The State of Advertising The commercialization and promotion of pharmaceutical products depends on relationships for success. The attitudes, personalities, and respect that exist throughout the pharmaceutical advertising landscape play an important role in the evolution of a brand, and are a vital part of the many tasks and projects that make up advertising. Successful advertising, which includes marketing to physicians and patients, development of conference materials, education posters, public-relations activities, Internet activities, and the promotional tasks that support every brand, relies on the combined creative and strategic brainstorming of both client and agency personnel. Executives at the pharmaceutical, biotech, and device companies interviewed for this Forum, as well as respondents to PharmaVOICE’s recent reader survey on the state of advertising, identified people and relationships among the key criteria when choosing agencies to pitch for business. Other criteria identified as important to clients when evaluating a potential ad agency partner include geographic scope, reputation, experience, creative, customer service, speed, and cost. And despite overall industry concerns about tightening expenses and decreasing marketing budgets, the majority of respondents to PharmaVOICE’s reader survey planned to increase their advertising budgets for direct-to-consumer and direct-to-patient promotion advertising and maintain their current budgets for professional/journal advertising, Internet promotion, and direct-mail promotion. Traditional advertising outlets, such as professional/journal and direct-to-consumer advertisements, and direct mail are expected to remain high in importance, however, executives surveyed by PharmaVOICE also noted that public relations is another area that will receive increased attention over the next year because of the public’s increasingly negative perception of the industry. James Mendenhall Senior Director, Marketing and Sales Administration Astellas Pharma U.S. Inc. The whole state of advertising has changed, it is not like it was five or 10 years ago. Advertising now is much more sophisticated, and much more specific as far as what companies are able to offer to their customers. Thought Leaders Reggie Bowerman. VP, Marketing, MGI PHARMA Inc., Bloomington, Minn.; MGI Pharma is an oncology-focused biopharmaceutical company that acquires, develops, and commercializes proprietary products that address the unmet needs of cancer patients. For more information, visit mgipharma.com. Barry Brandstetter. VP, Marketing, Xanodyne Pharmaceuticals Inc., Florence, Ky.; Xanodyne is a specialty pharmaceutical company that provides patient care in women’s health, urology, and pain management. For more information, visit xanodyne.com. JR Buzzelli. Product Director, Women’s Healthcare Marketing, Johnson & Johnson — McNeil-PPC Inc., New Brunswick, N.J.; Johnson & Johnson is the world’s most comprehensive and broadly based manufacturer of healthcare products, as well as a provider of related services, for the consumer, pharmaceutical, and medical-devices and diagnostics markets. For more information, visit jnj.com. Barri Falk. VP, Marketing, Reproductive Health, Serono Inc., Rockland, Mass.; Serono, with headquarters in Geneva, Switzerland, is a global biotechnology leader focused on reproductive health, neurology, metabolism, growth, and psoriasis. For more information, visit seronousa.com. Robert A. Girondi. Senior Director, Agency Network Relations and Media Planning, AstraZeneca LP, Wilmington, Del.; AstraZeneca focuses its skills, experience, and resources on six important areas of healthcare: cardiovascular, gastrointestinal, infection, neuroscience, oncology, and respiratory and inflammation, which represent the majority of the worldwide burden of disease. For more information, visit astrazeneca.com. Michael Innaurato. Group Executive Director, Rx Product Management, Purdue Pharma L.P., Stamford, Conn.; Purdue Pharma and its independent associated companies in the United States are known for their pioneering research on a principal cause of human suffering: persistent pain. For more information, visit purduepharma.com. Dreama Kirby. Marketing Manager, Blaine Pharmaceuticals, Fort Wright, Ky.; Blaine is focused on targeted areas of pharmaceuticals that may have been overlooked. For more information, visit blainepharma.com. Dave Knocke. Executive Director, International, Ovation Pharmaceuticals Inc., Deerfield, Ill.; Ovation is a fully integrated pharmaceutical company that acquires, develops, manufactures, and markets high-value specialty pharmaceutical and biological products that satisfy unmet medical needs. For more information, visit ovationpharma.com. Sue Ellen Knutson. Director, Consumer Marketing, Astellas Pharma U.S. Inc., (created through the recent merger of Fujisawa Healthcare Inc. and Yamanouchi Pharmaceutical Co.) Deerfield, Ill.; Astellas is a pharmaceutical company, with global headquarters in Japan, whose mission is to contribute to the improvement of health throughout the world through the provision of innovative and reliable pharmaceutical products. For more information, visit astellas.com. James A. Mendenhall. Senior Director, Marketing and Sales Administration, Astellas Pharma U.S. Inc., (created through the recent merger of Fujisawa Healthcare Inc. and Yamanouchi Pharmaceutical Co.) Deerfield, Ill.; Astellas is a pharmaceutical company, with global headquarters in Japan, whose mission is to contribute to the improvement of health throughout the world through the provision of innovative and reliable pharmaceutical products. For more information, visit astellas.com. Amy Romero. VP, Marketing, Adolor Corp., Exton, Pa.; Adolor is a biopharmaceutical company specializing in the discovery, development, and commercialization of novel prescription pain-management products. For more information, visit adolor.com. Tim Rudolphi. Director, Neurology Marketing, Takeda Pharmaceuticals North America, Lincolnshire, Ill.; TPNA is the wholly owned U.S. pharmaceutical subsidiary of Takeda Pharmaceutical Company Ltd., based in Japan. For more information, visit tpna.com. Michael J. Sinapi. Senior VP, Marketing and Sales Operations, Wyeth Pharmaceuticals, Madison, N.J.; Wyeth is a global leader in pharmaceuticals, consumer healthcare products, and animal healthcare products. For more information, visit wyeth.com. Juliane M. Snowden-Andrew. Director Corporate Communications, Ventana Medical Systems Inc., Tucson, Ariz.;Ventana Medical is a supplier of automated diagnostic systems to the anatomical pathology market. For more information, visit ventanamed.com. Before the Pitch Before being invited to pitch, agencies complete a RFP, which is thoroughly evaluated by the clients. According to marketing executives, reputation, experience, and