Insiders confirm that Pfizer told executives at Carat that it believes broadcast CPMs-cost per thousand viewers-are too high and that the media agency should consider shifting more dollars to cable TV, print and other media options rather than agreeing to pay big increases to the networks.
Carat, part of Aegis, handles media buying for Pfizer's consumer products and pharmaceuticals.
The move by the maker of such brands as Lipitor and Viagra underscores a growing tension between marketers and broadcasters as the upfront approaches. This week brings the first meeting of the Association of National Advertisers' Network Upfront Discussion Group to discuss ways to change how the upfront is conducted.
Pfizer spokeswoman Michal Fishman said the pharmaceutical company is no different than any other marketer trying to scale back costs.
"We're in an ongoing dialogue with our agencies about our objectives in the upfront, and that is quality programming at the best rates with minimal inflation," Ms. Fishman said, adding, "We have had a strong partnership with Carat all along and continue to have a good partnership with them."
A person familiar with Pfizer said the drug maker told Carat that not all brands were right for prime-time network TV. Pfizer has long maintained it is looking to be more creative with its advertising, and that includes less reliance on network TV.
"With every client, our normal pre-upfront procedures and tactics include evaluating the marketplace and developing strategies to find the most creative and different scenarios to avoid media inflation," said Andrew Donchin, senior VP-director of national broadcasts for Carat.
Pfizer spent $979 million in measured media last year according to TNS Media Intelligence/CMR. That included $442 million on network TV, $245 million on print, $148 million on cable TV and $85 million on syndicated TV.
The company feels it can direct some of that network TV spend to cable, print and outdoor, and has begun to introduce more of those elements into its marketing mix. Two weeks ago Pfizer initiated The Value Card for Viagra, in which customers who enroll in the program will receive one free prescription for the erectile dysfunction drug after purchasing six. The campaign is largely print-based.
The changes come as advertisers move into an upfront market that is starting to look like a standoff, with media agencies and advertisers saying they will not pay double-digit increases and broadcasters such as CBS threatening to hold back inventory if they can't hike prices.
contributing: lisa sanders