Lowe-Deutsch Conflict Spurs Zicam Agency Review

With Merger of Two IPG Shops, J&J Business Became a Conflict

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NEW YORK (AdAge.com) -- The maker of cold remedy Zicam, Matrixx Initiatives, has begun the second review of its $30 million ad account in the span of a year, due to an account conflict spurred by the merger of Zicam's current agency, Lowe, New York, with sibling Deutsch.

"We are conducting an agency review [with] a small number of agencies and should have a decision by the beginning of January," Tim Connors, VP-marketing at Matrixx Initiatives, said in an e-mail. "Out of respect for past, current and future partners, we are not discussing which agencies are involved in the search."

This past May, Zicam handed its account to Interpublic Groupof Cos.' Lowe after a four-month review -- marking the first time the company had ever put its advertising out to bid. Matrixx spent about $30 million to market Zicam in 2008, and had said spending this year could increase up to $50 million.

But when Deutsch absorbed Lowe's U.S. ad agency operations last month, Zicam was left in the lurch. The move created a conflict with Johnson & Johnson, a key client for Deutsch, and The New York Times reported the agency planned to move the Zicam account, along with the Lowe employees who work on it, to another Interpublic agency.

In a sign that wasn't likely to happen, Mr. Connors told Ad Age at the time: "We'd like to be supportive, but we'll ultimately make a decision that's best for our business."

Zicam isn't the only account conflict borne out of the Lowe-Deutsch union, executives familiar with the matter said. Another account that Lowe picked up in 2009, sleep-aid medication Lunesta, bumps up against J&J's Tylenol PM brand.

Lunesta has changed agencies three times in as many years -- moving from Interpublic's McCann Erickson to Publicis Groupe's Kaplan Thaler Group and then Lowe. Now it will be forced to make another agency change, though it's unclear if its parent, Marlborough, Mass.-based Sepracor, is planning to hold another review. A Deutsch spokeswoman referred calls to Sepracor, which didn't return calls.

Sepracor, which last month was acquired by Japanese pharma company Dainippon Sumitomo Pharma Co., has slashed its domestic ad budget by more than half, according to TNS Media Intelligence. The company spent over $270 million in measured media in 2007, but that fell to $111 million in 2008, nearly all of it devoted to marketing Lunesta.

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