GlaxoSmithKline is preparing to put all its eggs in into one billion-dollar basket, announcing that it will consolidate its North American buying and planning accounts with WPP Group's MediaCom.
MediaCom currently handles half of GSK's planning and most of its buying. The rest of the drugmaker's planning is handled by various other agencies including MGP, Campbell Mithun, and OMD.
"I think it makes eminent sense to consolidate media buying into one organization, because you get the best deals," said Sander Flaum, CEO of consultancy agency Flaum Partners. "The more minutes and time you are able to sell, the better rates you are going to get. Now GSK will have to pay only one firm for buying and planning rather than paying six companies. GSK has not only the pharma products but also a large OTC product line, so this is for the whole thing."
A looming question, is what will become of Eli Lilly, a GSK competitor that also has a sizeable number of accounts with MediaCom. According to AdWeek, sources say that Lilly is shopping for another WPP-owned media company.
Changes go into effect Q2 2008.