With New Drug Due, Lilly Begins Media Search

Competitive pressure, rather than a search for greater efficiency, may be behind Eli Lilly & Co.’s decision last week to review its media planning and buying business. And that may mean the company will spend considerably more than last year’s $70 million, sources said.

The Indianapolis-based pharmaceutical giant is preparing to launch a new drug next year to compete with Pfizer’s Viagra, while its antidepressant Prozac faces new competition. In its third-quarter earnings report released last week, Lilly disclosed that its earnings fell 27 percent to $570 million, compared with $779 million a year ago.

This past summer, the Food and Drug Administration approved Lilly’s Cialis, a remedy for male impotence. Meanwhile, generic competitors of Prozac began appearing on the market in August.

The request for information sent out last week asks credentials-oriented questions, such as how long the agencies have been in the media business, what percentage is spent buy ing for pharmaceuticals and pricing methods.

Interpublic Group’s DraftWorldwide in New York, the incumbent, is expected to defend. The search in cludes the Chicago offices of Tempus’ CIA Medianetwork and Starcom; Horizon Media and IPG’s Initiative Media North America, both New York; and other, undisclosed shops, sources said.

Lilly spent $85 million from January to July 2001; it spent $70 million in 2000, according to CMR.

“Lilly has had a rough year, but with their challenge to Viagra coming out next year, it’s natural for them to seek a broader range with their media,” said one source.

Responses are due back this week, with presentations to follow in mid-November. Lilly plans to make a selection on Dec. 1, the RFI stated.

Lilly officials declined comment. The shops could not be reached.