organizational structure rank high on the checklist of criteria. Rudolphi. Selecting an advertising agency is one of the most important decisions a pharmaceutical company’s marketing team will be called on to make. When deciding which agencies we would like to invite for a pitch, we look for an agency that has the proven creativity to bring our message and position to life in a distinctive and compelling way. We also look for an agency that not only has the experience to add to our team’s understanding of our specific market, but also one that shares our business style and corporate values. Past performance may not be a guarantee of future performance in mutual funds but it is the best indicator of what the future holds with an advertising agency. So we look closely at the type of work they have done for other brands, at the type of success they have achieved, and the types of markets they have worked in. Buzzelli. When I have a brand that needs an agency, I always consider the agencies I have worked with in the past. I also talk to my colleagues to find out if they can recommend any agencies that would be a good fit for the particular project I will be working on. And I read a lot of industry magazines to learn about agencies and what they have done specific to the therapeutic category I am working on. Mendenhall. One of the most important criteria for considering an agency is that it has to be a good organizational fit with our organization. We have to work with the agency staff, so we may as well like them. Second, is the agency’s scientific abilities — does it have good writers and a good solid medical department? The third criteria is its marketing/advertising deliverables. The big question we always ask is, does the agency understand our market and can it communicate the message and get our customers to notice? Knocke. When I evaluate or select agencies, I tend to pick agencies based on prior relationships and my familiarity with their performance and core competencies. I have been in the industry almost 20 years, and I have good relationships with several agencies; I know them personally and I know their performance and core competencies. An agency’s track record is the evaluation criteria that comes out on top. Also of importance are prior and/or current experience in the therapeutic area/disease state and a track record of working with smaller and rapidly growing companies. Sinapi. The three criteria we evaluate before inviting an agency to pitch are therapeutic area expertise, for both professional and direct-to-consumer marketing; level of relevant experience based on the product advertising needs — supporting a new product or launch, a new indication, a repositioning, and so on; and previous experience with the agency as well as the reputation of the agency within company. Snowden-Andrew. Knowledge of our industry is the most important criteria. Being a medical-diagnostics company, there are few agencies that truly understand this space. The second criterion is whether the account reps assigned to our account have worked for one of our competitors. The third criterion is creativity and fresh thinking. Diagnostics can get boring. Romero. Typically, before inviting an agency to pitch we do a “reference check.” We ask team members and other external pharmaceutical colleagues what is the agency’s reputation in the industry and about any experience they may have with the agency. Falk. I look at a several key factors when evaluating advertising agencies, specifically: therapeutic area expertise; reputation for creating sustainable, unique, credible, competitive, and creative campaigns; ability to work in a complex and regulated environment; and the percentage of the agency’s annual revenue that we will represent to ensure we receive the service we require. Kirby. Since Blaine Pharmaceuticals is a smaller, specialty pharma company with a limited budget, we need to be very selective in terms of the agencies we invite to pitch. The agency has to meet three criteria. First, is the agency willing to grow with our company? If the agency is willing to make an investment in our company and help us grow, we will continue to invest our expanding resources in it. Second, the agency has to have experience working with similar products. Our product portfolio consists primarily of OTC products, so it only makes sense to work with an agency that has proven itself in this area; we are not in a position to be the first success story for an agency. We need to see actual results and success for other clients the agency has worked with in the past. And third, can the agency deliver what it promises? Past performance predicts future success. Bowerman. Therapeutic/category experience is the first criteria we look for before inviting an agency to pitch. We are an oncology-focused biopharmaceutical company. Oncology is a unique marketplace for several reasons. Before we seriously consider any agency of record, we want to know that they understand the dynamics of the oncology market and have worked on oncology brands. This experience places them that much further along the learning curve. Next we look for conflicts of interest. For obvious reasons, we’d consciously stay away from an agency that already has a brand in the same category in which we will compete. However, chemotherapy is a broad category, so we’d be judicious in how we evaluate this, because asking for therapeutic experience, while not allowing the agency to currently be working with any chemo agents doesn’t make sense. But the agency can’t have any direct competitors on the market, or ones near to market. We also look for a blend of reputation and portfolio of work. An agency’s reputation, for good or for ill, is important. The agency may be strong in some areas, such as creative execution, while less strong in others, such as customer service. We consider our own experience with the agency, experience from “past lives,” and the agency’s position in the realm that it occupies. Concurrent with that, we certainly take a look at the brands, regardless of category, that the agency currently supports and review its work to simply see what it does, how well it does it, how fitting it seems to be for the brand, and so on — a subjective, qualitative assessment. Brandstetter. We are a relatively young company and have not had a need to have agencies pitch our business. But when we do invite agencies in to pitch — in the not too distant future — we will be looking at strategic capability; creative ability; the ability to execute the strategy through the creative; and team dynamics — the chemistry between the team being assigned to our account and our brand team. Knocke. When I look at an agency, it’s great to have art directors and creatives with tremendous talent, but I also look at their strategic thinking and