Was it the 1996 deal with Warner-Lambert Co. to co-market the cholesterol-lowering drug Lipitor, a promising, yet hardly surefire success?
What about Nov. 4, 1999, one of the most extraordinary days in business history? On that day, Warner-Lambert and American Home Products Corp. executives were talking about their planned $72 billion merger, and Pfizer stunned everyone by launching an $80 billion hostile takeover bid for Warner-Lambert.
Or before that, the day in mid-May 1998 when Bob Dole was prepping for a session on CNN's Larry King Live and told Mr. King in the green room that he had participated in a clinical trial for Viagra? Mr. King asked: "You want to talk about it on the air?" The
|Pat Kelly, Senior VP Worldwide Marketing
Respected marketing power
Any one of these events could be pinned as the launching point. Collectively, they've molded a respected marketing power with 2000 revenue of about $30 billion and a market capitalization of $272 billion.
Pfizer's recent success is built on a portfolio of alchemistic drugs such as Viagra with roots in research and development. But the Pfizer story also is about people: determined, 'keep the light on until after the competition goes to bed' employees from top executives to a sales force large enough to run a small country; a culture where suits who prefer walking are open to the ideas of agency types in black turtlenecks who ride around on Razor scooters; and at least some help from Mr. Dole and Jay Leno, too.
Pfizer's well-oiled machine has multiple drivers. They include Pat Kelly, the strategist and motivator who's senior vice president of worldwide marketing; the smart and charismatic Donny Deutsch, whose
It is for products (from Aricept to Zyrtec) and people that Pfizer is Advertising Age's 2001 Marketer of the Year.
Loosened restriction boon for DTC ads
In promoting Viagra's distinctive diamond-shape blue pill and a medicine-chestful of other treatments, Pfizer has benefited from the U.S. Food & Drug Administration's 1997 decision to loosen restrictions on consumer advertising of prescription medications. Pfizer, with its huge coffers, has capitalized by spending liberally and continues to boost its direct-to-consumer ad spending year over year.
Pfizer executives also have demonstrated an uncanny knack for something people have struggled at for years, the process of seeking beshertes -- the Yiddish word for perfect significant others. When Pfizer's radar picks up a potential blockbuster product in a competitor's pipeline, it doggedly pursues a marriage. Five years ago, few paid much attention as Pfizer signed the deal with Warner-Lambert to co-promote Lipitor, an addition to the crowded cholesterol-lowering segment known as statins. This year, Lipitor became the best-selling drug in the world.
In 1998, realizing that so-called Cox-2 inhibitors were about to
|See Nascar driver Mark Martin's Viagra TV spot.
The Celebrex deal, now with Pharmacia Corp. after it merged with Monsanto in 2000, gives Pfizer co-marketing duties and half the profits from the newest Cox-2, Bextra, approved by the FDA ahead of schedule last month. The drug is touted as more effective than Celebrex. Again, the FDA has given the Pfizer-Pharmacia partnership a leg up on Merck, whose next-generation Cox-2 Arcoxia is still waiting its imprimatur.
Luck and timing
"Luck and -- maybe better -- timing play a role in all business," says Mr. Kelly, Pfizer's earnest and passionate marketing chief. "But I'm a firm believer that you can create your luck and your timing by virtue
And certainly advertising. Over the first six months of 2001, Pfizer passed Merck to become the second-largest DTC spender, compared with the same period a year ago, with about $176 million, according to Taylor Nelson Sofres' CMR. GlaxoSmithKline leads with some $239 million.
The 2000 takeover of Warner-Lambert was propelled by Pfizer's desire to gain control of full profits from Lipitor sales, but it also brought Pfizer a bounty of younger-targeted products from Bubblicious to pregnancy test e.p.t. and birth control pill Estrostep. The addition of Warner-Lambert's dollars makes the new Pfizer the ninth-largest advertiser in the U.S. across all product categories, according to Nielsen Monitor-Plus, with some $624 million in spending for January-September 2001.
As soon as the government ink on the merger clearance was dry, the new Pfizer officially began the process of consolidating at one agency its media buying for all those dollars. All planning duties also were up for grabs. In an example of the types of clashes that the wave of megamergers can lead to, Warner-Lambert executives stood firmly behind their longtime agency, which had morphed into WPP Group's MindShare, New York, while old Pfizer executives were just as tied to their shop, Aegis Group's Carat USA. The review seemed interminable.
Pfizer executives prefer to downplay any tug of war and speak haltingly on the topic. "I think we all feel we made a right choice and we haven't looked back,'' says Paul Sturman, a Warner-Lambert veteran who's now vice president of marketing for Pfizer Consumer Healthcare, a unit created mostly from the old Warner-Lambert.
