MERKLEY JOINS WITH OMNICOM SIBLING: CONSUMER HEALTHWORKS MERGER GIVES SHOP EDGE FOR DTC WORK

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Giving it an instant foothold in the increasingly lucrative direct-to-consumer pharmaceutical ad business, Merkley Newman Harty has agreed to merge with Consumer Healthworks.

Both New York-based shops are part of Omnicom Group's Diversified Agency Services operation. The merger is effective Jan. 1.

Consumer Healthworks, with billings of $38 million, handles Bristol-Myers Squibb Co.'s Glucophage. Merkley, with some $270 million in billings, has a roster that includes BellSouth Corp. and M&M/Mars.

Earlier this year, Merkley won the $125 million Mercedes-Benz USA account. Consumer Healthworks, which will split off from Harrison & Star Business Group to join Merkley, last month launched a much-talked-about DTC effort for Glaxo Wellcome's Wellbutrin SR (AA, Oct. 25).

Consumer Healthworks will most likely keep its name in some form and add a tag such as "a Merkley Newman Harty company."

The merger provides the shop access to Merkley's consumer marketing skills as DTC continues to lose some of its uniqueness.

AT CONSUMER SHOPS NOW

"We're in a world where DTC advertising isn't competing against other DTC advertising," said Anne Devereux, 37, president of Consumer Healthworks. "It's competing against Nike, McDonald's and Mercedes."

Increasingly, the bulk of the largest DTC accounts are handled by consumer-focused agencies such as Glaxo's Imitrex migraine drug at Grey Advertising, New York; and arthritis drug Celebrex, marketed jointly by Monsanto Co. and Pfizer, at Leo Burnett USA, Chicago.

Thoughts of a merger had percolated in conversations between Ms. Devereux and Parry Merkley, partner and president of Merkley, for some time.

"We know there is unlimited opportunity there. You can't ignore it, so we're trying to stay ahead," Mr. Merkley said.

Ms. Devereux said she considered combinations with other Omnicom agencies.

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