GSK settles big media review, chooses incumbents for estimated $900M account

And the winner is … everyone. GlaxoSmithKline ($GSK) chose both of its incumbent agencies to continue handling media planning and buying for its newly consolidated GSK Consumer Healthcare business.

The two media agencies competing in the review, WPP's Group M and Omnicom's PHD, will continue to split duties, Advertising Age reported. Both agencies had worked for GSK before its big asset sale-and-swap with Novartis ($NVS). The Swiss drugmaker's previous media agency, Publicis Group's Starcom, declined to participate in the review.

Mediapost published GSK's statement on the assignment: "The comprehensive review of our media agency partnerships has determined GroupM (MediaCom and Mindshare) and PHD are each best positioned in unique ways to partner with GSK in achieving our growth ambitions. Both are world class global media agencies and will be key partners in driving media strategy and trading for the new GSK and we are delighted to make these awards."

PHD had handled North American duties for GSK, while Mediacom handled the overseas work, but it was not immediately clear whether there would be any changes.

The review was precipitated by the multibillion-dollar deal with Novartis, in which GSK exchanged its cancer portfolio for most of Novartis' vaccines. GSK Consumer Healthcare is now a joint venture between the two pharmas, with GSK the larger stakeholder at 63.5%, and the managing partner.

Estimates vary on the value of the media account, with Ad Age quoting it at more than $600 million, while MediaPost called it a $1 billion account and Adweek earlier referred to it as a $900 million account. Although no matter the number, it's a significant amount of media spending.

The GSK selection follows Johnson & Johnson's ($JNJ) decision last week to hand its $1 billion media buying account back to Interpublic Group M's J3 dedicated J&J unit from Omnicom's OMD.

Like other pharma companies that include consumer divisions, GSK spends more on marketing consumer division products even though more revenue is generated by the pharma business. Ad Age reported that in 2014, GSK spent the largest part of its media money on OTC and consumer brands, led by Sensodyne at $93.4 million, Abreva at $25 million, followed by Tums and NicoDerm CQ both at $23 million. On the pharma side, GSK's top spending brand was COPD drug Breo Ellipta at $97 million, Ad Age noted.

- read the Ad Age article
- see the Mediapost report

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