The move represents a consolidation for Novartis, which had split media buying among four shops: Interpublic Group of Cos.' Initiative Media and Lowe; Havas Advertising-unit Euro RSCG's Media Planning Group; and MindShare. The Swiss company is the latest drug giant to seek to maximize clout and cost savings through a massive consolidation. Pfizer and GlaxoSmithKline also recently consolidated media buying accounts.
MindShare bested Omnicom's OMD and Bcom3's Starcom MediaVest, both New York, in the review. Novartis chose MindShare despite the fact it also handles Bristol-Myers Squibb, a competitor on some products, notably in diabetes treatment where Bristol Myers-Squibb has its Glucophage and Glucovance lines and Novartis has Starlix and a pipeline product.
But Novartis executives said MindShare executives, including CEO Irwin Gottlieb, promised to work aggressively to keep the businesses apart. "One of the demands that we put on the contract was very, very distinct firewalling and they have given us a very good plan on how they will separate everybody and make sure that nobody crosses lines," said Deborah Dick-Rath, Novartis' exec VP-global advertising. "Even as they go forward in their careers, they can't go from one business to the other business."
At Novartis, the decision was made jointly by a task force that included members from its multiple divisions, including CIBA Vision, animal health, consumer health and pharmaceuticals. But Novartis' major growth potential lies in pharmaceuticals and executives there likely held the most sway. "That's where we know our major growth as an overall company is going to come from," said Kurt Graves, senior VP-general manager of commercial operations.
Novartis has not been a major participant in the direct-to-consumer revolution that's changed the face of drug marketing. Its principal foray has been to promote Lamisil, a prescription treatment for toenail fungus that also has an over-the-counter counterpart that treats athlete's foot. But the company has a slew of potential blockbusters just on the market and in the pipeline.
Besides the Alzheimer drug Exelon, there's Gleevec, which may prove to be a powerful cancer drug-Novartis used it as the focus of a new corporate image effort from PR agency Ruder Finn, New York-and Elidel, a new drug for eczema. In the pipeline are a pain reliever known as Cox 189 and a drug that Novartis has had difficulty getting cleared by the FDA: the promising Zelnorm to treat irritable bowel syndrome.
It is the expected expansion into DTC that helped convince Novartis to proceed with the consolidation. "The reason we did this now is in preparation for some of the key new products coming out of our pipeline," Mr. Graves said.
The pharmaceutical division is expected to participate in the TV upfront market for the first time this spring. The consumer health division, which markets household names such as Maalox, Ex-Lax, Triaminic and Ovaltine, has bought TV time upfront in the past.
The win is a coup for WPP since in the review MindShare sibling CommonHealth claimed Novartis' media duties for professional communications, a move that melds consumer and physican marketing. "It's not just driving people into a store, but it's the integration of all communication channels: the Internet, direct mail, the messages that are going to the physicians," Ms. Dick-Rath said. "It all has to be integrated very carefully."