"There's a continuing escalation of the upfront buys," said Bob Girondi, senior director-agency network relations and media planning at AstraZeneca, who in a memo to its media agency, Publicis Groupe's Zenith, asked the shop to review the increasing cost of media buys. "There are so many people out there who are willing to buy that nobody is challenging the system. Well, let's challenge the system."
AstraZeneca spent $257 million last year in total measured media according to TNS Media Intelligence/CMR, and has committed at least $50 million in total media this year to Crestor, its cholesterol-fighting drug. Pharmaceutical companies are one of the few industries that have increased ad spending during the recession
Pfizer, the biggest category spender with a $1 billion budget, has already directed its media agency, Aegis' Carat, to consider shifting more dollars elsewhere (AA, April 26). Other advertisers have said they could move anywhere from 5% to 10% of their network TV dollars to cable.
But yet another top 10 pharmaceutical spender, while frustrated with the upfront, seems to be taking a more measured approach. "Yes, we have contacted our agency and we have asked them to reallocate some of our budget elsewhere, including print and the Internet," said the marketing chief of the company, who asked not to be identified, but whose brands includes some of the country's most well-known prescription and over-the-counter medications. "It's not a lot. ... We're just looking for the best use of our budget. I don't think I'm the only one who would say that while prime-time TV is still important, it's not the end-all."
year of the alternative
The issue is a testy one, to be sure. "Clients are not going to take it anymore," said Mark Stewart, exec VP-chief strategy officer, Interpublic Group of Cos.' Universal McCann. "They are talking up a game and backing it up, versus last year when they paid these unjust prices. Their budget allocations will be more in line with where audiences really are, in broadband, online and cable. This will be the year of the alternative."
The sentiment was echoed by Bob Liodice, president of the Association of National Advertisers. "If what is happening in pharma is an indication of where the industry is moving, we've reached the tipping point." But Mr. Liodice was also an organizer of NUDG, which, he said after the group's breakup, "failed to reach a consensus that while [the upfront] is not a perfect process, the current process is generally acceptable."
Even AstraZeneca's Mr. Girondi wasn't ready to say whether the marketer will move some of its network TV money elsewhere. "There's a battle between the need to be there vs. the need to be more efficient."
contributing: claire atkinson, richard linnett