How do CPG alliances aid pharmas?

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Teva's alliance with P&G should enable the drugmaker to get competitive rates on global media buys for its OTC products. Are there other opportunities for firms to gain media-buying scale by partnering with CPG advertisers?

Erica O'Neill, PhD
Vice president & group account director,
Knowledge Networks

 
Alliances like this can be game-changing, and media-buying efficiencies are just one of numerous benefits to be realized. The key to success for companies considering such ventures will be to identify partners who complete them – whether by providing complementary products or services, filling gaps in marketing or manufacturing expertise, or furthering reach into specific geographies. Since consumers are the ultimate denominator when it comes to media buying, it also makes sense for companies to consider partners who are after the same consumer targets, even if in tangential industries. But, perhaps the most important step prior to looking for an independent partner is to examine one's own organization: the right partner may be a sister company already under one's own umbrella.  


Adam Roberts
Vice president group director, media,
Digitas Health


To combat the end of the blockbuster era, manufacturers are looking to unique tactics to increase revenue. With any major acquisition, sale and/or partnership, companies will seek out new revenue share opportunities to strategically leverage and flex muscle and clout to gain share and scale. Through the combination of utilizing strengths of each partner in an alliance and sharing the best resources from each, companies can expect to increase profits by minimizing costs and driving profitability. This is all great for the companies involved and corporate profits but not every partnership is a match made in heaven. As long as each brand stays true to its purpose—serving their core audience—the opportunities could be endless.


Ken Shore
EVP business development & innovation,
Blue Chip Marketing Worldwide


The opportunity and primary benefit of a pharma company partnering with a CPG firm is not media buying scale but access to best-in-class consumer marketing processes and expertise. While it has changed considerably over the last decade, pharma marketing still remains very focused on the needs of healthcare providers. CPG companies begin everything they do with the consumer (or patient) in mind. Their entire company is designed around the target audience. Teva's recently announced alliance with P&G is very similar to the acquisition of P&G's pharma division by Warner Chilcott. In both instances, the companies were able to dramatically increase their marketing savvy and talent pools by engaging/partnering with the best trained and brightest consumer marketers in the business.


Ken Begasse, Jr.
Partner, COO,
Concentric Pharma Advertising


This partnership demonstrates Teva and P&G's desire to capture momentum and the future promise of “switch-over” pharma to OTC products. Without a doubt, this strategic alliance enhances media buys; but that is less significant when you consider this partnership increases each company's global reach, enriches their pipelines and creates massive manufacturing efficiencies. I'm sure the industry will keep a close eye on the success of this alliance, but I don't see a rush of companies jumping to the altar. Partnerships must make sense. They're delicate and must meet more than a simple cost-efficiency; they must support a greater strategic vision to drive top-line growth and a bolster a greater offering to their customers. Short-term gains are probable; however, the real opportunity exists within the long-term vision.
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