whether they have an analytical component — do they understand all the data, the competition, how physicians practice medicine, how physicians manage a disease. If an agency doesn’t have that strategic component then it is just another tactical execution shop, and there are a lot of those. The strategic side is really where we want to pay the money and hire a good agency. Knutson. When evaluating agencies, I look for their degree of experience with DTC, how well they “speak” to patients/consumers, and their concepts. Agency Strengths Once an agency is chosen, clients look to these partners to provide key strengths, including strategic capabilities, creativity, category expertise, and clear communications. Mendenhall. A key strength for an agency to have is the ability to communicate the message clearly and precisely, and to make a target audience stop and take a look at what we are trying to deliver. Communication is irrelevant if people don’t stop to look. An agency also has to have the ability to understand the vision and then build a brand. The most important things are consistency of the message and visual elements. Romero. Strong agencies are very proactive and look for ways to help create synergy. If there is an opportunity to leverage some creative materials or messaging and repurpose them in other ways, that can be a very proactive way for an agency to help us. Also, being very mindful of the budget is an important strength. Agencies that become really good long-term partners, work both effectively and efficiently. Kirby. I look for an agency that is strong in the following areas: creativity, clear internal and external communications, and senior-management involvement. First, I expect the agency to be more creative than I am; after all this is one of the main reasons I am working with an agency. If I believe that I could have come up with some of the creative on my own, it makes me question why we are outsourcing this function at all. Second, a clear flow of communications makes all the difference. A good agency will only assign account executives who have strong communications skills. This allows for the client and the agency to be on the same page, and ensures that everyone within the agency is working toward clearly defined objectives and goals. Third, I want to make sure that we will be working with the individuals who pitch the business. Knocke. The most important strength for an agency to possess is strategic communication planning. One key variable in our industry that hasn’t changed is that we still have to have a science-based marketing approach. Part of this approach is understanding the science as well as understanding the subpoints, such as the market and the competition. Some agencies emphasize just the creative aspect and how things look and feel, but if they don’t understand the strategic foundation — the situation analysis, competitive analysis, and of course the features and benefits of the product — they will never get to a good positioning or tactical execution. Falk. There is so much clutter in the market that companies need agencies to shelve the cookie-cutter campaigns and present unique and innovative ideas that truly demonstrate their ability to think “out of the box.” I place a high emphasis on creativity versus quantity, and need an agency that can react quickly to today’s changing environment. Snowden-Andrew. Strong messaging skills can set an agency apart from its peers, as can knowledge of our industry, our competitors, our customers, and patients. I’m talking about in-depth knowledge; what are the challenges each of these constituencies face, how are they overcoming the challenges, how does Ventana fit into the picture, and how can Ventana set itself apart and exceed expectations in meeting those needs? Rudolphi. We look for agencies to have a proven strategic ability, an excellent creative product, experienced and dedicated staff, and the ability to work with our team’s business style and corporate values. All of this will help ensure a strong and successful working relationship. The quality of the relationship is important because this will have a lot to do with how closely we involve them in all aspects of marketing, how carefully we craft the guidance we provide, and how clearly we set and articulate expectations. We insist that they be a part of all major discussions on strategy and direction, which is another reason to bring agencies in well before launch. We always remember that it is our brand but we want their point of view, even if we choose to disagree. Brandstetter. Strategic capability is an important agency strength for me. Good creative is important as well; it must capture and communicate the essence of the brand. Account management also is an important strength. Bowerman. Therapeutic/category experience is a very important strength an agency must have. Capability is another strength. We want to be sure that our agency partner is qualified to deliver what we are seeking. This may be superb creative for a visually arresting campaign to generate awareness in a cluttered or satisfied market. Or it may be copy expertise in finding compelling ways to clearly explain a complicated disease state or innovative mode of action. Or it might be experience in reaching a specific audience, such as nurses, patients, and so on. A dedicated account team is another crucial strength. Regardless of the size of the brand, a company always wants to avoid being lost as the small fish in a big pond. Yet it’s not realistic to expect to always be an agency’s biggest or most important client. As the client, we want an agency that puts an account team together that is clearly dedicated to our business and our mutual success. Chemistry is not so much a strength — it’s either there or it’s not — but we seek a partner, not merely a business relationship. We want an agency that we mesh with well, personally and professionally. This is a relationship that we hope will be in place for a long time. Our selection process values this element a great deal. An agency could have all the expertise and capabilities in the world, but if we don’t “get along,” it won’t make for a profitable long-term relationship. Innaurato. We believe that the balance between an agency’s strategic capabilities and creative capabilities is an important strength. Making sure that the agency is involved in the development of the strategy is very important. An agency needs strong strategic people to guide the creative team. Brand managers tend to be very strategic, very focused on the marketplace, the conditions in the marketplace, segments of the category, and the market research that backs up why we make decisions the way we do. We look for an agency with excellent creative capabilities coupled with strategic thinking to help us develop our campaigns. Sinapi. The