Johnson & Johnson

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Johnson & Johnson was incorporated in New Brunswick, N.J., on Oct. 28, 1887; Robert Wood Johnson owned 40% and his brothers, James Wood Johnson and Edward Mead Johnson, each held 30%. Edward left J&J to found what would become Mead Johnson & Co. in 1897. Robert died in 1910 and was succeeded as J&J president by James.

In 1932, Robert's son, also named Robert Wood Johnson, took over the company. Because he distrusted ad agencies, Robert Wood Johnson Jr. initially turned to an acquaintance in the business, J. Walter Thompson, to advertise J&J's product lines.

In the late 1940s, agency Young & Rubicam's ads for J&J's Modess featured designs by some of the most famous couturiers of the time, including Christian Dior and Balenciaga. Well-known photographers shot glamorous cover girls such as Susie Parker and Dorian Leigh in exotic settings. The tagline—"Modess . . . because"—carefully avoided using the words "sanitary napkin" because J&J research indicated reading the term made women skittish.

Rising sales

Following World War II, J&J's sales climbed steadily, and by 1957, J&J was the No. 44 national advertiser, with annual ad expenditures of nearly $17 million, of which $8.6 was in measured media. The largest chunk, $3.8 million, was in magazines, while network TV accounted for $2.6 million.

By 1962, J&J was spending $21 million on advertising, including $1.7 million on newspapers, $2.5 million on magazines and $5.7 million on network TV.

That year, with Y&R handling the account, J&J's Micrin oral antiseptics wrested about 15% of the market share from rival Warner-Lambert's Listerine. J&J spent $15 million on advertising and promotions; it failed to make a dime in profit off Micrin.

In 1963, the year Mr. Johnson retired, J&J realigned its agency roster. Y&R lost $3 million in billings, though it remained J&J's primary agency—with $8 million in billings—and continued as agency of record for all network TV advertising. Sullivan, Stauffer, Colwell & Bayles picked up about $4 million in billings, of which Micrin accounted for about 74%; N.W. Ayer & Son, which had about $750,000 in J&J billings, was dropped altogether; and Norman, Craig & Kummel was assigned a new test product, the antacid Bi-Phase.

By 1975, the company was spending $55.5 million on advertising, $24.8 million of that in network TV. The almost $4 million spent to advertise diapers was nearly double the previous year's total; the ads, from SSC&B, featured actress Juliet Mills. Much of J&J's 1975 advertising sought to persuade consumers to view "baby" products—baby lotion, powder and oil—as "all-family" products.

The following year, J&J spent $8 million on the introduction of its o.b. tampons, via Cadwell/Compton. TV spots for o.b. featured a young woman who said she grew up on "lots of love and Johnson & Johnson."

The mid-1970s saw a pitched battle between Tylenol, marketed by J&J's McNeil Laboratories division, and Bristol-Myers's Datril, which went head to head using comparative ads. Starting in March 1976, Datril ads from Ted Bates & Co. claimed that it delivered more and faster pain relief than Tylenol. J&J complained to the three TV networks and the National Advertising Division of the Council of Better Business Bureaus, charging that the ads were not truthful.

Tainted Tylenol

In 1982, J&J faced a marketer's nightmare. Bottles of Tylenol capsules in Chicago were found to have been laced with cyanide, and seven people died. Although the Federal Bureau of Investigation declared it a terrorist incident, the tragedy looked grim for Tylenol as well.

Led by Chairman-CEO James Burke, who took over the reins of the company in 1976, J&J began a public relations blitz. Mr. Burke launched himself into a series of interviews and TV spots to explain what J&J was doing to control the situation. The marketer immediately removed Tylenol from store shelves. It bought page newspaper ads that explained the chain of events and offered to exchange consumers' Tylenol capsules for unaffected Tylenol tablets. J&J also offered a $100,000 reward for information identifying the perpetrator.

Overall, the company spent $100 million on the incident, but just three months after the first incident, Tylenol sales had returned to 80% of pre-crisis levels. (In 1989, Ralph Larsen succeeded Mr. Burke.)

In 1995, Johnson & Johnson-Merck Consumer Pharmaceuticals Co. launched via Compton Partners, New York, Pepcid AC, the first in a new class of over-the-counter treatments for heartburn. SmithKline Beecham, the marketer of rival Tagamet HB, sued J&J, claiming its Pepcid advertising was misleading.

J&J filed a countersuit, but the court ordered the withdrawal of nine of 11 Pepcid commercials. J&J also was ordered to halt its claims that "eight of 10 doctors and pharmacists would recommend Pepcid AC more often than Tagamet HB," pending further scientific study.

At the same time, competition in the over-the-counter painkiller segment was heating up. J&J went on the offensive in 1995, engaging in very public mudslinging with American Home Products' Advil brand. J&J ads questioned the safety of ibuprofen, the key ingredient in Advil. AHP responded with ads pointing out the alcohol-interaction warning on Tylenol labels and suggesting that Advil was perhaps a safer product. By 1996, J&J was spending $212 million through Saatchi & Saatchi's Healthcare Connection on its Tylenol account.

The advertising wars moved to national newspapers after all four major TV networks removed certain Advil and Tylenol ads, citing worries about consumer confusion. Tylenol ads appeared in 50 major publications, with a toll-free telephone number for consumers with questions. Advil's campaign featured a page ad in The New York Times describing a case of liver failure in a Tylenol user.

While Tylenol may not be J&J's biggest-selling product, it certainly is its most visible, considered a brand name equal to that of Coke and McDonald’s. The Tylenol product was still the market leader in analgesics, yet sales were down when, in fall 2003, J&J made a change.

After spending the entire life span of Tylenol as an over-the-counter medication with Publicis Groupe's Saatchi & Saatchi, J&J's McNeil Consumer and Speciality Pharmaceuticals division picked Interpublic Group of Cos.' Deutsch to work on the $100 million account after an extensive review. Changing agencies was one thing; changing mind-sets about using marketing tactics beyond paid advertising to reach consumer touch points was the bigger challenge.

Tylenol sales were down 10.5% in 2003 compared with 2002, according to Information Resources Inc., while sales of Wyeth's No.2 brand Advil were up 1.9%. That closed the gap between the two competitors to a 1.4% difference in market share. In early 2004, three months after the agency change, McNeil reported a 23% growth in OTC pharmaceutical sales in the 2003 fourth quarter compared to 2002, although it was not clear how much of that gain came from Tylenol.

In 2003, the company was the No. 8 U.S. advertiser, with total ad spending of $1.99 billion, up 10.9% from 2002, according to Advertising Age. TV accounted for the bulk of its measured media spending at $881.8 million, followed by consumer magazines at $328.1 million.

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