The Top 75: CommonHealth
After a grueling four months involving “multiple rounds of live presentations, document submissions and teleconferences” with Johnson & Johnson for its US-based pharmaceutical business, WPP, parent to CommonHealth, walked away with the bulk of the assignments “in terms of how big they are to J&J,” says Giegerich.
Interpublic Group, the other big winner in J&J's agency consolidation, scored the pain and women's health franchises, as well as GI and HIV brands.
As WPP's largest agency supplier to J&J prior to the review, and “probably J&J's single-largest agency supplier” in general, CommonHealth had a chance to gain ground through expansion into new brands and disciplines, but it also had a whole lot to lose. Giegerich says CommonHealth's extensive knowledge of J&J's brands, franchises, personalities and culture led to an enormous role in the pitch process, which in turn helped secure the agency's position as a top provider for J&J. Franchises won or retained by WPP include CNS, oncology and anti-infectives brands.
As a result of the win, WPP created Chemistry, a free-standing superstructure with a management team responsible for orchestrating the resources of WPP—including “a whole bunch of system, process, finance and human resource detail”—for J&J's business, reporting directly back to parent WPP.
Giegerich says J&J's decision to consolidate its agency mix is indicative of changes in the way agencies do business with their clients.
“They went at the consolidation process with an eye toward reinventing their marketing and communication process and strategy, and even the administration of all that work within their own walls,” says Giegerich. “They saw the lunacy of having a single brand being serviced by 25 different agencies, not only in the way the work winds up in the marketplace, but also in terms of efficiency, and the extra cost and process and bureaucracy that is built around that.”
CommonHealth has taken that kind of thinking to heart, moving all of its US-based business units into its Parsippany, NJ, campus. Giegerich puts the total number of staff on campus at around 600. In the last couple of years, CommonHealth has consolidated its professional-side operations, most recently merging Noesis—formerly based in Morristown, NJ— into the Ferguson unit last December. Ferguson now employs around 130 people.
“We had five different professional agencies scattered in different places,” says Giegerich. “One of the changes we've been making over the years is to look at getting critical mass…and we've consolidated [professional agencies] from five to three: Ferguson, Carbon and Altum. All three have a lot of people, a lot of clients, and it makes us a lot more efficient and effective.”
Ferguson and Altum both added lead creatives, with Peter Zamiska joining Ferguson from The CementWorks in 2008, as EVP, chief creative officer, and Donald Martiny, formerly chief creative at Dorland, joining Altum as EVP, chief creative officer in 2009.
David Chapman, a managing partner of CommonHealth overseeing the professional agencies, notes that staple J&J brands such as Procrit and Levaquin remain on the roster, as well as new additions such as Xarelto, an anti-coagulant, and two other brands —a CNS brand and a cardiovascular brand—which are totally new to the agency. Professional groups at CommonHealth have been steadily ratcheting up their technological capabilities, according to Chapman. One of CommonHealth's divisions was the first professional agency to develop an iPhone application, and staff is certified with Tablet PC and mobile marketing services such as ProScape and Exploria, says Chapman. New text messaging capabilities enable doctors to request articles, and receive symposium and restaurant listings at conventions, says Chapman, adding that “no significant losses” were recorded on the professional side this year, despite unit consolidations.
In the managed markets area, CommonHealth rolled out a new agency in February—Valos—to help accommodate growth at Solara, also a managed markets shop. “The best way for us to accommodate the growth potential was to set up a different operating company,” says Giegerich. “It allows us to bring in new talent at the senior level and let them focus on growing and managing a more concentrated piece of business. It also lets us handle conflicts in the same therapeutic categories.” Joanne Way joined Solara in March, as SVP, managing director. Collapsing professional agencies while expanding managed markets is just a sign of the times, says Giegerich.
Stacey Singer, a managing partner at CommonHealth tasked with overseeing the med ed and managed care business units, says one of the reasons for launching Valos, besides managing conflicts, is that Valos is more specialized in biopharma and biotech reimbursement, noting that the level of expertise needed in the managed markets arena is huge. “The old sales and marketing model was based around individual payers, and weren't as sophisticated,” says Singer. “Finally, industry has awakened to going through payers” and aligning itself with payer segmentation models as they pertain to Medicare and state Medicaid, which are the “most important avenues to the brand or brands,” says Singer. According to Shaun Urban, president at Solara, many marketers are approaching payers with individual brands, when they should be thinking about how to leverage an entire portfolio through quality improvement and value-added programs. Urban describes a branding initiative performed for a client, where Solara did marketing research to uncover attitudes and beliefs about the portfolio of products, and then built a managed markets identity for the corresponding division of the company.
“Based on payers' opinions, we built campaigns that communicated 13 products…it allowed us to leverage assets that were more diversified,” says Urban.
