|Photo: Doug Goodman|
Brian Perkins, VP-corporate affairs, Johnson & Johnson
More info:The Johnson & Johnson brand family
From Neutrogena to Sudafed
The writers strike has made J&J's decision to skip last year's TV upfront selling period much more costly this year. A $16.6 billion acquisition has brought with it a Pfizer culture that hasn't embraced change as readily as already-conservative incumbent management. Add in a big restructuring and as many as 4,500 job losses amid the impending patent expirations of big pieces of J&J's prescription-drug and medical-device business, and it's just the sort of environment that sends many revolutionaries scurrying back to basics -- i.e., the security of tried-if-tired approaches.
It's up to the relatively small crew in the central marketing group piloting the $61 billion behemoth and its $1.3 billion U.S. media outlay to prove it can keep the reform movement aloft amid growing turbulence -- and doubts.
'Back to basics?'
Not often does a company trying to make substantial marketing changes face the host of challenges J&J does, said Rex Briggs, co-author of the book "What Sticks," and CEO of Marketing Evolution. "J&J has some of the smartest people I know in marketing, and I'm hoping they'll continue to be a beacon for others," he said. "But I'm worried that with all the things going on, how much can they continue to dedicate toward innovating and how much do they retrench back toward basics?"
Mr. Perkins, corporate VP-corporate affairs, isn't entertaining such doubts. "We're really happy with the progress we're making, and we're going to continue to forge ahead with innovative programs and raising the bar on creativity -- full speed ahead."
He points to a long list of accomplishments in the past year or so, including a global media review, a new communications-planning system and global sponsorship of the 2008 Summer Olympics in Beijing.
But the writers strike has raised the price of one of J&J's key marketing shifts: VP-Global Media Kim Kadlec's move to sit out the TV upfront. The strike has dried up available ratings points and driven up scatter prices. Companies such as Unilever that mulled a pullback but ultimately participated in the upfront can get make-goods that J&J doesn't get.
That, in turn, could make it harder to deliver on savings hoped for from J&J's U.S. media-buying consolidation last year. According to people familiar with the company, it could also rankle executives who came in from Pfizer, where nearly 90% of budgets went into TV. Should brands fail to meet sales plans, the media strategy could become an easy scapegoat.
The incoming Pfizer executives already have shown an aversion to some of the new approaches J&J has been trying. At least two nontraditional campaigns that had been greenlighted by J&J executives got deep-sixed by Pfizer managers last year, according to people familiar with the company.
"Even with perfect 20-20 hindsight," Mr. Perkins said, J&J would have sat out the upfront and will again. "For reasons I can't get into, we're really pleased with how this is playing out," he said. "We have worked closely with the networks. And we really feel that we're delivering the best kinds of opportunities for our brands by coinciding with our planning schedule, not somebody else's."
A J&J spokesman said, "We're delighted with how well the whole Pfizer consumer integration is going, and we're as pleased with the people as we are with the products."
But even some of the seeming successes of J&J's modernization efforts have faced some doubts.
One of the bolder moves pushed by J&J's central marketing group, in this case VP-Global Advertising and Marketing Joe McCarthy, was naming independent Mother, New York, to J&J's roster to handle newly acquired oral-care brand Rembrandt.
Mother got conservative J&J to go along with some offbeat approaches, including a retro packaging overhaul, a pop-up store in SoHo and a YouTube video featuring a passionate kiss that's drawn more than 200,000 views, many of them from behind the site's "adults-only" curtain.
Rembrandt also got more measured-media support than ever -- $22 million through the third quarter of 2007 compared with only $10.5 million for all of 2006.
The effort won Mother internal awards from J&J and the bigger-spending K-Y "sexual health" brand account last summer.
What it didn't win was many consumers. Rembrandt's whitening-product sales plunged 32% last year to $21.7 million, according to Information Resources Inc.
Meanwhile, Listerine has fared far better with the more-conventional launch of its self-dissolving whitening strips from the more-conventional agency brought into the J&J fold via the deal, WPP Group's JWT, New York.
The Listerine strips, launched in March, racked up $19.1 million in sales last year and surpassed Rembrandt in its core category in the fourth quarter. While Listerine picked up a 7.9% share for 2007 in whitening, Rembrandt gave back 5.7 of those points.
J&J reported last week that the double-digit sales growth delivered by Listerine was offset by declines in Rembrandt and Reach toothbrushes. So essentially, the biggest jewel in the Pfizer deal saw its gains mostly wiped out by Rembrandt.
J&J declined to comment on Rembrandt, but Mr. Perkins said: "We really think we've moved the needle on innovation and creativity, and we're not going to stop. ... The world is changing, and we need to change with it."