ability to truly partner with both the brand team and the company is an important strength for an agency to possess. Other key agency strengths we look for in our partners include the ability to provide strategic thought leadership and vision, not purely a focus on the creative; an understanding of the product, market, and target audience; and being able to provide a global market perspective. Buzzelli. I look for strategic strengths, account management, and creativity; these are all pretty standard. And I don’t think these have changed much over time. Knutson. I look for advertising agencies that have good direct-to-consumer concepts, strong patient-education abilities, and a desire to be a partner. They need to be able to foster good team work and have many resources to draw from. Room for Improvement The seasoned marketing executives participating in this Forum have identified communications and account management among the areas they believe agencies could improve upon in the delivery of their services. Mendenhall. Communication during the briefing process is critical and one area where agencies could really improve on in terms of delivery of service. The creative briefs should be a living document. When projects go wrong, generally it is because a brief was forgotten along the way, so agencies need to have a good, solid brief process. Bowerman. As far as delivery of service, agencies can improve on accuracy. There’s a fine line between pushing our agency partners to turn around projects in a rapid fashion to meet deadlines or production timelines, and expecting perfection. It’s inevitable that mistakes will occur. And they certainly occur on both the agency side, as well as with the brand team or internal production team. But striving for perfection, always seeking to eliminate the errors, finding ways to control quality without losing time or efficiency is the goal. Cost is another area for improvement. It’s a cliche, but managing annual promotion budgets means the brand team must be efficient in all they do. Having accurate estimates of both hours and OOPs allows for better budgeting. But it’s also incumbent on the brand team to make sure the agency fully and clearly understands the project and is willing to accept higher costs if it makes changes midstream. It’s a two-way street. Romero. Agencies can improve things at the point of service and with their account team leader. Having an experienced, smart, and strategic thinker in that position is really key to the success of the relationship. Snowden-Andrew. I worked in agencies for seven years, so I have a lot of knowledge from both sides of the table. Attitude is what agencies can change most rapidly, and that would have the most dramatic improvement on the relationship. Sometimes we work in an environment where everyone has to have a “say” in the advertising; I may have to ask for changes with which I may not totally agree. I want my agency to commiserate with me and then make the change; don’t tell me I’m wrong. Another area in which agencies can improve is faster turnaround times. I have a couple of agencies that will work all night to make my changes, while I have worked with other agencies that say, “You want this when?” Needless to say, I prefer working with agencies that do what I need without complaint. Fundamentally, agencies need to remember who the customer is; some seem to have forgotten. Falk. Demonstrating market impact and return on investment is extremely important. Agencies need to establish metrics to measure the impact of their recommendations and programs. Equally important, the nature of our business requires ad agencies to be flexible and to be able to change course midstream. We also look for flexible pricing structures to accommodate the changing market and our changing needs. Sinapi. Agencies could improve the delivery of their services by maintaining a continuity of staff experience during turnover; increasing proactive communications with the teams around status, anticipated delays, and so on; and understanding and aligning with our promotion copy compliance processes. Buzzelli. I am always interested in having an agency step up in a stronger capacity from a strategic standpoint. I am also interested in agencies that take a little more ownership — maintaining their level of enthusiasm even after the campaign is launched, monitoring the campaign, and sharing and reviewing the results. Sometimes agencies are very excited to get a new campaign going, but then things wane. Agencies sometimes think a bit too much about new business and not enough about maintaining the current business. They need to understand that when a brand is successful then they will get more business from me, and I will inform my colleagues about their strengths. We all know word of mouth is a strong form of advertising. Knocke. Anticipating needs and proactively providing solutions is an area where agencies can perform better. Sometimes there has to be better discipline with regard to tight project and budget management and better communications when there are variations in deliverables, timelines, and/or budgets. Kirby. I may be more critical than a product manager at a larger company, however, I have to be very selective due to the nature of our company. One area in which agencies can improve their delivery of services is with regard to sticking to a proposed budget. Many times agencies assume that it doesn’t matter if the project is 30% over budget. Agencies need to be conscious of the client’s budget at all times. Case in point: an agency’s internal meetings can be more efficient; sometimes they are much longer than they need to be or the whole team is present although it is not necessary. I know that everyone involved in a project within an agency has to bill their hours to a client, therefore they need to be aware of how they are spending their hours and how this impacts the client’s budget. Also, many proposals do not include line-item budget details, such as stock or custom photography, which can be a shock when receiving invoices when these additional costs weren’t included in the original quote. Many agencies assume the client knows what is involved in the proposal budget, however, every agency has a different idea of what the proposal should entail. Therefore, I think it is important for agencies to be crystal clear when bidding on the business and stick to the confines of the budget. Brandstetter. I think agencies and clients can do a better job of defining expectations in terms of the deliverables. This is the responsibility not only of the agency but also of the client. Both sides need to make sure that everyone has the same set of expectations. Another important area for agencies to focus on is staffing the account with people who have the right level of knowledge and expertise and who