Pharmaceutical giant GlaxoSmithKline is re-evaluating its media agency roster, which could lead to a consolidation review, according to sources. The company spends an estimated annual $1 billion on ads globally.
The current U.S. incumbent is PHD, which won the assignment in late 2010 after a review in which the Omnicom shop out-dueled the incumbent MediaCom and contenders Starcom and MPG. According to Kantar, GSK spent more than $522 million on ads in the U.S. in 2011.
MediaCom currently handles GSK assignments outside the U.S. including the UK.
While GSK is exploring its media agency options, sources said the company has not yet called a formal review. Currently, the company is doing what one source termed a “resource check” -- an informal yet detailed examination of the capabilities and resources of its media shops. “It might lead to a consolidation review or might not,” a source familiar with the situation said.
GSK declined to comment specifically on the media shop evaluation that is currently taking place. PHD and MediaCom also declined to comment.
The reevaluation follows the hire last summer of Sameer Singh to the new position of vice president of global media at GSK. Singh, a former media executive with Procter & Gamble, has been tasked with ensuring that GSK is receiving the highest return possible on its media spending around the world. He reports to Jim Martin, GSK procurement vice president.
When PHD was awarded the U.S. business just over two years ago, GSK’s Martin stated: “Throughout the review process, PHD demonstrated impressive creativity and strategic planning savvy, which they paired with a highly competitive cost base.” Martin added, “We were also impressed by their digital media innovations, and we believe they are the best possible partner to lead us into the future.”
The hiring of Singh and the ongoing reevaluation are two more signs of just how quickly change is occurring in the media space. Major clients are determined to stay abreast of those changes to maximize media ROI.