IPG agencies gun for Tylenol

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Interpublic Group of Cos. is hustling for more Johnson & Johnson business, designating its New York agencies Deutsch and Foote, Cone & Belding as the leadoff hitters for the $110 million Tylenol account.

The review comes as the analgesic market leader faces declining sales in a flat category and is challenged by prescription competitors that have increased their use of direct-to-consumer ads.

"One problem, however big or small it is, is that it's a brand that now has [DTC] alternatives," said one J&J executive who asked not to be identified.

The declines occurred despite beefed-up ad spending on the brand. For the first half of this year, measured media outlays jumped 40.9% to $77.7 million from $55.2 million, according to TNS Media Intelligence/CMR. In all of 2002, J&J spent $120 million for Tylenol.

An Interpublic spokesman declined to comment, but an executive close to the situation said "Johnson & Johnson is an important client for IPG. You'll see all the big guns out. This is one of the most well-known brands, not just for J&J but one of the most well-known brands period."

Interpublic already has a strong block of J&J business. McCann-Erickson Worldwide handles the Band-Aid and Accuvue contact lenses business, while media-buying arm Universal McCann has virtually all of J&J's brands; Lowe has the marketer's corporate branding; and Lowe spinoff Alchemy, New York, handles Imodium, the Motrin brands, J&J's McNeil Nutritionals business and Ortho-McNeil Pharmaceuticals.

J&J's McNeil Consumer & Specialty Pharmaceuticals unit, maker of Tylenol, stunningly last week put into review Tylenol, which has known just one agency of record, Publicis Groupe's Saatchi & Saatchi, since its debut in 1975. Saatchi, which is expected to defend the account, did not return a call for comment.

Other agencies believed to be wrestling over the business include Omnicom Group's TBWA/Chiat/Day and Havas' Euro RSCG Life, both New York. Up to three other undisclosed agencies are said to also have been contacted.

McNeil spokeswoman Kathy Fallon credited Saatchi with "building us to where we are today." Tylenol is the market leader in analgesics, but sales slid 4.1% to $567.9 million for the 52 weeks ended Aug. 10, according to Information Resources Inc. Right behind Tylenol are private-label brands, which had sales of $493.9 million, down 0.2%. The analgesic category was down 0.9% for the same time period.

difference of opinion

Ms. Fallon declined to comment further, but the J&J executive said the decision to put the account into review stemmed from a difference of opinion with Saatchi. "We saw the brand going one way, and Saatchi saw it going another way," the executive said. "That's all I can really say. I don't think anybody is at fault here other than, somehow, the brand has lost its way."

The executive did confirm that McNeil brought in a consultant several months ago to help formulate ideas for the product. In May, Saatchi launched a campaign for the brand's latest product, Tylenol 8 Hour, that was targeted at the physically active 18 to 34-year-olds. But, "that's not working," the executive said.

The decision to leave Saatchi comes almost 21 years to the day of the tampering tragedy that rocked Johnson & Johnson. In September of 1982, seven people in the Chicago area died as a result of taking Tylenol Extra-Strength capsules laced with cyanide.

Yet with the help of the agency, then known as Saatchi & Saatchi/Compton, J&J conducted a masterful, textbook example of crisis management in confronting the misfortune. The marketer immediately pulled all Tylenol products, sent 2 million pieces of literature to the medical community and revolutionized the industry in revamping its packaging to prevent future tampering.

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