July 17th, 2007

The Envelope, Please

welcomnewcom.jpgAfter four months and hundreds of hours of work, Kim Kadlec and her team in the Johnson & Johnson Global Marketing Group at last completed their global review of media planning and buying activities — resulting in a flurry of coverage in the MSM and trade press.

Whew… I’m really glad this is all over with. While this review was going on, there was a lot of speculation in the press about who was going to be selected — some of which wasn’t quite right. For the past couple of weeks, a day hasn’t gone by when I haven’t had a call or two asking if we had made a decision, or whether I could confirm which agency was in and which was out.

So why do this?

For starters, there is a lot of money to be saved by leveraging scale throughout the world. Just as important, however, is the need to put a new model in place.

In the past few years the media environment has changed dramatically. The advertising world is therefore having to adjust to new entertainment options, shifting viewing habits and trends that made the old models obsolete.

According to BIGresearch’s Media Usage Study of over 15,000 consumers, marketers in 2007 have to grapple with a “consumer-controlled” communications model. As Gary Drenik, President and COE of BIGresearch stated:

The long awaited ascent of consumers as controllers of their media environment is apparent in several findings (in the study) and it’s also disruptive to the age old media distribution model many advertisers have relied upon.

The shifting ad trends are a great indications of all this. In 2006, US measured spending on traditional media grew at a “soft” 3.2%, according to TNS Media Intelligence Data — as reported in an April AdAge article. At the same time, US interactive agency revenue rocketed 23.1%.

Against this background, an opportunity came up to take a good hard look at how media planning and buying worked throughout Johnson & Johson. As Kim (who is Chief Media Officer and Worldwide VP) explained to me, when Johnson & Johnson completed its acquisition of the Pfizer Consumer Healthcare business, the time was ripe to take a look at media planning and buying to see if there is a better way to support brand communications and get more value for the money.

I had a chance to catch up with Kim to discuss the review she and her team undertook. In her words:

We just weren’t getting the kind of strategic thinking and return on investment for all the brands we represent. We were spending more on traditional media than we should have been, leaving some opportunities — such as search, and experimental media — largely under-leveraged. We were looking for innovative ways of approaching media — not just traditional media outlets, but new, emerging media. Those opportunities need to be considered as part of the planning process to make sure we are investing wisely with an eye to the future.

So we experimented. We worked with Naked Communications on the Acuvue brand in Wal-Mart, and found that they did a terrific job of reaching the customer — which is what this is all about. We recognized that the time had come to reassess how we managed our businesses, and so when the opportunity arose, we jumped.

So, Kim and people from throughout Johnson & Johnson worldwide launched into a review of the media agencies — looking for new approaches and models that they could work with. I’m told it was an intense process. Lots of international travel. Loads of meetings with agencies and brand teams. And lots of late nights. The result?

The main shift was to make communications planning the center of all media planning and buying. Communications planning would then be teamed up with an agency of record for media buying in each market. It’s a new model that, according to Kim, will help make sure that all brand communications would be based on consumer insights and behavior — and that planning would consider all media outlets — not just traditional media.

So now that this is all over, did the coverage accurately reflect what was decided?
For the most part, yes.

In particular, according to Kim, Steve McClellan and Andrew McMains at AdWeek did a nice job explaining the differences between “Communications Planning” and more traditional media planning. As they put it:

While communications planning is gaining favor among US marketers, J&J is believed to be one of the first major domestic firms to hold separate and simultaneous reviews for traditional media planning/buying and communications planning.

Traditional media planning is largely tactical and mainly focused on the weight that should be given to individual networks, stations, dayparts and publications. Communications planning is strategic and tries to develop overall marketing plans for brands, taking into consideration all channels, including, but not limited to, traditional and emerging media, public relations, viral marketing, sports and entertainment marketing and event planning.

While AdWeek and AdAge took a deep look at the results of the media revview, the Wall Street Journal story focused on the business implications of the review on Interpublic Group. Perhaps the details of the plan were a bit too much “inside baseball” for the pages of the WSJ.

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