Healthcare ad firm squeezed off market

By DITA DE BONI

The establishment of a second local healthcare advertising agency by McCann-Erickson has effectively spelled the end for a major competitor.

This week, Young & Rubicam chiefs said the New Zealand operation of its healthcare advertising agency, Sudler & Hennessey, would close.

The establishment of a local division of Torre Lazur by McCann-Erickson, which will scoop up healthcare clients not at present held by sister agency McCann Healthcare, will be headed by James White, the former general manager of Sudler & Hennessey.

Young & Rubicam is one of New Zealand's largest advertising agency networks, with $90 million in annual billings.

Its New Zealand managing director, Peter Scutts, said the move to close Sudler & Hennessey was in the offing after an extensive review of the business. This had been hastened by the loss of Mr White to Torre Lazur.

The Sudler & Hennessey staff of five may be absorbed into the mainstream agency, he said.

The agency's work, including the account for Merck Sharp & Dohme's "super aspirin" pain reliever known as Vioxx, would go elsewhere.

Mr Scutts said it would be difficult for others to compete in the healthcare advertising market against the dual McCann businesses.

"Basically, healthcare is a low-growth category, and at Y&R we are having enormous success in building our mainstream business."

But he said Young & Rubicam was the fastest-growing agency in New Zealand and "we want to maintain and develop that momentum and be absolutely certain that we're doing the best for our clients."

The Young & Rubicam/Goldsack Harris partnership holds accounts for the Woolworths Group, Pacific Retail, Colgate Palmolive and the National Bank.