Dudnyk's goodheart welcomes the effects of mergers

MM&M:

One of your peers, in a recent interview in this series, identified the shrinking number of clients due to industry consolidation as a major issue facing healthcare advertising agencies. Conceivably, the merger wave could be increasing competitive pressure on agencies. What is your view?

Goodheart There can be no doubt that there are fewer clients; however, that is not necessarily bad for agencies. For one thing, the enormous amount of consolidation among healthcare companies has resulted in the downsizing of marketing departments, and at least some companies are turning more frequently to agencies for work that previously would have been done in-house.

Secondly, the fact that there are fewer clients doesn't mean that there are fewer product assignments. In fact, the opposite is true: that more products are being promoted. Overall, therefore, I think the merger trend has been beneficial to medical marketing agencies - at least that's been our experience.

MM&M.: Do you feel your agency has been singled out?

Goodheart: We were fortunate because so many of the merged companies are moving their headquarters into the pharmaceutical belt within 50 miles or so of Philadelphia. Pharmacia & Upjohn is one example; the Glaxo SmithKline Beecham combination is another; Aventis is a third. It so happens that we're right in the heart of that belt, and a lot of times these companies look for an agency within their area - not always, of course, but often enough to make it a very nice thing for us.

MM&M: You just happened to be there? You didn't purposely move?

Goodheart: No, we've always been here. We're about an hours drive from Philadelphia, an hour from Princeton, and an hour from Somerville, N.J., so we're really in the heart of things. That helps us in another way. Consolidation has led to a considerable pool of product managers looking for new positions, so it makes recruiting easier for us. Also, our location helps us when people need to relocate. This is a good place to live.

But above all, as I said before, when two companies merge it doesn't always reduce the number of products they are actively promoting, so the marketplace for agencies doesn't necessarily shrink.

MM&M: I had understood that the merged companies often wanted to cut down the number of agencies on their roster.

Goodheart: That may be true, but it does not change the fact that they will still be looking for agencies that can provide them with the strongest strategic and creative input.

MM&M: So you feel you've actually benefited from the downsizing.

Goodheart: Absolutely.

Agencies as a strategic resource

MM&M: Another comment I have heard recently is that because of their size, merged companies are more than ever looking to their agencies for strategic thinking as well as creative solutions, and some agencies have restructured to meet that challenge. Have you changed the way you're organized? For instance, have you added brand coordinators or strategists to your staff?

Goodheart: No, we still depend on our account management people to provide strategic thinking. The premise, of course, is that you have account people with deep and diverse experience. We don't have a separate division or designated strategic planners. We try to make sure that there's very strong strategic management on each of our accounts.

MM&M: I understand that, like so many medical agencies these days, you handle consumer promotion, as well as prescription and over-the-counter products. Does the variety of assignments you handle make a difference in the way you staff your account groups?

Goodheart: Since the goal is always to provide strong strategic thinking and strong creative to each business we work on, it really makes no difference whether the client is marketing prescription pharmaceuticals or biotech products or devices, and whether they are promoting them to physicians or to patients.

MM&M: What about the nature of the agency-client relationship? If you didn't know what products they were working on, could you tell the difference between the account groups in the way they interact with the client? Goodheart: Not really, and I don't see any need to work any differently with a client, whether they're an Rx, an OTC, or a medical device company.

MM&M.- But suppose a team has been working solely on prescription drugs and now they're given a DTC assignment. Would the same account group handle both?

Goodheart: What we would do is draw on people with the necessary strategic or creative experience. And, of course, we might hire new people with those skills. But fundamentally I believe that if an agency can do good work in one healthcare area it can do good work in any related area.

Breathing new life into mature products

MM&M.: You said earlier that mergers might actually lead to more products being promoted. Isn't there a tendency especially for the giant companies, to stop backing all but their blockbuster products?

Goodheart That certainly does happen, but what we're also seeing is that companies that have strong older products look For ways to revitalize them, even as everyone else is concentrating on potential new blockbusters. For example, we handle Percocet, and that's a really mature product. MM&M: You see that as an industry-wide trend and not an exception?

