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Euro'vision blog

A look at the key issues for pharma across Europe

Life’s a Pitch!!

Our Spanish agency made 70 face-to-face pitches last year. So, are economical constraints pushing pharma marketers and their procurement colleagues to adopt an approach to tendering work that’s counterproductive?

One of the key themes across Europe for 2011 (and indeed for the whole pharma world) that will undoubtedly carry across into 2012 is the need for pharma companies to save money and protect their profit margins. Given patent situations, lack of blockbuster new approvals, increasing pressure on drug costs etc, this is very understandable. However, in some cases, the methods being used to get these cost savings may themselves be counter-productive.

A good example of this is the increasing propensity to want to pitch smaller and smaller projects – especially at the local level. While companies at the global and regional level are increasingly seeing the value both for consistency, quality and cost-effectiveness of consolidating large chunks of work with a limited number of agency groups – at a local level the opposite is often happening. If I look at my own company's Spanish agency, which is small by other European country standards, we were involved in almost 70 face-to-face pitches in 2011. The vast majority of these were for small, discrete projects.

Now, of course you could argue that competition is good for the market, allowing the client to get the best ideas at the best price, but just look at the hidden costs of this approach… How much of the local marketing and procurement teams' time was taken up with preparing, organizing and running these pitches? To my knowledge this is not a cost that is generally captured by any company – but the internal staff cost must be significant.

How efficient is it to keep changing agency from project to project: in terms of the time taken for both teams to understand how to work efficiently with each other and for the agency team to come up to speed on the product. Again this lost time is generally never captured, but it must delay materials and again add to the time burden of internal, already overstretched, staff.

Finally of course there is the cost to the agency itself of preparing for and participating in this number of pitches – with possibly a number of additional staff needed and certainly an extent of out-of-pocket expenses, etc. Of necessity, in some shape and form, this cost has to be passed on at some point.

There is no doubt that 2012 is going to be an uncertain year, and it might seem prudent to respond to this uncertainty by not committing beyond small projects to any single supplier. But the truth is that this approach probably decreases the very efficiency that the industry desperately needs at this critical time. So maybe its time to take a long hard look at exactly what this approach is achieving – and whether it is truly time to ditch the pitch itch…

Article by
Max Jackson

Max Jackson is CEO, EMEA & APAC, Sudler & Hennessey and former chair EACA Healthcare Communications Council

19th January 2012

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