Exclusive: GlaxoSmithKline reviews $1bn global media roster to ‘find the right operating model’ after Novartis joint venture
GlaxoSmithKline (GSK) is reviewing its $1bn global media agency roster in an attempt to tweak its structure to the consumer health joint venture it is building with fellow drug maker Novartis.
The two companies completed the deal in March that saw both pool their consumer healthcare assets in a new business. The combined effort, is billed as the best of both companies, and GSK will review its media in order to make sure that statement rings true when it comes to advertising.
The Drum understands that Starcom, PHD and GroupM – all of which have worked with the business in the past - were involved in the final stages of the review.
A spokeswoman for the business confirmed the review in a statement: "GSK Consumer Healthcare is conducting a review of its current media planning has agencies following the completion of a joint venture with Novartis. Starcom has decided not to pursue the opportunity at this time following ongoing discussions around the terms of the review. We would like to thank Starcom for the work they have done on behalf of the Novartis brands. Starcom will continue to service the business through a period of transition."
GSK had split the bulk of its estimated £1bn global media and planning account between Group M and Omnicom in 2013 though continued to let Dentsu run its media in Japan. The move ended its relationship with Publicis Groupe owned Starcom and Dentsu Aegis agency Carat, which had worked alongside PHD and GroupM.
The healthcare business will become the latest global advertiser to review its media in search of a better blend of efficiency and creativity amid changes like programmatic advertising and content marketing. Coca-Cola, Mondelez and Volkswagen are among more than 20 brands said to be reviewing a combined $26bn of media spend so far this year.
GSK’s tie-up with Novartis comes off the back of a tough year for the business, which was slapped with a record fine of nearly $500m in China for bribing doctors. Poor performances from other parts of the business resulted in the bonus paid to chef executive Andrew Witty last year being slashed by 51 per cent.