Tuesday, December 16, 2014

12314: Bayer’s Consolidation Headache.

Advertising Age reported Bayer consolidated global creative duties for a bunch of brands tied to its recent acquisition of Merck’s consumer healthcare business. The White advertising agencies benefiting from the consolidation are BBDO and JWT, while Havas Worldwide and Publicis Kaplan Thaler are big losers. Havas had covered most of the Merck brands involved—including Clariten, Coppertone and Dr. Scholls—for over 30 years.

A Havas spokeswoman emailed, “We are incredibly proud to have been a valued creative and strategic partner of these brands for more than 30 years. … For Dr. Scholls, we launched the most successful campaign with Gellin’, which doubled the business and ran for eight years, becoming part of the vernacular. We have had the Coppertone business for over 25 years and secured its market leadership despite numerous competitive launches. We helped make Afrin the No.1 nasal decongestant in North America.”

The Havas statement underscores at least four points. Let’s start by discussing the first three:

1. Being in the wrong holding company can adversely affect your success.

2. Merck and creative should never appear in the same sentence.

3. Producing effective-yet-mediocre work puts ad agencies at risk.

WPP and Omnicom, via their sheer size and political influence, are masters at crushing opponents in these increasingly common consolidation scenarios—which are essentially cost-cutting efficiency schemes designed by accounting wonks. Why, WPP is even ready to fabricate enterprises from scratch to appease clients and avoid conflicts (and the holding company did just that to deal with potential conflicts between Coppertone, Banana Boat and Hawaiian Tropic), while Omnicom offers an endless stable of generic White ad agencies that brands can be shuttled between forever.

The Merck brands highlighted by the Havas spokeswoman were promoted with lousy advertising over the years. Sorry, but Dr. Scholls’ “Gellin’” never became “part of the vernacular,” except maybe in the hallways of Havas and Merck. And the Clariten campaign? Clear crap. Merck is obviously not interested in—and probably incapable of approving—breakthrough creative ideas.

The Havas spokeswoman’s bragging about results allegedly enjoyed by the brands is pretty sad. The sales figures may build a case for the shitty work, but in the end, even the client isn’t buying the success, as they went ahead and reassigned the billings. Ad agencies that settle for mediocrity are always at risk to lose business.

As for the fourth point, here it is:

4. Minority ad agencies are so disrespected and inconsequential, they don’t receive mention in the proceedings, quietly scrambling for crumbs in the background—despite Bayer’s faux commitment to diversity and internationality.

Bayer Consolidates Global Creative for Merck Brands with BBDO, JWT

BBDO Gains Biggest Spenders—Claritin and Dr. Scholls—But Gives Up Phillips

By Jack Neff

Bayer has consolidated global creative assignments for brands involved in its October acquisition of Merck’s consumer healthcare business with Omnicom’s BBDO and WPP’s JWT. It has also moved the Phillips brand to JWT, the company confirmed.

BBDO picked up the biggest-spending brands including Claritin, Afrin and Dr. Scholls in the Americas. The three brands had a combined $164 million in U.S. media support last year and $135 million through the first nine months of this year according to Kantar Media. The assignments are global, except for Dr. Scholls, which only covers the Americas, because the brand is marketed elsewhere by RB.

JWT picked up the Coppertone and Miralax brands formerly owned by Merck along with the Phillips brand. Phillips was already was with Bayer, but formerly handled by BBDO as Bayer consolidated accounts along category lines. Combined, the brands picked up by JWT spent $50 million in measured media in 2013 and another $50 million through the first nine months of 2014, according to Kantar. Phillips was the biggest spender of the group, with $26 million in measured media outlays last year and $20 million so far this year.

Havas Worldwide handled most of the brands under Merck, including Claritin, Coppertone and Dr. Scholls. Publicis Kaplan Thaler handled Miralax. Spokespeople for Publicis couldn’t immediately be reached for comment.

A Havas spokeswoman said in an e-mail statement: “We are incredibly proud to have been a valued creative and strategic partner of these brands for more than 30 years.”

She noted that Havas helped Claritin become a top allergy brand. “For Dr. Scholls, we launched the most successful campaign with Gellin’, which doubled the business and ran for eight years, becoming part of the vernacular,” she said. “We have had the Coppertone business for over 25 years and secured its market leadership despite numerous competitive launches. We helped make Afrin the No.1 nasal decongestant in North America.

“Having played such a large part in developing these brands, naturally we are disappointed that we will not be working on them going forward. We wish Bayer and their roster agencies all the luck in the future.”

BBDO referred calls for comment to Bayer. JWT couldn’t immediately be reached for comment.

Bayer already had shifted media from Interpublic’s Initiative to WPP’s Mediacom in October, shortly after completing its $14.2 billion acquisition of the Merck brands.

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