Second agency targets healthcare advertising

By DITA DE BONI

The healthcare division of global advertising agency McCann Erickson will open a second outlet in Auckland in January to help grab a bigger slice of the increasingly lucrative pharmaceutical advertising market.

The agency will be a branch of Torre Lazur, part of the McCann Erickson group. It will target several globally based pharmaceutical clients which at present cannot sign up to McCann Erickson Healthcare for conflict-of-interest reasons.

McCann Erickson's present healthcare division in New Zealand, which caters for most of this country's fledgling direct-to-consumer advertising needs, has billings of up to $7 million annually.

It services clients such as Reckitt Benckiser (which makes Gaviscon, a gastro-intestinal drug), Pharmacia (Depo Provera - a contraceptive), AstraZeneca (Bricanyl - an asthma inhaler) and Aventis (Telfast - hayfever relief).

But for competitive reasons it cannot work in New Zealand for the world's largest pharmaceutical client, the newly merged Glaxo Smith Kline, whose account is worth several million in billings here.

Globally, Torre Lazur counts Glaxo Smith Kline as a client, and the new Auckland agency will hope to garner the business of the international giant when it starts local operations next year, says McCann Healthcare New Zealand director Robert Munro.

But the agency will initially open its doors with no clients.

"It's really a growth strategy. Direct-to-consumer is a growing market and a category with enormous potential."

The Torre Lazur branch will have a separate staff and location, and will also be looking to take the pharmaceutical business of clients now using the mainstream agency (McCann Erickson) for non-healthcare needs.

"Putting aside 'fringe' healthcare, and limiting the category to prescription medications, the New Zealand market is worth between $20 million-$25 million," says Mr Munro. When chemist chains, non-prescribed medications and Government healthcare accounts are included, the market is worth much more.

"It's the fastest-growing category for advertising in the world."

In most other markets, McCann Erickson operates duel agencies. Worldwide, McCann Erickson Healthcare, including Torre Lazur, fetches more than $1 billion in billings from prescription-drug advertising each year.

Mr Munro says he is not concerned about the Government's promise to revisit the issue of direct-to-consumer advertising.

Joe Torre, co-founder of Torre Lazur and chief executive of McCann Erickson Healthcare Worldwide, visited New Zealand in February this year. He said at the time that New Zealand pharmaceutical advertising was "creatively excellent" but not as balanced as the US industry's work in terms of alerting consumers to potential side-effects of certain drugs.

New Zealand is the only country outside the US to allow direct-to-consumer prescription advertising.