In the end, late nights paid off for Carat, which grabbed the blue-chip account. The agency was likely the favorite all along since Pfizer bought Warner-Lambert and the pharmaceutical side of the company, where Carat had gained extensive experience, is the growth engine.
It doesn't appear that Pfizer ever seriously considered splitting the account. There was a belief that the wave of media mergers nixed that option and there was a need to maximize clout by pooling dollars to gain discounts and access to prime programming. Pharmaceutical companies had earned a front-row seat at the annual TV upfront buying bonanza each spring. The Pfizer consolidation sparked a wave of major health-care companies, from the merged GlaxoSmithKline to Novartis, looking to place their business at one locale.
"If you look at where the world of media is going, it's all about consolidation," says Donna Campanella, media director of the old and new Pfizer. "You have vendors consolidating, you have agencies consolidating and you have companies consolidating. When you look at the Viacom-CBS deal, AOL and Time Warner, Disney and ABC, they are big companies coming together, and it's almost impossible for a small advertiser to really be on equal footing."
Pfizer, which before its acquisition of Warner-Lambert mostly marketed pharmaceuticals to individuals ages 50 and up, can offer a Viacom a bucket of money and in one deal buy time for Bubblicious on Nickelodeon, e.p.t. on MTV and Lipitor on CBS' 60 Minutes.
"Now, they buy a bigger spectrum of demographics, which makes them a bigger force," says Joe Abruzzese, CBS president-ad sales.
On the creative side of the ad prescription, industry executives say Pfizer's willingness to take risks and break from the norm -- yet still ensure that the effectiveness of its messages is supported by sound research -- contribute to a strong product.
The most prominent example is Viagra. As Pfizer executives were pondering consumer ad strategy with Omnicom Group's Cline, Davis & Mann, New York, they were somewhat surprised that Mr. Dole -- World War II hero, senator and presidential candidate, with a politically prominent wife who also would pursue the presidency -- would be so open on Larry King Live about how Viagra helped him after prostate cancer surgery. "It's a great drug," Mr. Dole said in May 1998 just as Viagra was rolling out.
Executives waited some time, but later approached Mr. Dole about doing an awareness campaign for a condition that was then commonly known as impotence. In a move that changed the face of drug marketing, he agreed.
Later, print and TV ads ran with Mr. Dole speaking about a condition called erectile dysfunction, or ED, and urging people to consult physicians about the problem. Mr. Dole's forthrightness on such a touchy and stigmatized topic was remarkable, and three years later, people still strongly link the brand with him.
"Viagra changed pharmaceuticals as a business by virtue of the rapidity and degree to which it was absorbed into popular culture," says Mr. Kelly, a 21-year veteran of Pfizer who began as a temp in the market research department. "That was unheard of in the pharmaceutical business. It was unheard of for Jay Leno to be doing a commentary about it. That hadn't happened before and hasn't since until [Bayer's] Cipro." Not even Eli Lilly & Co.'s Prozac had the water-cooler buzz of Viagra.
But the Viagra hype was a double-edged sword. On the one hand, it brought loads of free publicity. But it could go too far. Particularly frustrating were boasts by the septuagenarian Hugh Hefner about what Viagra did for him. Mr. Kelly says other celebrity Viagra users have approached Pfizer about promoting the product, but Mr. Hefner, though a male icon to some, would never be considered.
"He speaks of it as a performance enhancer," Mr. Kelly says. "He speaks of his seven girlfriends and eating a bowl of Viagra. Viagra treats a medical condition, and that's not what he's talking about."
Still, even without Hef, Viagra's ads have become literally racier this year, an example of the company's willingness to be a DTC innovator. Recent TV work employs Nascar driver Mark Martin, whose Viagra-sponsored car is seen speeding around a track. At the end of the spot, Mr. Martin takes off his helmet and says: "Who'd you expect? Bob Dole?" A print ad also has a tongue-in-cheek tone. "What happens if you don't talk to your doctor about Viagra?" it asks. Answer: "Nothing."
The Nascar tie-in and the less somber tack are part of a broad post-Dole movement to ensure that Viagra isn't viewed solely as an older man's drug -- the target is now in the 40-plus range -- and to continue reaching people unwilling to seek treatment. "We'll never go to the point of poking fun or making light, but we have to make going to the doctor palatable," says Janice Lipsky, the third U.S. team leader on Viagra and the first woman.
Pfizer also uses grass-roots marketing and has made efforts to reach ethnic communities with its Viagra messages. In September, it sponsored the tour of Earth, Wind & Fire. Pfizer launched a Spanish-language TV campaign from agency Creative on Demand, Miami, with new creative concepts from English-language advertising. The tour sponsorship and distinct Spanish-language TV creative are believed to be DTC marketing firsts.
"DTC is not just advertising for us," says Dorothy Wetzel, senior director of Pfizer's Consumer Marketing Group. "We use a number of other consumer marketing techniques. ... It's important to get all the parts to work together well."
