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On to pastures new

As marketing teams shrink, brand managers are left with less time to pick their way through the maze of service sector specialists. Should they simply hedge their bets and opt for a multimedia agency?

How would you define the phrase, 'joined up thinking'? Is it simply a hollow but handy business buzzword of our time, or a tidy idiomatic holdall implying that there is something bigger than all of us - in so much as what we do at work every day as individuals is fine, but with some `joined up thinking' the broader view of what we could achieve comes forth, and upturns the business buzzword bag entirely.

Words and phrases like 'inherent synergies', 'integrated offerings', 'spectrum of learnings', 'enhanced capabilities' and 'shared alignment' come tumbling out onto the table, but we're left scratching our heads, wondering how they all fit together. We know they tessellate to produce something valuable and advantageous in marketing terms. The question is, how should they all join up in order to form the best end product?

Assembling offerings in this way, bundling all of these components together and delivering them in the right fashion, is a key challenge for the pharmaceutical marketing services industry. Agencies are adapting to cater for the development that, because of multiple economic pressures on the drug industry and the effects of consolidation and regulation, many pharma marketing departments have had to slim down.

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However, efforts to remodel, in order to better meet the needs and demands of today's medicines marketers, is polarising opinion on the best format for suppliers of the key services, chiefly advertising, public relations and medical education.

Pharmaceutical brand managers have become busier, as internal barriers between departments and divisions have been broken down, leaving them with less time to organise the marketing across their patch. In this respect, offers of totally integrated marketing from `do-all' agencies, providing perfectly co-ordinated multi-channel messaging, are starting to look especially attractive.

This is the arrangement whereby you ask one company for any or all marketing services, and that's what you get. All disciplines, all activities and all sorted underneath the same roof, in the metaphorical sense. Relax and watch it all happen concurrently and efficiently.

There are discounts of scale, synchronisation in timing, unequivocal interpretation of the brief across disciplines and, with a single company taking care of all parts of the marketing campaign, the brand manager is freed up to focus on one, or some, of the many extra demands now made upon their time.

But - and it's a big but - there is a school of thought that says don't put all your eggs in one basket. It's better to hedge your bets and pick the top four horses tipped to win the Grand National, than blow the contents of your wallet on one single horse, no matter how fine a thoroughbred he is.

This second process requires more time and effort in researching your prospective choices but, in theory anyway, you could end up with the best suited to any conditions (ie, the finest advertisers, the most cost-effective PR practitioners and the most credible and judicious med ed writers/providers). While many service agencies may feel that they employ the gold dust of marketing people within their walls, the notion that the crÈme de la crÈme could be employed simultaneously at one company is as likely to occur in reality as Jade Goody winning the Nobel Peace Prize.

By making distinct choices, cherry-picking can be more fruitful in terms of the final and overall quality of work. However, the way ahead through this multiple-company approach, which is how large parts of the industry have evolved, has not always been straightforward and problems inherent only in this system naturally arise.

Some individual providers are also now joining together - though they keep their creative independence - by becoming part of larger holding companies. Such overarching groups comprise all the individual marketing elements, though each provider is run as its own entity. Ad agencies drop anchor next to PR firms, while med ed and online direct marketing specialists, for example, are also moored to the same jetty, all operating fairly autonomously (or together if they choose to) but within the same harbour.

This way, the associates believe, the benefits of the interlinking effect between disciplines are present, but each individual affiliate still wins business on the same basis that made it successful in the first instance; as a proven specialist.

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Together-together
The two models both aim to provide bespoke, efficient marketing services for troubled brand managers. So which is it to be, and why are some companies adhering to these formats? It's tempting to say these matters go in cycles. The marcomms industry is still fragmented and highly suitable for consolidation, and there is a rising tide of M&A reflected in that, notes Graham Beckett, author of a book on the topic and CEO of Results International, a consultancy focused on growth and mergers/acquisitions in advertising and marketing communications.

The main reason this has started to change in the last year or so is that promises are now coming of age which were made in the 1990s, during which time clients were perceived to be increasingly interested in core campaigns becoming globalised and integrated across the disciplines.

This is now becoming more of a reality. Reductions in client marketing departments are leading to more outsourcing of services and the effect of consolidation and regulation has broken down some of the clients' own internal turf, between geographic regions and service divisions, making more integrated agency offers seriously attractive for brand managers. That said, the offer has to be good and has to deliver, so management at consolidator agency networks is currently occupied with securing high-quality skills sets in each of the key disciplines, and then trying to find a structure that actually works to the clients' benefit.

Huntsworth Health is a prime example of this set up, whereby several specialist agencies in PR, advertising, medical education and research have been amalgamated to serve under the same roof, as part of the same company. This has created, Huntsworth says, the UK's `first totally integrated healthcare marketing offering'.

Marketing communication tends to involve the delivery of clear, single-minded messages to a variety of customers, using a variety of channels. All too often the job of ensuring that all the different channels are co-ordinated in time and on message falls to the brand manager. Our model takes this pressure away, giving the brand manager reassurance that the marketing campaign will be strategically strong and implemented with skill and precision, says Huntsworth's marketing director, Bruce Ritchie.

