Omnicom Group has come out on the positive side of some large agency consolidations involving pharma brands in recent years. Naturally, it would like to win more of those.
That was partly the motivation for the holding company’s decision to simplify its many specialty healthcare agencies into four categories within a division called Omnicom Health Group. Omnicom is expected to announce the reorganization today.
“Our goal is not to knock down walls and not to create homogenized brands,” said Ed Wise (pictured), a longstanding CDM executive who has been promoted to lead Omnicom Health Group. “What we’re going to be looking for is the connective tissues between them and opportunities to collaborate on behalf of clients.”
It’s part of a broader effort, he added, to address the changing needs of pharmaceutical and healthcare clients at a time when both the products and the market environment have become more complex. That requires agencies to look across clients’ businesses and offer more comprehensive services to meet their needs.
The reorganization separates the Omnicom Health Group agencies into four categories: professional, patient, payer, and regulatory/evidence/medical. Harrison & Star, for example, will be considered a professional agency, while CDMiConnect will be categorized as a patient agency.
Each of the roughly 15 agencies involved will retain the individuality of its brands while the new structure, Wise said, is expected to make it easier for network agencies to collaborate. It also formalizes a process that is already occurring and enables future collaborations.
Those agencies employ more than 3,200 people and operate 55 offices worldwide.
As part of the reorganization, Wise said the group will “unwind” CDM Group, which includes CDM Princeton and CDM New York. The individual CDM agencies will continue to operate, reporting to Wise.
Consolidated accounts picked up or retained over the years include GlaxoSmithKline’s U.S. media business and advertising duties on Bayer’s healthcare accounts, which the network shares with WPP, both taking place several years ago.
A bid to merge with fellow holding company Publicis Groupe two years ago would have given both networks more heft in negotiations with media giants Facebook and Google, but ultimately failed due to an inability to integrate their two different cultures.
While 15 agencies isn’t necessarily a sprawling number, the health group claims to serve 70% of the top 100 pharma brands.
Pharma and healthcare clients brought in 11% of Omnicom’s worldwide revenue of $15.13 billion in 2015. That slice of the business edged up slightly year-over-year, compared to generating 10% of overall revenue in 2014.
Omnicom’s specialty communications business, which houses all of the specialty healthcare agencies, generated $1.08 billion in global revenue in 2015, up 8.8% from the $1.07 it reported in 2014. Omnicom’s other business units are advertising, CRM, and public relations. Healthcare-related work, such as some direct-to-consumer advertising, is also produced by other agencies in the Omnicom network like TBWA Worldwide.
Wise reports to Dale Adams, who continues to lead the DAS Group of Companies. Wise has been with CDM for nearly three decades and was promoted to chairman and CEO of Cline Davis & Mann in 2007. LLNS CEO Sharon Callahan joins the group as chief client officer, a role that allows her to lead a newly formed client solutions team that will identify and pursue collaboration opportunities.
See also: Top 100 Agencies 2015: CDM New York
The changes taking place in the broader US health system, like implementation of the Affordable Care Act and ongoing pressure to reduce healthcare costs, have demanded that drugmakers evolve the way they sell products. Fewer doctors make time or are allowed by the hospitals or providers that employ them to see sales reps. More Americans have health plans that require them to contribute more money to covering the cost of their care, including prescription drug costs. And health insurers and pharmacy benefit managers are covering fewer drugs and demanding better outcomes data before they do.
“You can no longer separate the impact of how we need to talk to the professional customer without considering whether the product is on formulary,” Wise said. “It becomes a tangled issue.”
As agencies help their clients navigate such new challenges, they have found that pharma companies often need the expertise of more than one type of agency at a time.
“This is a way to simplify the understanding of what we can offer,” Wise added.
The agencies now part of the Omnicom Health Group are: Agency Rx, Corbett, CDM New York, CDM Los Angeles, CDM Princeton, Adelphi Group, BioLumina, Targis, FlashPoint Medica, Entrée Health Princeton, Entrée Health New York, Healthcare Consultancy Group, CDMiConnect, Harrison and Star, LLNS, and WildType.
Omnicom also announced the creation of a PR umbrella group, according to PRWeek.