Upfront 2003: Health & Beauty

Cross-media deals and product launches continue to drive the health and beauty market, while corporate consolidations continue apace. But the question remains: Will new product lines and Hollywood tie-ins give the segment a boost in the upfront? Trends are pointing to robust business for the nets.

Revlon, following a pact last year that gave the cosmetics giant a prominent role in ABC’s daytime drama All My Children, more recently did joint prime-time promos around 20th Century Fox’s James Bond flick Die Another Day—featuring Revlon pitch girl Halle Berry—as well as the Paramount release How to Lose a Guy in 10 Days. Meanwhile, Procter & Gamble’s Max Factor rode the wave of hype following the Best Picture Oscar for Miramax’s Chicago with a similar tie-in.

Deals like those are only expected to continue—especially with major Hollywood players like Creative Artists Agency getting into the product-promotion game in recent times. CAA has grown to rep not just big stars like Sting but mega corporations like Microsoft.

Meanwhile, a slew of new products and brand-name spin-offs—from a hairspray launch by P&G’s Pantene to a new line of shampoos and conditioners from the venerable skin-care giant Dove, a launch on which parent Unilever spent a reported $100 million—are helping business. Another boon: the tooth-and-nail battle between toothpaste giants from Crest to Colgate in the hotly competitive teeth-whitening market.

Health and beauty names are extending their brands into completely different arenas, meanwhile. P&G’s Cover Girl has licensed its name to contact lens maker Ocular Sciences. And P&G, which last year spent $4.95 billion to acquire Clairol, moved to further dominate the health and beauty market with the purchase of Wella in March. This, as P&G pushes its Oil of Olay spin-off, Regenerist. Church & Dwight, meanwhile, repositioned its Nair depilatory to appeal to a younger customer.

As some brands expand, others are disappearing. P&G just pulled the plug on its Vidal Sassoon hair-care line, which it acquired with the Clairol deal.

The health and beauty upfront is shaping up to be most solid, if recent ad-spending patterns are any indicator. According to Competitive Media Reporting, nine of 10 top spenders in the category spent more on network TV last year than the year before—most by healthy double digits.

P&G, the biggest customer in the field, laid out a whopping $277.7 million last year, versus $179.6 in 2001, a difference of 54.6 percent. Other increased commitments came from Johnson & Johnson, with $147.1, up 32.3 percent; Gillette Co., with $109 million, up 82.3 percent; and Unilever with $104.9 million, up 20.7 percent.

Laggard economic conditions likely won’t have much impact on this category, many say. The health and beauty business, while not exactly “recession-proof,” is less affected by the economy, points out Debbie Millman, president of New York-based marketer Sterling Group, whose clients include Dove, L’Oreal and Revlon. “Despite the economic turbulence, you’ll still see beverage and food launches, shampoo and conditioner launches. You will continue to see relaunches, reintroductions, brand extensions,” Millman predicts.

Another factor likely to drive business: the strong emotional connection and fierce loyalty consumers have to these products—making their messages especially resonate during uncertain economic and geopolitical times like these. “These brands have such a tie to our culture that seeing them actually reinforces positive, American brand values,” Millman says.

Still, others predict sluggish times for the segment, threatening to derail prospects for the upfront. Health and beauty “is not one of the hottest categories in the industry,” maintains Rich Hamilton, CEO of ad research firm Zenith Media, New York, which predicts only low-to-mid single-digit increases in total spending on the category this year.

While P&G continues its acquisition binge—and doubles up its ad buy—that single player “is not big enough to drive the whole market,” Hamilton points out.—

Prime-time Network Spending in 2002: $451.9 million*
Hot Buttons: Tie-ins with films will boost spending. Fierce brand loyalty among consumers help make category less prone to recession.

Category: Health & Beauty
PERIOD: Jan 1, 2002 – Dec 31, 2002

Advertiser: Prime-time Network TV $$$
Procter & Gamble Co.: $428.3 million
Johnson & Johnson: $184.7 million
Gesparal SA: $182.8 million
Unilever: $130.7 million
Gillette Co.: $108.5 million

Top Programs for Health/Beauty Advertising: Expenditures
ER: $25.5 million
Will & Grace: $20.6 million
Friends: $19.8 million
Source: Nielsen Monitor-Plus