Friday, February 19, 2010

New Merck's Media Spend: $600 Million A Year -- Wow.

That's about $1.64 million per day, every day of the year. That's also about $1,100 a minute, for every minute of every hour, of each of those days. Wow. AdWeek tells us that the $600 million per year New Merck ad budget is the subject of a multi-agency "bake-off" -- to determine which firm(s) will win the ad work, post the Schering-Plough bust-up transaction's closing, thus:

. . . .Pharmaceutical giant Merck & Co. has called a consolidation media review after completing its merger with Schering-Plough, according to sources.

Combined estimated U.S. ad spending on the account is close to $600 million. Merck spent close to $520 million from January through November 2009 on measured media, while Schering-Plough spent $55 million during the same period, according to Nielsen. Those figures do not include digital spending by the firms.

Incumbents on the Merck business include Interpublic's Draftfcb and Initiative, which are participating in the review, per sources. Draftfcb handles planning and some buying, including digital and print. Initiative handles TV buying.

One incumbent on Schering-Plough is Havas' MPG, which is also said to be pitching. . . .

Wow. That's a lot -- more than half a billion dollars, to be spent on pitching products doctors are supposed to want to prescribe independently, as live-saving medicines, on their own merit -- without need of patients asking after them, and driving pull-through.

I do understand that some of this is for institutional ad spending -- but really, $600 million? Wouldn't R&D be a more fruitful vineyard for such expenditures (except maybe $10 million of it, allocated to institutional advertising)?


Anonymous said...

That is really amazing. As you say WOW! I am astonished to hear of this whole idea of peddling Medicines. We are not talking about cars, fridges, iPOds... We are talking about things that require rigours education to determine their impact on the human condition.

Pharma Conduct Guy said...

In the two minutes required for me to post this comment, Merck spent $2,283.11 on advertising. Damn!

Anonymous said...

Now that the Supreme Court has opened the door: does that amount of money include the funds that will now go to political action committees?

Condor said...

Anon. No. 3 -- Not at all.

The $600 million figure quoted by AdWeek is simply New Merck's annual spend on direct media -- advertising, of most sorts (but not digital spending) -- and does not include any political action committee monies, at all.

Just FYI. Great question -- as a lot more money flows through that channel, as well -- to advertise in favor of politicians who will do pharma's bidding.