Two agency giants duke it out for GlaxoSmithKline $900M media account

The newly consolidated GSK Consumer Healthcare business is in turn consolidating its media planning and buying. Group M's Mediacom and Omnicom Media Group's PHD, two of the largest global media agencies that are already on the roster for GSK, are in the final bid for the estimated $900 million account. PHD currently handles North American duties for GSK, while Mediacom handles the overseas work.

The review comes after the $16 billion deal closed in March between GlaxoSmithKline ($GSK) and Novartis ($NVS), in which GSK swapped its cancer portfolio to Novartis for its vaccines--excluding flu--and the two created a consumer health JV. The British pharma took the larger stake (63.5%) and managerial control of the venture.

GSK confirmed the review to MediaWeek. "Following the joint venture between GSK and Novartis, the new GSK Consumer Healthcare business combines the best of both companies," the company said in a statement. "For media planning, this presents the opportunity to re-calibrate the services GSK Consumer Healthcare requires from its media partners. Therefore we are reviewing the structure of our agency support to drive further efficiencies and define the right operating model to support the business."

GSK also noted that Publicis Groupe's Starcom, which has worked on the Novartis business, declined to participate in the review.

Some pharma-watchers had questioned the big deal swap. On the GSK side, analysts wondered why it would shed oncology, which is one of the hottest fields in pharma now. For Novartis, eyebrows were raised about the high price it paid for those cancer drugs. However, analysts also agreed that both sides benefit in each gaining products more aligned to their core strengths.

- read the MediaWeek article

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