GSK Awards Media Business to Omnicom's PHD and Mediacom

Global Shift Comes As GSK Completes Joint Venture with Novartis Brands

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Pharma and consumer-health giant GlaxoSmithKline has awarded its global media agency account, including part of GSK's recently added Novartis health and vaccine business, to incumbents PHD and Mediacom, according to people familiar with the matter.

PHD referred calls to the client, which didn't immediately respond to a request for comment. Neither GSK nor Mediacom immediately responded.

Incumbents for GSK and Novartis were invited to pitch for the more than $600 million combined media business in the latest review, which followed the completion of GSK's deal with the rival pharma giant. The deal granted GSK a 63.5% stake in a $10 billion global joint venture, combining both companies' over-the-counter consumer health-care operations. As part of the pact, GSK also acquired the bulk of Novartis' global vaccines business and sold its oncology portfolio and rights for future products to Novartis.

Two years ago, GSK consolidated the bulk of its global media buying and planning account with WPP media agency network GroupM and Omnicom's PHD. At the time, GroupM, largely through its agency Mediacom, won the international business. PHD kept its role as lead media agency for the U.S. while adding a global communications planning assignment, as well as the media business in Canada, to its remit.

After last reviewing its business in 2011, Novartis selected Publicis Groupe 's Starcom as its agency to handle its more than $600 million global media account. Starcom, which has been supporting the account with help from sibling shop Mediavest, pulled out of the most recent review, forfeiting its existing business and the opportunity to grow its account.

Novartis spent $91 million on domestic measured media in 2014, down 31% from the $133 million it spent in 2013. By contrast, GSK spent $453.3 million on measured media in the U.S. in 2014 -- 10% less than it spent in 2013. The company spent $1.11 billion on total global advertising in 2014, according to the Ad Age Datacenter.

While the $7.1 billion consumer health portfolio made up only a fraction of GSK's revenue compared to its $30.8 billion pharmaceuticals and vaccines businesses in 2014, the company still spent the bulk of its media dollars on over-the-counter and consumer brands. GSK's top-spending brands include Sensodyne ($93.4 million); Abreva ($25 million); Tums ($23 million); and NicoDerm CQ ($23 million). However, GSK's Breo Ellipta, a prescription drug for COPD, spent the most -- $97 million -- on measured media in 2014, following its FDA approval in 2013.

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