NEW YORK (AdAge.com) -- After losing several major accounts last year, WPP's Mindshare has become one of the most formidable shops in the industry when it comes to winning new business. Today the shop snagged a large piece of business from CVS and is on its way to acquiring media duties at Radio Shack.
CVS has awarded its nearly $150 million media account to WPP's Mindshare, beating out sibling shop MediaCom and Omnicom Group's OMD, the retailer confirmed. Mindshare is also poised to pick up Radio Shack's $150 million media-planning and -buying account, beating out incumbent Aegis' Carat and Publicis Groupe's Starcom, according to industry executives. Radio Shack said it has not announced a decision. Mindshare referred calls to both clients.
CVS held simultaneous reviews for its media and creative assignments. Mindshare will be responsible for the CVS and pharmacy-retail business and for MinuteClinic. The business will be handled out of the New York office.
A decision on the creative review hasn't been made but Interpublic Group of Cos.' Hill Holliday, the incumbent on both accounts, did not take part in either review. According to executives with knowledge of the situation, there are two agencies still being considered for the creative portion of the business. Industry executives said WPP's Y&R and Havas' Arnold are the finalists and a winner could be named as soon as this week.
Under the leadership of North American CEO Phil Cowdell, Mindshare has run off an unparalleled streak of new-business wins over the last year. The shop also recently retained Unilever's $800 million North American media-planning and -buying account, while bringing in loads of new business including Abbott Laboratories' $230 million-plus U.S. media-planning and -buying account, the $220 million media account for Boehringer, the $100 million Farmers Insurance business, the $60 million Sun Products account and the $10 million Skyy Spirits business.
This was the first review CVS had held in eight years. In January, Rob Price, chief marketing officer for CVS, said it launched the reviews because the company had transformed from a regional drug store to a national health-care player with its revenues and store count more than doubling over that period.
"Right now, our momentum and projected growth demand a more powerful and integrated media and creative strategy," he said. "The industry has evolved over the past eight years with new and innovative advertising tools and techniques. The consumer is more informed and involved in their health-care decisions than ever before and, as a result, media consumption has changed. Also, the retail landscape has changed significantly with the consolidation of competitors within our class of trade and the expansion of competition outside of our class of trade."
Last week the company, which has 7,000 retail stores, reported $23.8 billion in net revenue for the first quarter of 2010, up slightly from $23.4 billion in the first quarter of 2009. CVS also saw revenue increases in both of its divisions -- pharmacy services and retail pharmacy segments -- for the first quarter. For the quarter, sales at stores open at least a year, in the retail pharmacy segment, increased 2.3% while same-store sales jumped 3.7% in the pharmacy division. The company is building off a very solid 2009 in which CVS saw total revenues increase to $98 billion from $87 billion in 2008.
CVS has also performed better than its peers throughout the recession but will soon face a more consolidated field of competition with Walgreen's $1.1 billion purchase of Duane Reade, expected to be completed at some point this year.
In 2009, CVS spent $142 million on measured media and, in 2008, it spent $143 million on measured media, according to Kantar Media. Its ad spending is actually higher with the advertising costs associated with its massive ExtraCare loyalty program, which the retailer said aren't included in Kantar's numbers. That program includes more than 50 million cardholders and includes a variety of targeted marketing efforts, such as promotional offers at the register and coupons via e-mail and direct mail.
The media reviews were handled by Pile & Co.
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Contributing: Rupal Parekh