Will more pharmas consolidate?Merck has put its media business up for pitch as it seeks to consolidate following its acquisition of Schering-Plough. Can we expect to see more of this sort of consolidation at top pharmas in the next year?
President & CEO,
Shankman Marketing & Media Services
I expect to see more consolidation within pharmas of their media business, but with certain restrictions. Senior execs and procurement departments have the perception that savings will automatically be achieved if media is centralized within one company. However, if the expertise does not exist in the media agency/company, it will cost more dollars and lost scripts. Consolidation does not affect the negotiating leverage of a qualified media team. That is why this trend of consolidation is cyclical. What may become centralized this year (to expedite the merger) will be outsourced again at some time in the future. At some point after the merger is completed, the procurement departments and product management have the opportunity to evaluate whether consolidation is right for their products.
VP, director of channel marketing,
Merck is one of many pharmaceutical companies with larger media budgets that have consolidated planning and buying this year. Most of the top pharma companies have transferred all traditional planning and buying under one roof. Bayer recently moved all media planning and buying to Initiative, Pfizer has moved the Wyeth budgets to AOR Carat. Mergers and the co-marketing of brands will always allow for opportunities to consolidate. The next big consolidation will be merging the digital with traditional planning and buying, and then, eventually, public relations. Earned media is taking a bigger role as social media expands. As clients push for lower costs, integration and collaboration will be more important than ever.
EVP strategic insights,
Three drivers will continue to fuel the consolidation of the media business: the increase in mergers and acquisitions that drives the need to achieve economies of scale; the number of companies that are outgrowing the capabilities of their agencies' media departments; and the metamorphosis of biotechs into vertically oriented pharma marketing companies. All of these will compel pharma marketers to continue to turn to the cost- and results-effective media-neutral strategic planning and execution of a full-range of media opportunities. This expertise can be sought only from within the overall and diverse capabilities of networks, or the halls of the media planning companies. The search for media optimization through consolidation is expected to continue.
SVP media strategy,
The media consolidation trend under way is a direct result of large pharma consolidation. Beyond Merck, Pfizer just moved the Wyeth pharma business and Abbott just consolidated at Mindshare. We are witnessing a natural flow of business efficiencies. Recognizing there can be value to corporations by placing all business at one agency/network is not unusual. What is interesting is that pharma is recognizing the value of the media marketplace to drive strategic value for the company. I applaud the decision to trust one partner. There are so many idiosyncrasies in both businesses that it makes sense to have an expert in both client culture and media planning/buying to find the best solutions.