are strategically oriented, and not simply administrative or tactical in their approach. Kirby. Timely delivery is an area where agencies can improve. Some agencies are really good about sticking to the timeline. But I’ve also worked with a few agencies that were habitually late in delivery. If the timeline is not met, I have a hard time believing that the agency is working as hard as I am to deliver. Eagerness to get the job done also is important. Larger agencies seem to set their own schedules instead of working with the client’s schedule. This frustration led us to hire a graphic designer and build a “mini-internal ad agency” to do many of our smaller projects. A project may only take her one day to complete compared with a larger agency that might take two to three weeks to complete when conference calls, creative briefs, and revisions are factored in. Innaurato. The objectives for any work or services that are being performed have to be clear up front, and that is an area for improvement for the agency and the client. If objectives are clear before a project or a service is started, the outcome and efficiency can be so much greater. When agencies come in, I find myself asking them as well as my brand group: What is it that we are trying to achieve? What are the objectives for this project? If the agency continually asks us what our objectives are for the assigned tasks and services, it makes the deliverable that much better. The Evolving Client/ Agency Relationship Relationships between a client and an agency can range from a working partnership to a vendor-type situation. Budget constraints, agency-staff turnover, and increased regulatory guidelines are some of the factors company executives have identified as impacting their relationships with their agencies. Innaurato. People are very focused on spending, and budgets across the industry have changed for a variety of reasons. Advertising agencies can deliver value by providing competitive landscape analysis that optimizes the budget allocation. Coming to the brand team with this information, working with them to decide what conclusions can be drawn from the data, and recommending actions to be taken is extremely valuable. This is an area in which our agencies and brand teams have been working more closely in the past couple of years. Sinapi. Because clients have less tolerance for ongoing agency account team attrition/turnover, there now is more of a focus on coordination of activities between various tactics. Rudolphi. I see a negative trend in the business developing, one that I am committed to not let happen with my brand. In my previous jobs at Parke Davis and now here at Takeda, the agency was a trusted partner that was involved in every promotional idea. I see more and more managers looking to keep their agencies at arm’s length, which diminishes their ability to contribute, and in my opinion, diminishes the end product. Snowden-Andrew. In some ways, the client-agency relationship has changed drastically. In some cases, the advertising agency becomes an external division of the company, because it is so involved with everything it does. In other cases, it can feel as though agencies distance themselves from the company, because they do not want the responsibilities that come with being relied upon too heavily. I also have encountered, in some cases, where ad agencies will change account people at a whim, which is distressing for the client. As the client, we lose consistency and have to retrain the next person coming on the project. Mendenhall. The biggest issue with the client/agency relationship falls primarily under the OIG guidelines. Agencies can no longer be all things to all people as in the past. In many cases, their success derived from being able to offer multiple services. Now, advertising agencies are forced to pick an area that they are strong in and fill their customer’s needs in that particular area. There are areas where advertising agencies can’t provide multiple services to pharmaceutical companies, such as promotion as well as medical education, advocacy development, or medical writing. Focus is now the key to success; agencies have to know their business strengths now more than ever. Romero. Today, because there are a growing number of pharmaceutical partnerships in the industry between large and small pharmaceutical companies, I believe that some of the dynamics of how advertising agencies manage their clients have changed. In a partnership situation, the agency has to manage the input from two clients that may have differing objectives and opinions. This is another reason why it’s important that the agency has a very proactive, experienced account person; this person makes sure that both companies’ needs are addressed. Buzzelli. A positive evolution in the overall agency/client relationship is that agencies are more solutions oriented than they used to be. I don’t want my agencies to bring me questions; I want them to bring solutions, to think forward, and to anticipate. Knutson. I believe advertising agencies are listening better to their clients and trying harder to meet client expectations. There are a lot of other agencies that clients can choose from and they can be replaced; they are now taking that competition seriously. Welcome Aboard Whether at a large company with many brands, or a small company with niche products, most marketing executives agree that Phase III is the optimal time to bring an agency into the loop. Brandstetter. I would bring in a traditional advertising agency in Phase III. There are obviously needs before that, such as publication planning, public relations, and medical education. If an agency has all of those capabilities and I want to put everything with that one agency, I would bring them in earlier. But as far as traditional ad agency work, I look at Phase III as an entry point. Innaurato. We generally bring agencies in about 18 months to two years before anticipated approval and launch, which is generally during Phase III. Bowerman. The point that we bring in an agency depends on some factors. Ideally, we want the agency of record on board long enough to fully grasp the brand, its market, competitors, and to participate in the full spectrum of premarket research. If it’s an established market, with many entrenched products in the category and the customer needs are well identified, that timeframe may not be nearly as lengthy. Conversely, if a brand is highly novel, first in its category, or customer needs are not uniquely defined, having an agency on board earlier to learn along with the brand team is invaluable to future brand development and success. In the latter situation, there also may be more market development activities that are required before launch, thus there is a need to engage an agency earlier. In addition, should the brand