Healthy Skepticism Library item: 13854

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Bush M.
Pfizer Launches Major Agency Review, Denies Consolidation
Advertising Age 2008 Jun 24
http://adage.com/agencynews/article?article_id=127964

Abstract:

Speculation Abounds Regarding Plans for $1.2 Billion in Marketing Expenses

Full text:

Citing a “very public transformation” in which it and the health-care industry is “looking to adapt the way we do our business,” pharmaceutical giant Pfizer, which spent some $1.2 billion in marketing last year, is undertaking a major agency review that will encompass creative, PR, digital and possibly even more disciplines.

Ray Kerins, VP-worldwide communications at Pfizer, stressed to Ad Age that this is not the first step of an agency consolidation process on Pfizer’s part — despite persistent talk in marketing circles that the drug titan is planning just that.

Seeking understanding
“The intent is not to consolidate,” Mr. Kerins said. “The intent is to understand our agency partners better. This is not a full blanket sweep of all the agencies.”

But to hear him explain it further, it certainly sounds like Pfizer is looking to trim some of the fat and whittle down the number of agencies it works with. “We were very clear with [Wall] Street and the health-care industry that we are looking to adapt the way we do our business,” he said. “So as we do that we are looking at every division from communications to finance, from manufacturing to marketing. [This review] is a very natural extension of that transformation. We are looking at every corner of the business to see how we can improve.”

He added: “While we’re very pleased with the partners we have, we’re going to take a look and make sure we have the right ones in place, and we’ll take it from there.” According to Advertising Age’s 100 Leading National Advertisers report, Pfizer was the country’s 28th-largest advertiser last year, spending $751.7 million on measured media and $501.2 million on unmeasured media.

While Mr. Kerins was not specific about its “transformation,” it’s clear that direct-to-consumer drug marketers are under keen pressure from critics and lawmakers who charge their ads cause consumers to demand unnecessary drugs from physicians. There has been discussion among lawmakers regarding a ban on new-drug ads for two years; just last week Pfizer, among other drugmakers, came out in support of a less-dire six-month ban.

Lipitor campaign flops
Moreover, Pfizer earlier this year pulled ads for Lipitor after it came to light that its spokesman, Dr. Robert Jarvik, did not actually take the drug until after he agreed to appear in the commercials, which purported to show him rowing but actually used a stunt double.

Many observers believe that as a result of the increased scrutiny, drugmakers like Pfizer are beginning to put greater emphasis on direct and internet marketing, more-targeted venues than print and TV.

Health care is “an industry that’s highly regulated and probably gets more daily editorial coverage than any other industry,” Mr. Kerins said. “So the ability for us to continuously improve ourselves is something that we are always looking to do. That goes for any industry but ours in particular.”

When asked if there was a chance Pfizer would end its relationship with some agency partners as a result of the review, Mr. Kerins said that was “total speculation.” But a number of people in the industry, including some of the company’s agency partners, believe Pfizer is looking to consolidate agencies as a way to streamline and cut costs any way it can.

Executives close to the situation said the review is being led by procurement, but Mr. Kerins would neither confirm nor deny that. “It’s being run by the appropriate people inside Pfizer, and the appropriate people are at the table to make the decision,” he said. “I won’t say any one group is leading the charge, but it is being run by those who have the best knowledge to make the right decision on behalf of the company, and that’s the way it should be.”

Mr. Kerins said the review started with the issuance of request for information to the company’s creative agencies of record. He would not disclose which agencies received the request. Some of its agency partners on the advertising side include McCann Erickson and Kaplan Thaler Group (the latter was behind the Jarvik ads).

Digital, PR agencies may receive RFIs
“We do anticipate that we will be sending RFIs to other professional consumer agencies as well, including digital and PR agencies,” Mr. Kerins said. “But we haven’t done that at this moment. Right now we have only sent RFIs to creative firms.”

Edelman and Hill & Knowlton handle portions of Pfizer’s PR business. Digitas does parts of its digital work and Unit 7 manages pieces of its relationship marketing.

Someone with knowledge of the RFI said agencies were asked to provide very general information including agency size, number of employees and capabilities relating to a variety of disease categories.

Mr. Kerins said there hasn’t been any discussion about issuing RFIs to agencies Pfizer doesn’t currently have a relationship with. “But as you can imagine, we are always looking for the best and the brightest,” he added.