GLOBAL BRIEF: Euro RSCG spots the opportunity in US healthcare - Jordan McGrath is poised to cash in after the rise in DTC ads, Karen Yates says

Apart from creating one of the longest names in history - Jordan McGrath Case & Partners/Euro RSCG - you could be forgiven for wondering just why Euro RSCG made its latest acquisition in the US last week.

Apart from creating one of the longest names in history - Jordan

McGrath Case & Partners/Euro RSCG - you could be forgiven for wondering

just why Euro RSCG made its latest acquisition in the US last week.



The last published results for its new shop, Jordan McGrath Case &

Partners, reveal a mid-sized independent with a solid, rather than a

sparkling performance.



The deal gives Euro its eighth North American agency, and its fourth in

New York. So it wasn’t designed to plug an obvious gap. However, the

acquisition begins to make sense when you run an eye down Jordan’s

client list.



The first thing you notice is Procter & Gamble. P&G is also a Euro RSCG

client, although the world’s largest advertiser is rumoured to prefer

larger bedfellows for its increasingly global stable of brands. Only

last year, Euro RSCG lost a big chunk of business from P&G - Vidal

Sassoon - to other roster agencies. And these big four multinationals,

Saatchi & Saatchi, Grey, DMB&B and Leo Burnett, are circling ever more

energetically for the kill. Could Euro RSCG be trying to buy its way

back into P&G’s good books?



Bob Schmetterer, Euro RSCG’s chief executive, strenuously denies this

was the rationale behind the deal, candidly pointing out that there

would probably be little point: ’It wasn’t that at all. We are clearly

not one of the four big P&G agency groups. P&G is going more and more to

the big boys and will probably continue to align with them. Jordan is

purely domestic.



If I can be really blunt with you, we’ve assumed that P&G is not a

long-term business for us.’



Instead, Schmetterer says Euro RSCG needs to concentrate on building up

bulk to compete generally with the heavyweight networks. And the Jordan

deal, he reckons, would put Euro RSCG in the top ten US agency

brands.



More particularly, Jordan specialises in an area of advertising targeted

by Schmetterer (and most agency bosses) as a key growth area -

healthcare.



All the same, Euro RSCG already has a number of healthcare agencies in

the US, two of them in New York. Surely another would be overkill?

Another glance at the client list shows that Jordan began as a

mainstream agency and only moved into healthcare in recent years. Its

wider experience has helped the agency to cash in on the biggest

healthcare advertising phenomenon of recent years - ’direct to consumer’

advertising, which has seriously boosted billings in recent months.



DTC began in earnest just over a year ago when the US allowed the

advertising of prescription medicines to the public. For the first time,

drugs companies could ply their wares on TV direct to asthma sufferers,

heart attack victims and the like, whom they could previously only reach

through doctors. The result has been a dollars 1.2 billion explosion in

drugs adspend (Campaign, 6 November 1998). And those faring best from

the bonanza are agencies with drugs experience and wider expertise. In

short, agencies like Jordan McGrath.



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