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International: J&J to throw $3 billion global media business into review; push for fresh thinking could rock agency world

21-November-2006
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International: J&J to throw $3 billion global media business into review; push for fresh thinking could rock agency world

In a high-stakes pitch that could shake the standings of the largest media buyers and see one of the world's biggest ad spenders upend its marketing mix, Johnson & Johnson is preparing a global review of its $2.5 billion to $3 billion global media account.

Pfizer acquisitions

According to executives familiar with the plan, the pitch is slated for early next year, after J&J's anticipated closing on its acquisition of Pfizer's over-the-counter drug and personal-care business. The result could be to consolidate from three main media roster shops down to one. Incumbents include J&J shops Omnicom Group's OMD Worldwide and Interpublic Group of Cos.' Universal McCann as well as Aegis Group's Carat, which is incumbent on the incoming Pfizer brands.

J&J also works with Naked in the U.S. on communications planning, which it instituted this year, and in direct-TV buying with Interpublic's ID Media. WPP Group's Mediaedge:cia handles interactive media buying for the incoming Pfizer brands.

Declined comment

A J&J spokesman declined to comment on the possibility of any review but said the Pfizer deal is expected to close between Dec. 15 and Dec. 31. People close to the company said plans are to launch the review by the second quarter of next year at the latest.

While several creative shops have been girding to defend or expand their hold on J&J business after the acquisition closes, the company is focusing on the media assignment first, because media savings are part of what made the $16.6 billion acquisition attractive financially.

Making the numbers work

J&J hasn't been outspoken about squeezing media savings out of its acquisition, like rival Procter & Gamble Co. has about its purchase of Gillette last year. But media savings are also important in making the numbers work in a J&J/Pfizer deal that ranks only behind the industry record set by P&G/Gillette on multiples to sales and cash flow.

"They're looking to squeeze out every bit of savings they can," said one person familiar with the company. The media-agency decisions are important enough that senior J&J executives are likely to weigh in, this person said, including Colleen Goggins, worldwide chairman-consumer and personal care, and Christine Poon, worldwide chairman-medicine and nutritionals.

The review also gives a central marketing-services team that's already made headlines by pulling out of the network-TV upfront in the U.S. earlier this year a chance to make an even bigger imprint on media globally.

Perkins and Kadlec

Headed by Brian Perkins, corporate VP-corporate affairs, and Kim Kadlec, VP-worldwide media, the marketing-services group also has advocated greater use of nontraditional media and brought in media companies to help develop creative and marketing strategies -- including an "externship" program established by Ms. Kadlec.

The stakes will be particularly high for Universal McCann, an agency that's been struggling to right itself following years of client and talent flight. Its new CEO, Nick Brien, is said by insiders to have made headway stanching those losses and in stabilizing vital yet troublesome accounts such as Microsoft and Intel.

Source: Adage

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