be granted an accelerated review, waiting to select an agency until Phase III completion or NDA filing will mean a much shorter window for premarket preparation. So each brand situation can be different. In our experience, we ideally engage an advertising agency about 12 months to 18 months before launch. Romero. Typically, we employ an advertising agency during Phase III — once there are enough data to really understand how to position the product. Then all of the creative and messaging can be developed to support what we believe to be the product’s profile. Falk. Typically, we will begin work with an agency during Phase II to initiate the process of positioning, message platform development, and drug naming. Sinapi. The entry point of an agency varies, however, it is usually during Phase III. Agencies can be brought in at Phase II, to assist with proof of concept, positioning, and strategic insight. Buzzelli. It is normal for an agency to come in during Phase III and ideally this should be 18 months before the launch. But most of the time agencies are engaged anywhere from six months to 12 months before the launch. I have seen some activity in Phase II, but it is a rare situation. Rudolphi. We typically want to begin professional agency involvement at least 18 months to 24 months before the anticipated launch of the brand. This gives us time to make sure that the agency’s expertise in messaging, positioning, and product development can help us build the perfect launch plan and to optimize the first two years of the brand’s promotion. Kirby. Blaine Pharmaceuticals predominantly focuses on revitalizing neglected niche products that are already on the market, so we bring the agency in after the product has been launched. For those products that we acquire and that are “ready for market” we will involve the agency after some initial market segmentation decisions have been made. Mendenhall. The optimal time to bring in an agency depends on the pharmaceutical company’s internal capabilities. A smaller pharma company may have to bring in an agency earlier, even earlier than Phase III, as the agency often fills the role of a marketing associate to work on tactical projects and to help develop the brand image. For a larger pharmaceutical company with a good infrastructure, Phase III is sufficient. Snowden-Andrew. As a diagnostic company, we don’t do clinical trials per se. Typically, we bring in agencies as soon as the product has left the research group and moved into the development group. This can be anywhere from three months to three years before the product launches. For other products, the agency is on board much earlier in the game. Knocke. Generally we bring an advertising agency in during late Phase III or after the application is filed with the FDA. selection criteria: tactics based The question of whether to put all of a brand’s advertising needs under one agency umbrella depends on the company’s size and sector. Sinapi. At Wyeth we do use different agencies for different functions. Typically, professional, DTC, Internet, e-marketing, and public-relations activities are awarded to separate agencies. While we have sometimes tried to consolidate activities with one agency, it is often the case that no single agency is the best choice for each specific area. To ensure we have the best agency proposing and implementing the best ideas in each area, we usually go through a competitive pitch process to support agency selection for the major agency-related tactics that will be funded. Bowerman. If an advertising agency has multifaceted expertise, we will certainly consider all of its capabilities. No question having one agency would present inherent advantages in the established relationship, allowing internal transfer of brand knowledge and understanding and developed client-agency processes. But merely possessing a capability alone is not sufficient. For example, the selection of a PR agency should be driven by the best match with the brand’s needs, not merely because the unit happens to be part of the same larger organization as the advertising agency. In our experience, we’ve gone both ways. We’ll generally consider the related agencies, but let the needs of the brand ultimately make the final decision. Falk. As the business of healthcare marketing has shifted to direct to patient and direct to consumer, the way we communicate, the medium with which we communicate, and the look and feel of the communication differs from traditional marketing aimed at healthcare professionals. Thus, we recognize the significant value of both healthcare professional marketing and consumer marketing. In Serono’s reproductive health therapeutic area, we segment our agency relationships to include one agency for healthcare professional marketing and one for patient/consumer marketing. We also engage a media buying agency for the purchase of television, radio, print, and online media. And we engage a PR agency for all external disease awareness, consumer, and media communications. To ensure synergies and integration of our agency strategies and messages, we established an annual agency summit that brings all of our agencies together. Buzzelli. I haven’t seen an advantage in using the same agency for all functions. I think there is more of an advantage to using different agencies for different functions because this generates some creative abrasion, which is a good thing. There are challenges in getting all the agencies to work well and play well together, but I like that creative abrasion; it brings a lot of good ideas to the forefront. Romero. My preference is to keep as many of our activities with one agency. This reduces the amount of external communications that are necessary. Also, because there are only one or two conduits, communications improve. But it has been my experience that nine times out of 10 this doesn’t work because it is very difficult to find agencies that have expertise in all of the areas that they say they do. An agency may be very good at DTC, but not so good in managing the hospital sector. It doesn’t always come down to a one-size-fits- all situation, but that would be the preferred mode if we could find an agency that could do all things well. Knocke. In my experience, I have selected different agencies for advertising and medical education. I have not found one agency, or an umbrella company, that does both well. Also, depending on the product, public relations may be separated. If the marketing team does its job well, very effective teamwork/efficiencies can be achieved by using different companies, and with better outcomes. Innaurato. We try to keep all the services under one umbrella whenever possible, but this is dependent on the capabilities of the agency. If agencies don’t have the capability internally, most of them have sister companies