It's a new-business game, says Neil Foster, EVP of GCG Healthcare. “A lot of effort and resources go there because client and agency relationships are shorter. It's a revolving door these days. You don't hear ‘AOR' very often because everything is so brand-based. There is more opportunity, but the downside is there is less loyalty.”
It was a good year for new business for the Texas-based company, which launched its healthcare division in 2003. Revenues were up to $5.2 million (from $5 million in 2004). Foster expects a bigger growth spike this year, as last year's new business wins are having a greater billing impact this year.
Last year's highlights include helping Medicis launch Vanos, a class 1 steroid, and gaining organic growth from two additional brands: Restylane, an injectable wrinkle correction injectable product, which Foster says is “over $100 million brand,” and acne treatment Triaz. Misys Healthcare Systems, a provider of electronic medical records, appointed GCG as its AOR for its new software launch this year, and DPT Laboratories awarded the agency its corporate advertising.
Medicis' Loprox shampoo was the only loss (due to product management change). This year GCG picked up new business from the French-based animal health company Sogeval. It will help launch the company's US division. This will be the agency's first venture into this category, and Foster is excited about the experience.
GCG aims to diversify into additional specialties, such as primary care and cardiology. “We brought in Jake Yarbrough as a group director,” Foster says. “It was significant in bringing a lot of experience to diversify and be more aggressive with new business.”
Foster believes clients are looking for agencies that can do a number of things outside of advertising. “What clients want, whether they admit it or not, is an agency that works like a product manager,” he says. “It's more relationship-marketing-oriented, and it might involve the sales force or a number of different groups.”
The trend away from mass-media consumer advertising is actually good for GCG, which focuses more on specialty pharma geared toward physicians and healthcare providers. “It really helps because it increases those dollars dedicated to specialty,” Foster says.
But Foster believes this shift has also made it more of a challenge to gain market share. “It's difficult with so many players trying to launch competing drugs,” he says. “It's slicing and dicing market share. DTC helped grow those markets, and with less DTC those markets don't grow as much, so it becomes more competitive.”
Currently with 27 employees, GCG is one of the only healthcare agencies in the south, and hiring is a challenge. “For senior-type employees, we have to recruit out of other markets,” Foster says. “Entry-level employees learn by working here. More important than experience is finding the right type of person that fits in the environment.”
Foster is focused on “manageable steps” as the agency grows. “[We want to be] selective on new business, companies and brands that we assume and not try to grow too fast,” he says. “The worst thing is adding too much business too quickly and not managing that business. Working strategically and not in a reactionary mode is a challenge. Every year I forecast sales, and we meet it, but [business may not] come from the areas I project. You don't know exactly what opportunities you're going to get. It's hard to plan.”