papers in Missouri and Oklahoma between Nov. 30 and Dec. 6.
“Our test showed that it did increase product sales but our margins are so thin that we didn’t even come close to offsetting the cost of the ads,” Wal-Mart spokeswoman Mona Williams told The Associated Press Wednesday.
Mike Buffington, a Georgia publisher who has been the point man in talks with Wal-Mart by the National Newspaper Association, said Wal-Mart told him last week the company’s return wasn’t high enough. At the Newspaper Association of America meeting at Chicago on Tuesday, Wal-Mart Chief Executive Lee Scott said newspaper advertising “didn’t give us a return,” but didn’t offer specifics about the tests.
Buffington, past president of the NNA and co-publisher of MainStreet Newspapers Inc. in Jefferson, Ga., said not all publishers would agree that a company could reach a decision on costs versus benefits after a single ad.
“Our view is that a one-time test is probably not a true way to evaluate community newspapers. In fact we understand they had quite a bump in sales. But the advertising itself, the full-page color ads, were expensive and they were advertising loss-leader type items,” he said.
Wal-Mart declined to say how much it paid for ads used in the tests.
Buffington last year, as president of the NNA, wrote an open letter accusing Wal-Mart of ignoring the association’s 2,500 members. Wal-Mart has said it does not advertise as much as other retailers locally because it has strong customer traffic anyway.