"We’re looking for a shorter core roster of professional and consumer agencies who can help us brand by brand," said Kurt Graves, Novartis’ chief marketing officer. Based at the company’s headquarters in Basel, Switzerland, Mr. Graves was in New York last week to hear pitches.
"This is really going to be an opportunity to upgrade our roster," Mr. Graves said, "and get more high-powered agencies in so we have two, three, four integrated shops working across various platforms."
A decision is expected by late this month. Deborah Dick-Rath, Novartis’ head of global advertising who is based at the company’s U.S. headquarters in East Hanover, N.J., is also involved in the review.
Mr. Graves said the decision to put Novartis’ direct-to-consumer and professional accounts up for review was based on a meeting the company had in February, when it invited 300 of its top executives to planning sessions in Florida.
"We rolled out a global marketing model internally and we’re trying to be consistent with that," he said. "One of the central things was to be more consumer-centric, and that’s how we’re going to build our global brands. We’re going to select a group of agencies, both professional and consumer, that can work hand-in-hand with us to execute this model."
Incumbents: Merkley and Deutsch
Novartis’ three biggest DTC drugs are Zelnorm, for irritable bowel syndrome; Elidel, for eczema; and Lamisil, for toenail fungus. Omnicom Group’s Merkley & Partners, New York, handles Elidel. Interpublic Group of Cos.’ Deutsch, New York, handles Zelnorm and Lamisil. Deutsch also does a consumer awareness campaign for high blood pressure that, though unbranded, drives consumers to Novartis’ Diovan and Lotrel blood pressure drugs by offering a money-back guarantee, but only if patients use those two medications.
Together, those four campaigns have accounted for $194 million in measured media spending through the first six months of this year, according to TNS Media Intelligence/CMR. In fact, in an interview earlier this year, Novartis Pharmaceuticals CEO Thomas Ebeling said the company would up its spending in 2004, and the drug maker has done exactly that.
Novartis spent $68 million, $47 million and $38 million, respectively, on Elidel, Zelnorm and Lamisil in all of 2003. In just the first half of 2004, it has already spent $43 million on Elidel, $76 million on Zelnorm and $36 million on Lamisil.
Specialty agency Noesis
Merkley, as well as Deutsch, are among the roster shops who are pitching. WPP Group’s Noesis, a Parsippany, N.J.-based agency that specializes in physician advertising and already handles Elidel and Lotrel, is also pitching.
Mr. Graves did not name all the agencies involved, but some nonroster shops who were invited include Omnicom’s DDB Worldwide and Publicis Groupe’s Saatchi & Saatchi, both New York, and InChord Communications’ GSW, an agency based in New York and Ohio that specializes in advertising to health care professionals.
"We pitched, but they haven’t said to us how it’s going to play out," said one agency president. "They haven’t decided if they’re going to consolidate one brand inside one agency, or split it by disciplines or even split it by geography."
Mr. Graves said those decisions will be made in the coming weeks.
"We left after what we thought was a very good week wondering which was more important: creative and strategic capabilities in both consumer and professional, or those [agencies] with a global network," he said. "We’ll have some decisions to make. Nobody has both."
Mr. Graves said one thing he will not do is consolidate at one holding company, as some of his pharmaceutical peers have done. "The shortest answer is we’ll do what’s best for the brand," he said. "It might make logical sense for some to do it in one network, but it won’t all be in one holding company."