Despite sticking with health care-focused Cline, Davis & Mann on Viagra, Pfizer under Mr. Kelly has shown an eagerness to gradually cast a wider net across Madison Avenue. Its roster now stretches beyond Pfizer's longtime agencies for reaching health-care professionals -- Cline and Lyons Lavey Nickel Swift, New York, another Omnicom agency -- into the reputed creative-focused shops. That movement began in summer 1999, as DTC ads began to flood prime-time TV, when Pfizer launched a surprising review for its Zyrtec allergy drug account even after the incumbent, a part of Lyons, won an industry award. The eventual winner was Interpublic Group of Cos.' Deutsch, New York, a distinctly downtown agency where staffers ride scooters in the halls.
"It was a recognition that DTC advertising wasn't competing against other DTC advertising but was competing against the best advertising in the world regardless of category, and Pfizer was among the first to really decide to go with pure consumer experts," says Anne Devereux, president-chief operating officer, Healthworks division of Omnicom's Merkley Newman Harty, which vied for the Zyrtec account.
Boon for Deutsch
The assignment brought together the flair of Donny Deutsch with the laser focus of Mr. Kelly. Later, Mr. Deutsch's shop would pick up Pfizer's account for Zoloft, an antidepressant. An animated TV campaign with a print component began this year, and Pfizer may be poised to boost sales as Prozac has gone off patent. Deutsch picked up another prized Pfizer account this year -- Bextra, the successor to Celebrex due in 2002. That review curiously saw the shift of Celebrex to WPP's J. Walter Thompson USA, New York.
Pfizer also continued to branch out by launching a review for Lipitor that landed the account at Merkley, a unit of Omnicom Group. Bcom3 Group's D'Arcy Masius Benton & Bowles also is on the roster with Relpax, a migraine drug expected to hit the market next year. Warner-Lambert's two longtime shops, JWT and Cordiant Communications Group's Bates USA, remain the principal agencies for Pfizer Consumer Healthcare, though some of the assignments have been shuffled. Both agencies lost millions of dollars in planning billings to the Carat consolidation.
Mr. Kelly concedes all the new assignments have ruffled some feathers at Cline and Lyons, but he offers the principle that nothing motivates siblings more than competition. "It's caused some angst, but it's also caused new energy where both have improved their ability to market to the consumer," Mr. Kelly says.
The general agencies across Madison Avenue salivate at the chance to pry the Viagra account from Cline, but Ms. Lipsky, the team leader, says it's staying put.
The hostile takeover
Another area where there has been some angst, as demonstrated by the tussle over the selection of a media shop, is in the merger of the old Warner-Lambert and the old Pfizer cultures.
The day of Nov. 4, 1999, won't soon be forgotten. The CEOs of Warner-Lambert and American Home Products were announcing the formation of American Warner when then-Pfizer CEO William Steere blasted a letter to Warner-Lambert CEO Lodewijk de Vink and launched the hostile takeover. Warner-Lambert and Mr. De Vink held their ground. Soon, lawsuits were flying. Then in January 2000, Warner-Lambert's board opted to accept Pfizer's higher offer. The merger became official that June.
New Pfizer executives say the melding has been rather smooth.
"It's amazing to me how well these two companies were brought together with everything that did go on," says Mr. Sturman.
Other industry executives who spoke on the condition they not be identified say there have been plenty of bumps as people were laid off or took buyouts.
"Warner-Lambert people have had to step up their level of intensity to become part of the Pfizer world," an executive says. "It's partly the difference between a New York and a New Jersey company. Pfizer's a very aggressive New York company, and people often ended up in New Jersey [Warner-Lambert was based in Morris Plains, N.J., and Pfizer Consumer Healthcare is still there] partly because of quality of life, and Pfizer doesn't have that reputation. While it's a nice company, it's a company that will work you hard."
In this post-Sept. 11 world, the future remains uncertain for Pfizer along with everyone else. But the company seems poised for a strong 2002. It's developing an uber-pill combining Lipitor and Norvasc, which treats high blood pressure, and is prepping to launch Relpax and Bextra. Both have strong potential, but will face stiff competition.
Possible trouble spots may come as Lipitor faces a challenge from AstraZeneca's potentially more effective Crestor, and Viagra encounters pill-form competition for the first time from Lilly with the touted Cialis and from Nuviva, co-marketed by GlaxoSmithKline and Bayer.
But analysts think Pfizer is still dealing with a strong hand as its shares trade near a 52-week high.
"If you're on Norvasc, you're going to keep taking it whether you're in a recession or not," says Marcel Brichon, analyst at Global Securi-ties Corp. "We've seen in the past six months as the market's fallen down around them, they've stayed pretty strong."