As Eli Lilly moves some marketing in-house, should ad agencies brace for fallout?

Eli Lilly is overhauling its marketing strategy and bringing more advertising agency services in-house.

Eli Lilly is moving to a new marketing model as part of its corporate push to manage expenses, but what does that mean for its advertising and marketing agency partners? So far, no one is saying exactly, but it almost certainly means less work as Lilly looks to bring more of the traditional agency-of-record services in-house.

“Based on Lilly’s priorities in the current business environment, and as part of our strategic focus to manage operating expenses, Lilly is moving to a new marketing model that includes both agency assignments and internal capabilities based on brand needs," A Lilly spokesman said via email, adding that "while Lilly brings capabilities in-house, GSW and other agencies will continue to be the agency of record on significant U.S. and global brands.”

RELATED: Lilly shakeup, the sequel: New CEO taps insiders to take reins from exiting execs

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The marketing shift comes amid broader Lilly corporate moves as new CEO David Ricks continues to restructure and change up executives. Last week, he appointed a new R&D chief, manufacturing head and chief financial officer, and he added its the company's information officer, Aarti Shah, to the executive committee.

GSW, one of Lilly’s ad agencies, declined to comment on any business shifts, but a spokeswoman did confirm that chief creative officer Dave Sonderman has left the agency. GSW has had its own year of changes: It inherited a new executive parent company when InVentiv Health merged with INC in May, and more recently, it named a new president of GSW North America, Sonja Foster-Storch, who was previously president at McCann Echo.

Other Lilly agencies include Grey, which has done work for Cialis, Taltz and Trulicity, and Evoke Health, which has done work on Jardiance, the diabetes drug Lilly comarkets with Boehringer Ingelheim.

Eli Lilly spent $414 million on DTC ads in 2016, according to Nielsen data, and it was the fourth highest pharma company spender in its annual listing. A whopping $185 million of that budget was spent on Trulicity alone, according to Nielsen, making it the second-highest media spending drug of the year.

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