AMV BBDO has won Asda's creative account following a surprise review that kicked off earlier this year.
The agency pitched against incumbent of two years Saatchi & Saatchi, Leo Burnett and J Walter Thompson London.
The retailer's chief customer officer, Andy Murray, said: “We are delighted to appoint AMV BBDO. Their brilliant team and inspiring work has given us real confidence that they understand Asda and how to connect with our value-seeking, busy customers.
“We are all excited about working together and the work we will produce over the next stage of our growth. I also want to thank Saatchi & Saatchi for their partnership and creativity over the past two years.”
It’s a coup for the agency after it lost Sainsbury's advertising account to Wieden + Kennedy, ending a near 40-year relationship, in 2016.
AMV BBDO chief, Cilla Snowball, said it was an "important moment for the agency" to be working with an "iconic" brand.
"We’re raring to go and can’t wait to get behind Asda’s plans for growth," she added.
The shake-up of the creative account came as part of a much wider evaluation of Asda’s entire advertising business as the supermarket looked to consolidate the hundreds of agencies it worked with and create an "agency ‘ecosystem’ model."
Publicis-owned Saatchi & Saatchi won the creative account from VCCP 2016 after Andy Murray – a former executive at the ad agency’s shopper marketing division – took on the retailer’s top marketing job in the UK.
Since joining he has overhauled the structure and strategy of the brand, reducing the amount of marketing activity it does as well as building an internal customer and marketing team “that is less channel centric and aligned to foster and launch ideas that are more salient to our customers’ needs”.
Launching the review, Murray said he was looking for an agency “where big creative ideas come to life in ways that match how we want to engage with customers across channels, both physical and digital".
It's hard to assess the impact Saatchis has had on the business. When the agency took on the account, Asda was battling the worst sales figures it had seen in a decade.
A year into the partnership and things weren’t much better, with sales still falling despite a series of James Martin-fronted ads and an all-important Christmas campaign that left it the worst performing supermarket over the 2016 period, according to Kantar Worldpanel.
With Murray focusing more on how the customer experience – not just ads – could be improved in 2017 there were remarkably few blockbuster advertising campaigns – save for its popular Christmas ad ‘The Imaginarium’.
Though this tactic resulted in a mini-revival for the brand, noting a “strong” festive period to cap off four consecutive quarters of rising sales, it was not enough for Saatchis to hold on to the coveted piece of business.
Asda said that AMV BBDO will begin work with the brand with immediate effect, sitting at the heart of the "agency ecosystem" and leading an integrated team that includes fashion agency Wednesday, Redwood, Proximity and EG+.
Publicis Groupe’s Blue 449 continues as the incumbent for media planning and buying.
According to Nielsen ad spend data for 2017, which excludes digital, Asda was the third biggest ad spender for the year, investing £61m (though that was down 3.2% from the previous year).
But it was nearly £30m less than main rival the UK's top spender Tesco which upped its investment by almost 72% to £89.5m, and also behind discount retailer Lidl which spent £71m on marketing for the brand.