International: J&J jolts 'Old' media with $250 million ad spend shift<br>As rivals talk, giant puts money where its mouth is -- Digital Formats
Staid Johnson & Johnson is proving to be marketing's Elvis Presley: While rivals talk up nontraditional marketing without changing measured-media spending habits much, J&J's adopting the King's refrain: "A little less conversation, a little more action."
The consumer-products giant's measured-media spending plunged more than $250 million in the U.S. last year to $1 billion, as measured by TNS Media Intelligence. That 22% reduction (not counting Pfizer brands acquired at year end) is remarkably close to the 20% of its marketing budget that experts had said J&J was looking to shift to nontraditional media last year.
A first glance at the figures indicates that cuts in direct-to-consumer advertising for J&J's prescription-drug and medical-device brands account for essentially all of the spending reduction. But a closer examination of the numbers also reveals that the New Jersey marketer has shifted quickly from its once-slavish reliance on traditional media, particularly TV. That's particularly surprising given J&J's reputation as a heavily decentralized organization.
Move into unmeasured media
Overall, J&J reported global ad spending fell around 10% to $1.9 billion last year, even as sales rose 6% to $53.2 billion. But J&J's measured-media spending in the U.S. fell more than twice that fast, suggesting a big chunk of its marketing budget went to unmeasured media, such as search and other direct marketing, rather than away.
Moreover, the company's move to sit out last year's upfront -- and its intent to do so again this year -- gives it more flexibility to shift around marketing funds given it isn't locked into expensive TV commitments.
J&J declined to comment on changes in its media spending for competitive reasons, a spokesman said. In contrast to rival Procter & Gamble Co., whose executives have talked at length about nontraditional marketing though the company's measured-spending habits haven't changed much, J&J has taken the Elvis tack.
J&J has shifted some marketing funds using a tactic once employed by P&G and Unilever -- a corporate tax on its businesses and brands to fund a centrally controlled innovation fund that brands can tap by using nontraditional media, said Rex Briggs, CEO of the consulting firm Marketing Evolution and co-author of the book "What Sticks," who has been an adviser to J&J.
"Johnson & Johnson has been one of the phenomenal companies at marketing R&D, and getting people to try new things, and go beyond the comfort zone of 30-second TV spots," Mr. Briggs said. "And that is translating into [budget] shifts. To me, it seems like a model for best practice."
The spending shifts in J&J's prescription-drug business aren't likely all about new media. Seven of J&J's prescription-drug and medical-device brands combined to slash media outlays by $274 million last year, accounting for virtually all the decline in J&J's measured spending. But many of the media cuts came on such brands as diabetes monitor OneTouch and anemia drug Procrit, whose users are easier to target online and through other direct approaches.
J&J drug brands increased their direct-mail and e-mail programs 31% last year, totaling 64, according to John Cummings & Partners/DBMscan, a database-marketing-tracking firm, though that was slower than the 77% increase in such initiatives the firm detected among direct-to-consumer drug marketers overall.
J&J's march away from traditional media also shows up in such brands as Neutrogena, Aveeno and the Johnson & Johnson baby and corporate brand, all of which cut measured-media spending last year despite growing sales, even as some brands, such as fast-growing sexual-health brand K-Y, hiked spending.
J&J also last year launched or boosted support behind specialty websites on such topics as arthritis, cancer, attention deficit disorder, pain and psychiatry last year. Its online spending rose 31% to $32.1 million, according to TNS, though that doesn't capture the heavy search advertising that normally drives most traffic to such sites.
For Remicade, a pricey Rx drug used to treat Crohn's disease, rheumatoid arthritis and psoriasis, J&J is using online marketing and public relations to drive people to local showings this month of "Innerstate," a feature film it produced about sufferers of the diseases who talk about being helped by drugs, though Remicade is never named.
J&J also is getting more use out of BabyCenter.com, a consumer website J&J fished out of the eToys bankruptcy in 2001. The site now reaches 500,000 to 700,000 people daily, based on Alexa.com data, well ahead of any single website operated by its package-goods rivals.
"Up until a few years ago, BabyCenter was really a stepchild of J&J," said Mr. Briggs. "People at BabyCenter had an easier time talking to people outside the company than inside. I think [J&J] really turned a corner the past couple of years, seeing the value of having a community dimension to brands."
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