Joint Effort Will Help Companies Compete in DTC Category
LOS ANGELES–CIA Medianetwork and The Quantum Group, the consumer arm of healthcare marketing company CommonHealth, have joined forces in a “strategic alliance” to compete in the direct-to-consumer (DTC) category.
The alliance gives CIA an entry in the category and the addition of Quantum’s estimated $150 million in media billings to its current U.S. total of $600 million.
For its part, Quantum gets a mainstream media-agency partner to help it compete against a challenge from traditional shops in the DTC space.
In October 1997, the Federal Trade Commission revised its guidelines for broadcast drug advertising, opening a floodgate of media spending by pharmaceutical companies and sparking an influx of traditional agencies into the category. DTC advertisers spent $1.8 billion in 1999, according to Competitive Media Reporting.
“Two years ago, a typical pitch would include us, three other healthcare agencies and maybe one consumer agency,” said Matt Geigerich, Quantum president. “Today, it’s us competing against Madison Avenue agencies.”
CommonHealth is a WPP company and CIA is partly owned by WPP, but both sides said the link was a bonus, not a catalyst, for the deal. (WPP’s media arm, MindShare, could not be considered an ally because of conflicts.)
“The fact that WPP partly owned them was actually a surprise to some of us,” said Geigerich. “We went out on a mission to find a media partner that had a level of expertise and understanding of our business … Unlike a lot of other people we talked to, CIA has a real appreciation of the differences between drug marketing and other categories.”
Tom Sassos, CIA’s CEO, said of DTC advertising, “There’s a patent period. At the end of seven years, you have no brand; there’s a gatekeeper. “You have to get people to go to a doctor for a prescription; and there’s an element of compliance with government requirements … DTC media is a specialty.”
Quantum Group handles clients such as Schering-Plough, Mead Johnson & Co. and SmithKline Beecham, among others.
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