Midsize Agencies Keep Eye On Conglomerate Castoffs

When Procter & Gamble sold Sunny Delight to private investment company J.W. Childs Associates earlier this month, executives on both sides praised the deal as a boon for the brand and its former parent. Executives at some midsize agencies, however, might want to check it out as a possible new-business opportunity.

Though marketing plans for the newly created Sunny Delight Beverage Co. in Cincinnati have not been decided (and executives at Sunny D shop Saatchi & Saatchi in New York hope to keep the business), the juice drink now falls into the category that marketers call “orphan brands.” Having once been stalwarts at global agencies, some of these brands in recent years have begun to find new homes at midsize independents.

For example, Church & Dwight bought Mentadent and Close-Up from Unilever in September and subsequently tapped Cincinnati’s Barefoot Advertising in January to handle creative. In 2001, Prestige Brands awarded its portfolio, including Comet, Chloraseptic and Prell, to Ten United in Columbus, Ohio.

Often sold either because of a shift in corporate strategy or a focus on a more profitable sister, orphan brands have typically been undermarketed and allowed to languish before being cast off by their parents.

Rejuvenating these brands may require extra attention and highly targeted marketing, with the agencies keeping in mind the brands’ histories and awareness. “We know we need to jump-start the brands because they’ve fallen off people’s radar screens,” said Brad Casper, CEO of Church & Dwight. “But we’re not going to put them back on everyone’s radar screens.”

With brand cache—but little cash—orphan brands’ new owners are finding there are advantages to being a big player at a smaller agency. “[The big agencies] can’t put the manpower, brainpower or the focus behind [orphan brands], because we’re not as important to them,” said Elise Donahue, former president of Prestige Brands, who left the company after its sale to GTCR Golder Rauner earlier this year.

“These brands do not need a lower level of expertise than their competitors,” said Rick Milenthal, chairman of Ten United. “We’re able to bring senior leadership to their family of brands.”

With projects that can involve everything from package design to line extensions, an agency’s work can involve all aspects of the brand’s re-emerging personality, said Doug Worple, president and ecd at Barefoot. “The smaller brands have more license to get closer to a target audience,” he said. “With the communication and the way we reach those folks, we can be smarter and more efficient. … It’s definitely an opportunity to show that [selling the brand] was a mistake and to show there was equity there.”

Close-Up has already begun marketing to a younger demographic with a guerrilla presence at spring-break events earlier this year. A more concerted effort is expected to begin this summer, Worple said.

Even under a new parent, however, orphan brands rarely get the kind of spending enjoyed by their conglomerate-owned competitors. Prell, for example, only saw spending of $52,000 last year, according to TNS Media Intelligence/CMR. (By comparison, P&G’s Pantene—which appears to be the category leader—spent $65 million on ads last year, according to TNS/CMR.)

“We know we’re not the biggest advertiser in any of the categories we compete in,” said Casper. “We were looking for a smaller agency who would view this as a big opportunity to make a name for themselves.”

Working on discarded brands is not without its pitfalls. Without the millions of dollars in marketing support offered by the big conglomerates, its unlikely any of the orphan brands will reach the top of its category in the general consumer market.

“The reason that a lot of these brands wound up as orphans is because they had lost relevance,” said Michael Dunn, CEO of brand and marketing consultancy Prophet in Chicago. “The challenge … is if there’s something interesting that you can actually rebuild a following around.”

Ultimately, with less distribution muscle and money behind them than their corporate-owned cousins, orphan brands will be fighting an uphill battle for shelf and mind space. And without the deep pockets of a global parent, there is little room for experimentation.

“You don’t have a lot of ancillary brands that can make up for your core brands. ” said Donahue. “We can’t afford any mistakes, because there isn’t any leeway.”