In the latest sign that pharmaceutical companies may play their biggest role yet in the coming upfront TV buying season, GlaxoSmithKline has launched a review for its estimated $600 million consolidated media buying account.
The drug giant, formed in December by the merger of Glaxo Wellcome and SmithKline Beecham, limited the review to four New York-based roster agencies. Contenders include WPP Group's Media Edge, which has all buying for the former Glaxo except direct response; Interpublic Group of Cos.' Media Direct Partners, which now handles Glaxo direct response; Grey Global Group's MediaCom, which handles broadcast buying for the former SmithKline; and Havas Advertising's Media Planning. Havas' Jordan McGrath Case & Partners Euro RSCG now has print buying for the former SmithKline. Media planning is not included in the review.
The winner will handle buying for a fleet of prescription and over-the-counter brands, ranging from Aquafresh toothpaste to antidepressant Paxil.
One reason for placing an entire media budget at a single shop is to maximize leverage and achieve more discounts in the upfront and other marketplaces, including the TV spot and overall print arenas. GlaxoSmithKline spokeswoman Nancy Pekarek said the company hopes to have a decision in time for the upfront.
Pfizer also is in the midst of a review to select one shop for an estimated $700 million-plus account before the upfront. Pfizer will join its account with that of the former Warner-Lambert Co., which it now owns. That battle is down to two: Pfizer incumbent Aegis Group's Carat USA and Warner-Lambert's WPP-owned Mind-Share, both New York. The review has dragged on since mid-2000.
Network execs say they are expecting the bigger drug companies, soon to be fronted by media agencies with more power, to use their increased leverage to force lower TV prices.
But networks aren't sitting on their hands. Clients such as GlaxoSmithKline and Pfizer often consult network officials during a review, and execs may try and play a slight role in the process.
"We do a lot of homework," said Mike Nowacki, VP-news and late-night advertising for CBS. "In one particular case, the client asked us, 'This [agency] is making this claim - is that true?' This is so they don't get misled into a decision based on what someone has claimed, but is not deliverable."
Contributing: Wayne Friedman
Copyright February 2001, Crain Communications Inc.