Consolidation? Not in the J&J Media Review

Marketer Seems Set to Keep Using Patchwork of Shops for $3 Billion Business

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NEW YORK (AdAge.com) -- When Johnson & Johnson announced its global media review, it said it was looking to "enhance the ability of our brands to effectively communicate and leverage investment across the rapidly changing and increasingly diverse media landscape." With decisions expected early this week, it looks like a lot of work has been put into changing very little.
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J&J officially called a global review of its media-buying and planning accounts at the end of March, putting $3 billion in international media spending in play. The contest had been anticipated since the package-goods giant acquired $16.6 billion in over-the-counter-drug and personal-care brands from Pfizer last year. By dropping Aegis Group's Carat -- which handled the Pfizer business -- almost immediately and announcing it would sit out this year's upfront, Johnson & Johnson fueled speculation that it has been looking to consolidate and cut costs.

One person close to the company, however, suggested J&J's decentralized structure renders consolidation -- and efficiency -- hard to come by.

Little change
An under-the-radar creative review did cut down the presence of one roster agency -- Interpublic Group of Cos.' McCann Erickson lost five of the several brands it handles in the U.S. -- while solidifying independent Mother's place on the agency roster. Yet the number of agencies the consumer-product company is handling remains roughly the same.

JWT was one of the big winners in the creative shift, taking on Reach and Band-Aid from McCann and Pepcid, Cortaid and Mylanta from former Pfizer agency Alchemy. BBDO also gained Monistat and Stayfree from McCann and, in an official competitive review, won Splenda from Alchemy. Mother added K-Y sexual-health products to the Rembrandt business it already held.

While the media review has been more public, the results are not likely to differ much. Interpublic's Intiative, which handles media buying throughout Western Europe, Africa and the Middle East; Universal McCann, which handles most buying in Latin America in addition to Southeast Asia; and OMD all stand to gain media work. WPP Group's MindShare, which handled media planning for Pfizer consumer brands outside of the U.S. and Listerine globally has dropped out of the review, and nonroster shop Aegis Media has taken its slot in the pitch.

Consolidation in U.S.
With early reports out of Asia suggesting Omnicom's OMD will continue to handle buying and planning in China and Universal McCann will retain planning duties in Southeast Asia, it looks like consolidation, if any, will take place in the U.S.

Within the U.S., Universal McCann and OMD handle the most buying and planning. Independent media agency Naked handles communications planning, and Mediaedge:cia handles interactive buying for nonconsumer Pfizer brands.

According to a previous Advertising Age report, J&J's 2006 media outlay amounted to 95% of its spending reported by TNS, which is based on media rate cards, in comparison to rival P&G, whose actual U.S. media spending is only about 69% of its outlay as reported by TNS. P&G's larger discount may come from the fact that it has all of its U.S. spending consolidated with Publicis Groupe's Starcom MediaVest Group.

J&J could be looking to emulate its rival in search of savings, but people close to the company suggest media will continue to be split between OMD, Universal and Naked.
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