Agency Consolidation: Is Bigger Always Better?

From Steve Dubansky, MD, SVP, Medical Director, Palio

Let’s say you’re an oncologist with 25 years of experience in patient care, research, and teaching. You’re now working in a medium-sized pharmaceutical ad agency, and you’re the medical strategist and writer responsible for a small molecule tyrosine kinase inhibitor called pinkiemib, the first successful biologic therapy for cancer of the fifth finger. NouveauRx Pharmaceuticals, the originator and promoter of pinkiemib, is excited with the possibility that this will be their much needed blockbuster product, and you and your team are excited to help them promote it.

You’ve been working closely with the pinkiemib brand team for almost 2 years. You’ve recently developed a series of advertorials, and you’ve written content for its disease state awareness Web site. Concepts have been developed and testing is well underway. The client likes you and your agency team, and the feeling is mutual. The product is set to launch in 6 months. All’s right with the world.

This idyllic picture is suddenly and unpredictably shattered when your agency is told by NouveauRx that they have decided to consolidate their entire $175 million dollar advertising business with the McPharmold Group, an agency holding conglomerate with offices just about everywhere. Nouveau is looking for consistency and cost efficiencies. Their executives feel that they’re not getting back enough in return for their marketing dollars. More worrisome, their marketing dollars are not nearly as effective as their major competitors’.

So you and your agency are out the proverbial door, kicked to the proverbial curb, to the dismay of your now good friends on the pinkiemib brand team. You’ve lost out to a bigger company with multiple subsidiary agencies. Bad for you but good for NouveauRx. Or is it?

While there are undoubtedly reasons to trim the fat, cut costs and consolidate, the old adage, “penny wise pound foolish,” comes to mind. Certainly Nouveau’s costs may be lower with their new agency than they were with yours, but will that translate into improved pinkiemib sales? However, promises of access to the “best talent” and providing economies of scale are often mutually exclusive. Oftentimes neither promise is kept.

Will this new conglomerate have an agency with a team so smart that they can handle the now incredibly steep learning curve that’s staring them in the face?

Will this new agency have someone with the scientific acumen that you and your agency team has in this specialty area… yours gleaned over 25 years, and your colleagues’ gleaned with your guidance over the past 2 years?

Will the new agency have experienced account personnel with the time and the insights to handle pinkiemib on a day-to-day basis, or will Nouveau’s baby be left to bright (hopefully) but inexperienced and perhaps over-their-heads junior account people?

Will McPharmold’s agency have the same quality of creative people, steeped in learnings from first-hand observation of qual and quant research like your creative team? Will they even have brand planners, and, if they do, will their planners have the same depth of understanding of the 5^th finger cancer marketplace, as does your agency? Can the new agency provide invaluable support with research and analytics?

Will the new team have the passion? Will they develop that never-to-be-underestimated great working relationship with the pinkiemib brand team?

There’s more to life and business than consistency and efficiency. I believe they’re both overrated. I agree with Aldous Huxley, the British writer and humanist, who said both, “Consistency is the last refuge of the unimaginative,” and “The worst enemy of life, freedom and the common decencies is total anarchy; their second worst enemy is total efficiency.”

Could Bayer, Sanofi, GlaxxoSmithKline, and Johnson & Johnson be wrong? Possibly. They all have been wrong before. But then again, what do I know. I’m just an oncologist with 25 years of experience.