Though it’s a challenging environment, CEO Peter Labadie isn’t overly concerned. In fact, he’s optimistic. “The ad market reflects the overall status of the industry, which is challenged,” Labadie says. “The agency is steady, revenue is steady, but growth is hard to come by. We’re not complaining. Things go in cycles. Right now we’re in a challenging cycle. It will change again. I don’t feel bearish about the world in general. I think positive going forward.”
The agency diversified its client base last year, which helped it hold steady overall. “The challenge is to work within prescribed budgets, which are lower, and risk- taking is lower,” Labadie explains. “It’s kind of open season on healthcare companies as a whole. They’re under a lot of scrutiny and adversity based on the need to hold costs down. The goal is to do the best you can in terms of growth even if it’s less than in years’ past.”
Working with somewhat smaller, emerging growth companies has provided opportunity for more integrated work across a range of programs. And the digital/interactive practice has really flourished, accounting for more than one-fourth of overall business last year. Led by VP of interactive Jeff Pazen, the practice group represented the strongest area of growth for the agency, and it produced outstanding work, including an online game QuinSudoku supporting Oscient Pharmaceuticals’ antibiotic Factive, for which it won the 2007 Manny Award for best professional digital campaign.
“Digital is obviously the wave of the future,” Labadie says. “We’re farther along than some because we’ve had more experience conceiving and executing turnkey digital-oriented promotion programming for clients.”
Labadie notes the agency is doing exciting consumer and professional work for new client deCode Genetics (AOR for DNA tests). Additional new wins include DaVita (AOR for VillageHealth, a Medicare Advantage Special Needs Plan); digital work for Medicis Aesthetics on its cosmetic filler products Restylane and Perlane; and marketing consulting work from both Prism Pharmaceuticals and Syndax Pharmaceuticals.
“When you work with smaller companies that have a favorable trail, they’re very interested in promotion,” Labadie says. “If the FDA gives an adverse ruling, then they’re severely affected overnight. We’ve had a few clients that have been through that in the last year. It’s been a challenge. Fewer products are getting approved and it may be slightly tougher to get products approved.” Labadie says big pharma business can also change rapidly. “There’s such a need to control costs,” he notes. “I think it’s more of a procurement and economic rational that drives it. And the minute a product struggles in terms of generic competition they need to save dollars. They have to do what they have to do. If there isn’t an immediate follow on a product, then the agency business is going to be affected. That’s occurred across the board.”
Staffing hasn’t been too big of an issue—headcount stayed the same. Labadie recently saw “a number of good candidates” for an open position, and he’s confident that advertising is still attractive.
This year, the agency continues to integrate with Publicis Healthcare Group, and Labadie expects greater interaction with network partners. Though there may be fewer new business opportunities than in years past, the agency is pitching.
“The goal is to keep growing, but you have to work harder to grow,” he says. “It’s more competitive than ever. I don’t feel pessimistic. You just have to be good at competing. We’ve done OK in this environment, and it bodes well for the future.”
From the July 01, 2008 Issue of MM+M - Medical Marketing and Media