Goodheart: Based on our experience, I'd say it's not at all uncommon. For instance, we worked on a major relaunch of Trental, the Aventis product for intermittent claudication, when it was being marketed for Hoechst Marion Roussel. Trental was in the late stages of its life cycle, and a major revitalization campaign succeeded in increasing its market share. Still another example of a relaunch is Altace, when new data was developed for that ACE inhibitor. Altace was also an HMR product and is now being marketed by Monarch Pharmaceutical. Which brings up another point: as merged companies shed some of their older products, they are often taken over by niche companies, which successfully revitalize or reposition them. Kurt Landgraf, CEO of DuPont Pharmaceuticals, recently announced that his company expects to grow by acquiring products being shed by merging companies. He said, "We believe that with many of these mega-mergers that are occurring with the consolidation of the pharmaceutical industry, there will be many very, very good assets that will come on the market."

Agencies as clients

MM&M: Switching topics once again, let's talk about self-promotion by healthcare agencies. You have been running quite a striking series of house ads. How do agencies know whether such campaigns are working? Is it possible to assess return on investment, for instance?

Goodheart: We've done anecdotal ROI work on those ads and they have received very positive responses from product management. We have also found when we talk to our clients or prospective clients that they have these ads hanging on their walls. They tell us that these ads speak to the challenges they face. From our point of view, of course, we like to think that the ads prove that we understand their market and also show our ability to provide strong, breakthrough creative.

MM&M: Have you done readership testing?

Goodheart: Yes, we've done readership testing with product managers to make sure our message is hitting home.

MM&M: Finally a personal question. I wouldnt ask this ifyou had not made reference in the background material you sent me to the fact that you're balancing being the mother of two kids with a very demanding executive position. Do you have any comments jor other mothers in the business who might want to know how you do that? What's your secret?

Goodheart: No sleep! But let me first respond to a question that, while you didn't ask it, often comes up, and that is what it's like to be a woman in our business. I guess I've been very lucky, but I have never encountered any kind of gender issues. As for how I handle being a working mother, I'm a working parent like any other working parent, making a special effort to balance work life and family life. It isn't always easy, but it can be done.

MM&M. You get home in time to see your kids? Goodheart. I work really hard to do that. It helps that I live only 20 minutes away. Another plus of not being in a big city! I used to work in Manhattan so I know what that kind of commuting is like. It also helps that I enjoy both my family and my work, and I find being in this industry very challenging, very rewarding. I should add that I have help at home, as well as a very supportive husband. Also, my kids are understanding, especially when I have to travel.

MM&M. I'll interview them next.

Goodheart: They're very articulate.

MM&M: suppose they take after their mother Which leads me to ask my closing question: your agency has had a very successful year (see Agency Profile, above). What do you feel is the single most important factor in contributing to the success ofan agency in our field?

Goodheart: I think probably the most important factor in our success, at least, is the passion that people here bring to their work. We try very hard to create an open environment, to promote a free exchange of ideas and to encourage creative thinking. You asked before about balancing business with life at home. We're very mindful of the employer's responsibility to make it possible for the entire staff to be able to do that. If people can successfully balance their work life and their home life, it not only makes for an attractive place to work, but it lets people do the best work that they can.

MM&M: Dudnyk is still an independent ageng isn't it?

Goodheart: Yes, and there are not many left.

MM&M: Do YOU think the trend toward acquisition ofmedical agencies by major holding companies is having an ect on the work being done in our field? Obviously the agencies that are part of agency networks stress the advantages they gain from these relationships, particularly the resources they are able to tap into.

Goodheart: I think that being independent has some strong benefits. Having worked in both settings, I feel that there's an advantage, for instance, in not having to worry about bottom line pressure from above, I realize that all agencies can do good work, but financial pressure from the parent can be inhibiting, and I honestly think that we're seeing more creative work coming from independent agencies.

MM&M. Thats not to say that independent agencies don't also have to worry about the bottom line.

Goodheart. Naturally, but they don't have to worry to the same extent about every quarterly or even monthly accounting. In any case, our feeling has always been that if an agency delivers really good work, the profits will follow.

MM&M: Thats a hopeful message for all agencies, regardless of size and affiliate status, so lets close our discussion on that note. Thank you so much for sharing your thoughts and insights. It's been a pleasure talking to you.