If the individual marketing elements are kept apart, communication is hindered, brand managers get conflicting and biased advice, and they pay more for the overheads and access to the senior people from each agency, while losing out on volume discounts. More of their time is spent briefing all of the separate people, and then re-briefing them all every time something changes, he adds.

Ritchie also believes that, under this arrangement, the strategic advice given to brand managers may come from an expert practitioner in one discipline, but who has a weaker understanding of other areas - plus an inevitable financial bias in favour of their own company's offering. Huntsworth, he enthuses, removes all of these issues. Yet, what about the concern that entrusting all of your marketing projects to a single company may bring its own risks, and even potentially rule out finding the personnel best suited for any particular project?

It's true that brand managers can be nervous about putting all their eggs in one basket, but when the alternative is to choose a model which has problems built in from the outset, suddenly this doesn't seem so important. All of our senior team have worked in brand management at some point and have experienced the limitations of the multiple agency route.

The firm ran focus groups in 2004, which revealed that not only did many clients report experiencing frustrations with the multiple agency model, but companies were openly asking for more 'joined up' implementation. All we had to do was make sure that the model worked, Ritchie notes.

Whether the model will bear fruit for Huntsworth is a space worth watching. Graham Beckett at Results International acknowledges the challenge: Integrated `all-under-one-roof' agencies are very hard to pull off on a sustainable basis, particularly when any scale is achieved.

Another example of this model is the acquisition of LeapFrog Medical Communications by Adventis Group, in a move to create an offering comprising 'a complete range' of integrated marketing services, it says. The deal was worth around £2.56m. We are very much aware that our clients required a blended offering for optimum reach of their target markets, Charles Phillpot, CEO of Adventis comments. The group has previously acquired Affiniti and Roundhouse.

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Together but separate
However, there is, to borrow an aphorism from a high street bank, another way. A strategy to build a diversified marketing services group, such as that implemented by Creston (which owns PAN and Red Door Communications among others), also seeks to benefit from the synergies created through the assimilation of providers across the disciplines. Yet, its multifaceted approach still leaves its constituent players to act alone.

It's rather as if all the ingredients are in the bowl, but they haven't been whisked up and blended into one, as is the case at Huntsworth. Alternatively, you might express the key difference between the two models as Huntsworth's swords being arranged in a circle, each pointing inwards to the same place, as at King Arthur's round table, and joined at their tips, whereas at Creston the blades are all lined up in a straight holding rack; together but separate, rather than bound as one entity.

I think it's the ideal situation, says Ben Davies, managing director of PAN, which was bought by Creston for a maximum consideration of £18.8m in December 2006, in a deal executed by Results International.

I've seen the total integrated offering done in the past and, on that occasion, it didn't really work. There's a real danger of being seen as a jack of all trades... he says, pausing and thereby prompting the ensuing and master of none? to be filled in for him by the interviewer. What we have is the best of both worlds: clients I've spoken to want the `best of each' discipline, such as PR, advertising, direct marketing, etc, and the Huntsworth model goes against that.

He points out that there continues to be synergistic benefits elicited by premium providers of marketing services operating closely, and on the right occasions also together as partners. However, he adds that without blurring the offering or diluting the essence of what has made each individual member successful in its own right, there are now some key enhancements, and certainly for PAN, in being part of a bigger group.

Some of these benefits come in having bespoke human resources departments, or IT experts on hand, though Davies and PAN now have experts on hand to look at the digital future of some key parts of marketing.

The way people are using the internet to gain information and communicate means that marketing, media and technology are converging, creating disruption to traditional forms of communication. For some, this is threatening; for others it's an opportunity. Pharma will need to embrace interactive communications and understand the impact of the data created by this, and how its analysis can focus marketing in a much more targeted way, comments Beckett.

Davies believes the Creston 'diversified' model offers the pharma industry the best of both worlds; choice, as well as specific synergistic benefits.

Horses for courses
Huntsworth Health's Ritchie, however, is of the firm opinion that the agency's fully integrated model puts it in the best position to maximise on this convergence of disciplines and cooperation among marketing arms.

There's never been any real benefit in keeping communications disciplines apart from each other - they've simply been that way because that's how they evolved. But ideas evolve. The focus groups we ran provided us with insights to avoid the pitfalls in creating an integrated service and helped us to develop the current model we offer, which we believe overcomes the problem areas. This means clients get what they told us they want, which is unbiased strategic advice and joined up, time efficient, cost-effective implementation.

Of course, the marketing services industry is bigger and broader than just these two models, though it's apparent - through the certainty with which each advocate asserts their views - that the changing shape of the industry reflects the magnitude of emerging trends in pharma, towards smaller marketing teams whose programmes require a greater degree of convergence, yet with no loss of quality or bespoke service.

The author
Rob Skelding is a freelance pharmaceutical and healthcare journalist

13th March 2007

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