Glaxo SmithKline is overhauling its global roster of creative
agencies for its consumer healthcare business and is planning to
introduce new contracts rewarding agencies on a performance-related
The healthcare giant will ask agencies from its existing roster to pitch
across its business and will put new standard service-level agreements
in place with the winning agencies.
The brands included in the review in the UK, which are currently split
between Grey, Ogilvy & Mather and McCann-Erickson, will be Ribena,
Lucozade, Horlicks, Aquafresh Beechams, Mac- leans and Niquitin.
Neil McCrae, the director of communications for GSK consumer healthcare,
Europe, said: "We are carrying out a global creative review of our
advertising agencies for our consumer healthcare business. We are
seeking to introduce new standard service- level agreements for creative
advertising agencies and have therefore given formal notice on existing
"The new service-level agreements will be applied to all of our agencies
and will be designed in part to reward results and quality of service.
We believe this move to a results-orientated approach, which is in line
with industry trends, will benefit both our consumer healthcare business
and our agencies in the long term."
The winning agencies will be put in place no later than January next
year and only incumbent agencies will be invited to pitch.
GSK's roster of agencies on its consumer healthcare business also
includes Dentsu, Grey Worldwide, Jordan McGrath, J. Walter Thompson,
McCann-Erickson, Ogilvy & Mather, Publicis and a number of smaller
The pitch will be handled by GSK's International division. McCrae said
it was too early to say whether the company was looking to whittle down
its roster of agencies or how many incumbents will be asked to pitch for
GSK's decision to review its consumer healthcare business follows its
move in the spring to look at its roster of agencies on its US
prescription drugs accounts as GSK began to examine ways of achieving
cost savings following the merger of Glaxo-Wellcome with SmithKline
Beecham last year.
Last September GSK appointed M&C Saatchi to work on its pounds 20
million corporate branding campaign for the newly merged entity
following a head-to-head pitch against O&M.
Rewarding agencies on a results basis echoes Procter & Gamble's bold
move two years ago to move from a commission-based system for agencies
to a system linking agency pay to the sales of its brands.
GSK media review, p5.