On the medical education side, Mary Anderson was promoted to president of HLS, CommonHealth's med ed shop. Medical education has been a challenging area, with pending legislation at the federal level, as well as associations and states enacting tougher guidelines over the last year. “The top-down model is no longer viable,” says Singer. “We've become less focused on academic physicians, and have developed a more network-based and engaging method of reaching opinion leaders,” she says, noting that marketing research has proven that opinion leaders can be members of the community. “We're pairing small groups of more traditional opinion leaders with a panel of practicing community physicians, and together they are developing tools to address work-related problems,” says Singer. The kind of bidirectional feedback created by these groups is immensely valuable, she says.
In addition to the managed markets area of CommonHealth, the second big growth area is in digital, specifically with Qi, the agency's “sharp tip of the spear, technologically,” says Giegerich. “We can't hire fast enough to accommodate the digital growth. It's not just that clients are asking for digital—we're directing clients toward more dynamic interactive tactics and programs…everything we do has a digital component, every single campaign.”
Boris Kushkuley, previously EVP, chief technology officer, was promoted to general manager of Qi last summer. “By the end of this year, we will probably have close to 100 people working solely on digital and interactive technology-based programs, and that doesn't even include all of the other content that's being fed into their workload from the rest of CommonHealth,” says Giegerich. Marc Weiner, a managing director overseeing CommonHealth's consumer and digital groups, says Qi is “on fire right now,” noting that leadership at the firm Qi has gelled.
The first quarter of 2009 found Qi growing mostly through organic expansion. For its Bayer Health accounts, which include birth control products Yaz and Mirena, the group increased its staff by 8%, says Weiner (bringing the total headcount to around 62), and added Ilya Gaysinskiy as chief technology officer. Yaz will be updated with new campaign materials during the third quarter, adds Weiner.
EvoLogue, CommonHealth's premier consumer shop, picked up Suboxone, a treatment for opioid dependency, with Reckitt Benckiser Pharmaceuticals, and is expanding its relationship with AstraZeneca, after working on Symbicort for the last two years. Weiner says EvoLogue has big expectations for a new COPD product currently in development, and notes that a Myriad Genetics account was resigned for budgetary reasons. “There is a lot of crossover from consumer and DTP to CRM and digital,” says Weiner. “Four years ago, maybe half of our clients were looking for digital solutions. Now 100% of our clients want consumer engagement [technologies].”
Weiner says CommonHealth has made a significant investment in its video and digital structure, adding a media lab in 2008 with production capabilities including animation and 3D models.
Weiner acknowledges certain challenges in the digital landscape, citing the recent 14 warning letters issued by DDMAC over sponsored links, but says creative should be balanced to engage a more-informed patient, while at the same time protecting the patient through risk profiles.
“Brands should present a balanced yet differentiated story, and that's how we're launching brands out of the gate,” says Weiner.
Conectics, CommonHealth's media planning and buying shop, has had to shift gears a bit over the last year, says Weiner. Traditional journal ads have declined by roughly 35%, says Weiner, although new media “probably equals 35%,” offsetting the drop in traditional insertions. Becky Frederick was promoted to general manager at Conectics last July, from SVP, media director.
Other key hires and promotions, according to Giegerich, include Joseph Mastracchio, EVP, director of business integration at CommonHealth; Chris Andrews, promoted to chief information officer; and Meaghan Onofrey, promoted to president of MBS/Vox, the agency's research-based consulting and communication strategies division.
In the global arena, Giegerich says CommonHealth has a joint venture with WPP that “lets us tap into the international offices of Ogilvy Healthworld, and really any other group within WPP.” CommonHealth has its own offices in Paris and London, and also recently formed a joint venture in Japan, says Giegerich. “We do global work that reaches well beyond these offices,” says Giegerich, adding that new technology has made the need to have a physical office in every country obsolete.
Giegerich says the continuing evolution of CommonHealth, to reflect a changing commercial model, is crucial in maintaining a viable relationship with clients. Speaking on an industry in transition, Giegerich says that everyone will have to come around eventually. “Some will push it from the procurement side, because they're looking to cut costs…and others will look at it as a marketing challenge and a way to become more competitive,” says Giegerich. “Pharmaceutical companies are thinking about marketing their brands as instead of a series of things that happen separately—medical education is separate from what the sales reps do and receive, that's separate from the consumer activity and that's separate from the digital work that's handled by a digital agency—most clients are rethinking that model, and we're encouraging them to think of it as a much more coordinated, in our words ‘echo system' of activities, that have to be really stitched together. Our emphasis is not only bringing new skills like managed markets and digital to the picture, but making sure those things are not just somehow separate from the rest of the work on the brand. We're focused on giving our clients a macro-level of service, not an a la carte wall, but a full, coordinated menu of activities.”
“This is an interesting time for us in the industry, and it's motivating to me and our management team, but it's also intimidating as hell to other people who are stuck doing the same things and not sure what to do next,” continues Giegerich. “Right now we feel like we're on the side of the angels – we're doing the right thing, and it's working, but we're still anxious about all of the changes yet to come.”