that we can turn to for pretty much anything. Rudolphi. Our philosophy regarding marketing partners is to pick the best-in-class agency, regardless of corporate or network affiliation. We think this is the best way to ensure the best work and product for each specific function. By limiting ourselves to one network, we may be eliminating the best partner for each function. Kirby. We use different agencies, depending on the function for the brand. Ideally, we would like to work with one agency for all functions, however, we’ve had a difficult time finding one advertising agency that has all core competencies in all the areas that we work in. This may be because we can’t afford to work with the largest agencies. Many of the advertising agencies that we work with have two to three core competencies in-house; then they farm out the other functions to sister companies. We would rather have direct contact with all of our partners instead of having the agency outsource and manage that particular function with a sister company. Snowden-Andrew. We have an agency that does all of our professional, direct-mail advertising, and marketing communications. We have another agency that specializes in new media, such as designing all of our corporate presentations and annual reports. I handle the public-relations function internally. But, if I were looking for a PR agency, I would not choose one because of its affiliation with an advertising agency. Brandstetter. As I look to bring our new products to market in the not too distant future, I would look at the needs of the brand and the capabilities of the agencies, and then make the decision based on what is going to achieve the most successful launch for the product. The Preferred provider Strategy: pros and cons Executives participating in this Forum differ in their opinions of preferred provider strategies. Some do not believe this model works well for advertising, while others find the familiarity of working with a set group of agencies convenient and efficient. Bowerman. We do not formally have a preferred provider strategy. But as our portfolio grows, it is natural that we will consider existing agency relationships in any selection process. For example, we recently awarded another brand to an existing agency of record for a multitude of reasons, all of which were consistent with how we’d select an agency to begin with. In this instance, the very positive existing relationship was an added benefit that we will seek to leverage and build upon. If there is a challenge to keeping multiple brands with the same agency, it’s ensuring that there is no loss in the quality of the team assigned to the brand. In other words, we must ensure there is the same “account team chemistry” for the new brand that there was for the existing brand, and not merely accept the new team simply because they currently have capacity within the agency. Furthermore, like any relationship, both sides need to ensure that neither takes the other for granted. The client can’t assume everything will easily, appropriately, or naturally transfer to the new brand. And the advertising agency can never assume that it has a lock on future business. Kirby. Blaine Pharmaceuticals does not have a preferred provider strategy, nor is our company moving in this direction. This is primarily because such an arrangement may limit our ability to be flexible and nimble, which is important for a small, specialty pharma company. Mendenhall. We have used a preferred provider strategy in the past but as we go forward we are moving away from this strategy. Under the preferred provider model, sometimes an agency gets locked in and takes what a client really wants to get done for granted and assumes it is there for the long term. These relationships are like marriages and it is hard to get a divorce if we need to refresh our strategies. By not having one preferred provider everyone is kept on their toes, they remain sharp, and help us drive our business Romero. At Adolor, we have not employed a preferred provider strategy. Because we are a small company it makes it difficult to leverage the “economies of scale” that big pharmaceutical companies can offer. But because of our big pharma partnership, in many cases we do use its preferred provider strategy to streamline the partnership process. Sinapi. We have employed a preferred agency strategy for several years. This program has been beneficial in terms of recognizing partnerships with agencies of record and promoting these relationships throughout the company to foster greater synergies for the mutual benefit of the agencies and ourselves. We have also gained efficiencies by working with preferred agencies wherever possible. We can leverage the existing commercial relationship, which allows for much faster ramp up of activities. Girondi. More than two years ago, AstraZeneca made the commitment to assign the majority of its marketing communications work to the many and varied resources available within one or the other of two agency networks: Publicis and WPP. Since January of 2003, all of our creative work, and an increasing amount of our other promotion, has been assigned to — and executed by — cross-functional, custom-designed teams that provide the appropriate mix of talent and services needed from within these two networks, rather than individual agencies. This has proved to be a very effective model; one that has facilitated the development of a strong, effective, and cost-efficient partnership between AstraZeneca and each of the networks. Buzzelli. We do not employ a preferred provider strategy from an advertising agency standpoint. The preferred provider arrangement assumes that everything fits in the same box, and with advertising agencies this is not really the case. Different brands have different needs and different ad agencies have different strengths, so we really have to match those needs to those strengths. By going with one preferred provider, one assumes that an agency has all those strengths all the time and can fit those strengths to any brand and its needs; I have never experienced that to be the case. The pitch process and bringing the agency and its staff in to meet our brand team are the strongest ways to identify the correct agency for different segments of the business. Knocke. I believe that freedom of choice and competition provide better solutions for many of our complex strategic problems. At this level, there can be no limits to searching out the great minds of our industry to bring solutions and ultimately add value to our needs. Snowden-Andrew. There should be some healthy competition between agencies, each vying to outdo the other for the next product assignment. I wouldn’t recommend a different agency for every product; we’d never be able to manage them all. And, having too many advertising agencies