GSK Consolidates $1.3B Media Account with Omnicom and WPP
GlaxoSmithKline, the pharma and consumer-health giant, has consolidated the bulk of its global media buying and planning account with WPP media agency network GroupM, while keeping Omnicom's PHD as its lead media agency for the United States.
PHD will also add a global comms planning assignment, as well as the media business in Canada to its remit, according to people familiar with the matter.
Agency representatives either declined to comment or couldn't be immediately reached. But the decision, which comes after a lengthy review, means that the international media duties that GSK awarded to Publicis Groupe's Starcom MediaVest Group in 2010 will move back to GroupM.
It hasn't been that long since GSK examined its global media agency relationships. The last time it did so, in 2010, the outcome was not as favorable to WPP. WPP-owned Mediacom -- one of four GroupM agencies and, at the time, the incumbent on the GSK business in a number of top markets -- lost business.The shop retained its $90 million U.K. media planning and buying account, but months later GSK moved its massive U.S. business to Omnicom's PHD. And after a separate review in Europe, the company moved business in a handful of European markets to SMG.
Now, the marketer is cutting out Publicis Groupe and Carat, which worked in some global markets. It's streamlined its relationshios to consolidate the bulk of its media business with the two ad holding companies. GSK will also retain Dentsu, but just in Japan.
"The decision to consolidate our media investment with two network partners – GroupM and OMG, with Dentsu buying in Japan, is based on various factors including simplicity and speedier deployment of best practices," said Sam Singh, VP-global media at GSK in a statement. "We believe this sets us up with a fit for purpose media system into the future. We continue to hold the outgoing agencies, Starcom and Carat, in the highest of regard. They have consistently exhibited high levels of professionalism and we wish them all the very best."
New Media Exec from P&G
The move to review the global business this year came five months after Mr. Singh joined GSK as VP and head of global media with a remit to develop a new approach to media for the global consumer healthcare and pharmaceutical giant. Mr. Singh joined from Procter & Gamble, where he was VP of media in Asia and China.
A media agency consolidation will likely create efficiencies and savings for a marketer that has reported declining advertising spending since 2010. The company spent $1.3 billion in 2012, $1.46 billion in 2011 and $1.5 billion in 2010. In 2012, it spent $726 million on total advertising in the U.S., according to the Ad Age DataCenter.
The company spent $435.4 million on domestic measured media in 2012, according to Kantar Media. Globally, it spent $1.59 billion on measured media in 2011, the last year of available global spending data in the Ad Age DataCenter.
Various WPP media shops will chip in on the work going forward. GSK is one of WPP's many multinational accounts that utilizes its team model; it has done creative work for the pharma giant too in the past, including work on a global branding brief.
Although pharmaceuticals accounted for 81% of worldwide revenue in 2012, consumer health brands and prescription brands like Advair were the big marketing spenders. GSK's top U.S. spenders include Advair ($110 million), Sensodyne ($77 million), Breathe Right ($30 million), Aquafresh ($23.2 million), Abreva ($22.8 million) and Nicorette ($22.7 million), according to the Ad Age DataCenter. GSK also owns Tums, Biotene, Lovaza, nicoderm, Jalyn, Poligrip and Polident, among others.