risks moving products in such different directions that there is no branding of the company. I think advertising should brand back to the company. There should be one or two elements that always make people say, “Oh, that’s an ad from such and such company.” Products are an extension of a company. PharmaLinx LLC, publisher of the VIEW, welcomes comments about this article. E-mail us at [email protected]. Robert Girondi Senior Director, Agency Network Relations and Media Planning AstraZeneca LP Since January of 2003, all of our creative work, and an increasing amount of our other promotion, has been assigned to — and executed by — cross-functional, custom-designed teams that provide the appropriate mix of talent and services needed from within two networks, rather than individual agencies. Michael Innaurato Group Executive Director Rx Product Management Purdue Pharma L.P. It is really critical that the agency and the client have one view and understand that together we succeed or fail by the growth and profitability of the brand. JR Buzzelli Product Director, Women’s Healthcare Marketing Johnson & Johnson – McNeil-PPC Inc. One of the big trends I have seen, and one that I believe the industry will continue to experience, from a DTC standpoint is more safety warnings. There is no doubt that the level of warnings and the amount of safety information conveyed is going to be not only greater, but much more prominent. Sue Ellen Knutson Director, Consumer Marketing Astellas Pharma U.S. Inc. No agency can do it all well. It’s a good strategy to have diverse points of view. Putting all its business in one place doesn’t ensure that a client will receive good team work or regular communication. Amy Romero VP, Marketing Adolor Corp. As a result of PhRMA and OIG guidelines, there definitely is a more conservative spin from many companies about what types of creative they can go out with and how far they can push the envelope. Michael Sinapi Senior VP, Marketing and Sales Operations Wyeth Pharmaceuticals From an agency management standpoint, there are usually different structures in terms of appropriate account team structures and other commercial considerations that warrant separation of activities to different agencies. Reader Survey: Budget Expectations In the next 12 months do you expect your advertising budget for professional/journal advertising to: Increase by 10% 13% Increase by 20% 8.7% Increase by more than 20% 10.1% Decrease by 10% 5.8% Decrease by 20% 0% Decrease by more than 20% 1.4% Stay the same 42% Not applicable 18.8% In the next 12 months do you expect your advertising budget for direct-to-consumer advertising to: Increase by 10% 21.7% Increase by 20% 4.3% Increase by more than 20% 10.1% Decrease by 10% 1.4% Decrease by 20% 0% Decrease by more than 20% 0% Stay the same 15.9% Not applicable 46.4% In the next 12 months do you expect your advertising budget for Internet promotion to: Increase by 10% 19.1% Increase by 20% 14.7% Increase by more than 20% 11.8% Decrease by 10% 1.5% Decrease by 20% 1.5% Decrease by more than 20% 1.5% Stay the same 22.1% Not applicable 27.9% In the next 12 months do you expect your advertising budget for direct-to-patient promotion to: Increase by 10% 17.4% Increase by 20% 8.7% Increase by more than 20% 7.2% Decrease by 10% 1.4% Decrease by 20% 1.4% Decrease by more than 20% 0% Stay the same 15.9% Not applicable 47.8% In the next 12 months do you expect your advertising budget for direct-mail promotion to: Increase by 10% 14.5% Increase by 20% 7.2% Increase by more than 20% 8.7% Decrease by 10% 2.9% Decrease by 20% 2.9% Decrease by more than 20% 4.3% Stay the same 26.1% Not applicable 33.3% Source: PharmaVOICE, Titusville, N.J. For more information, visit pharmavoice.com. Note: Survey analysis is based on 84 responses from PharmaVOICE readers: company breakdown — 62% pharmaceutical; 10% biotechnology; 8% biopharmaceutical/biology; 7% device, diagnostic, or equipment; 4% service; 2% drug-delivery; 1% generic; and 6% other. The majority of respondents are corporate and marketing managers. Reader Survey: Agency Strategies Does your company use a preferred provider strategy for agency selection? Yes 40.4% No 25% Depends on the project 34.6% Do you use different agencies for different tactics such as professional, DTC, public relations, etc? Yes 78.4% No 21.6% At what stage do you typically hire an agency to begin brand development? Phase I 4.3% Phase II 13% Phase III 63% Phase IV 8.7% Other 10.9% How important is it that an agency has global capabilities? Not important 23.4% Somewhat important 42.6% Important 19.1% Must 14.9% What areas of advertising/promotion do you expect to increase in importance during the next 12 months? Ranked in order of importance; 5 being highest, 1 being lowest 50% 40% 30% 20% 10% 0% Professional Direct to Patient Direct to Consumer Direct Mail Internet How often do you use an independent vs. network agency? 0% to 25% 53.2% 29.8% 25% to 50% 28.9% 25.5% 50% to 75% 8.5% 19.1% 75% to 100% 8.5% 25.5% Independent Network It is a critical relationship, and one in which mutual respect is imperative. Source: PharmaVOICE, Titusville, N.J. For more information, visit pharmavoice.com. Note: Survey analysis is based on 84 responses from PharmaVOICE readers: company breakdown — 62% pharmaceutical; 10% biotechnology; 8% biopharmaceutical/biology; 7% device, diagnostic, or equipment; 4% service; 2% drug-delivery; 1% generic; and 6% other. The majority of respondents are corporate and marketing managers. Dreama Kirby Marketing Manager Blaine Pharmaceuticals So many agencies are consolidating their business or increasing their service offerings, it seems that they are trying to become one-stop shops for any needs a pharma company may have. Dave Knocke Executive Director, International Ovation Pharmaceuticals Inc. For almost any promotional category, whether it’s a journal ad, visual aid or Website, the projects that turn out the best are the ones where the expectations are determined up front, in terms of what the agency is doing, what the client is doing, and that both have identified timelines. Barri Falk VP, Marketing Serono Inc. As the focus on “traditional” pharma marketing to physicians has expanded to direct-to-patient and direct-to-nurse communications, agencies will be required to shift their mindset and thinking. This will challenge agencies to change both their advertising paradigm and their communications style. James Mendenhall Senior Director, Marketing and Sales Administration Astellas Pharma U.S. Inc. The whole state of advertising has changed, it is not like it was five or 10 years ago. Advertising now is much more sophisticated, and much more specific as far as what companies are able to offer to their customers. March 2005 VIEW on Advertising

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