PR LEAGUE TABLES: Healthcare sector makes a recovery - Despite massive changes in the healthcare and pharmaceutical sectors, the future for growth of agencies is looking very healthy

An intriguing feature of the Marketing PR league tables a year ago

was that the lists of fastest-growing agencies were dominated by IT and

healthcare specialists. Judging by the latest figures, however, it looks

as though the techies were still in growth mode in 1998, but the medics

had a relapse. None of the out-and-out medical specialists exceeded the

industry average on growth, and a number turned in flat

performances.

There was ’a bit of an hiatus’ in 1998, says Sarah Harwood, managing

director of Shire Hall Communications, one of the top specialists. Now

the sector talk is of boom again.

Steve Carroll, chief operating officer of the CPR Worldwide group,

claims to have been involved in six pitches for business in the past six

weeks.

Others agree that a slowdown in business that was evident particularly

in the final quarter of last year has now gone into reverse.

Such blips do occur, and there are several theories about what

happened.

Harwood points out that the really intensive PR activity relating to

pharmaceuticals is concentrated ahead of the launch of new products.

Although she has done no research into the question, she suspects

there’s an underlying cycle of new launches.

There have also been a number of restructurings within the

pharmaceutical industry, and mergers, such as the coming together of

Astra and Zeneca. In any industry, such deals lead to budgets being put

on hold while activities are reviewed.

Also, the National Health Service is going through major changes. These

include the planned abolition of fundholding GP practices, and the

introduction, from April, of Primary Care Groups in the regions.

’It means our target audiences have changed somewhat. We have to be

aware who is making the important decisions, so we can target them,’

explains Gayle Sawyer, an account director at Grayling. ’A lot of my own

work has become targeted at nurses, because they are becoming more

influential, and are being given more responsibility for

prescribing.’

Perhaps it’s not surprising,therefore, that one healthcare PR firm noted

that work programmes for 1999 have only recently been cleared. Normally,

they would have been signed off late last year.

Putting this glitch aside, it’s hard to disagree with the practitioners’

view that healthcare PR will continue to expand rapidly. One reason for

this is the pressure on drugs companies to get their new products into

the market as quickly as possible, to maximise sales before the patents

run out. ’A flying start can make a difference of millions of dollars

over the life of a product,’ says Stephen Bullock, chief executive of

Medical Action Communications (MAC).

PR is a vital tool, he explains. A product can’t be advertised until it

is ready for launch, but PR can ensure that the target medical audience

is primed ahead of the launch.

The same considerations explain why healthcare PR is becoming more

international; the faster a new product can be rolled out across the

major markets, the bigger the return to the manufacturer.

’Everyone has talked about the globalisation of our business,’ he

says.

’The evidence for it has been slow to emerge, but is increasing now.

Clients have got over the hump of worrying about different languages,

cultures and regulations.’

European expansion

The international dimension is important. London-based CPR Worldwide now

has a US office. According to Carroll, half of its international clients

have their headquarters in the US but complain that their local agencies

are too US-centred.

Meanwhile, its competitor Fusion surrendered its independence during the

year to become Lowe Fusion Healthcare. The deal was billed as both the

Lowe Group’s first PR acquisition this decade, and the first European

acquisition of the US-based Lowe Healthcare network, which includes

advertising and PR.

’We’ve had many offers over the years, and always said we were never

going to sell,’ says Fusion managing director Julia Cook. ’But this

approach seemed to be at the right time, from the right people.

’From the US, London is seen as a good base for Europe, so the deal was

in line with our own aim of European expansion. We have found that the

amount of European work we are doing is accelerating. That includes

securing three major international accounts which are just starting

up.’

Interestingly, MAC chose to go in a different direction, teaming up with

a US group specialising in pharmaceutical industry services, such as

field trials and sales, rather than with one of the communications

networks.

There is, of course, a rivalry between dedicated specialists and major

PR networks, many of which have substantial medical divisions. When

Ketchum (now part of Omnicom) first moved into the UK, one of its

strategies was to build up its healthcare business. It has succeeded to

the point where this specialism accounted for about a third of the

agency’s income, before last year’s merger with consumer agency

Life.

In the US, Ketchum has just been voted healthcare PR agency of the

year.

London healthcare managing director Paul Blackburn claims to see a shift

in the market, with international clients accepting that the big,

established PR networks can be highly specialised, too.

That’s the view of his opposite number at Hill & Knowlton, Karen

Moyse.

The H&K healthcare practice is a 24-strong team. Already accounting for

more than pounds 3m in income, it has a 24% growth target this year.

Half its business is already based on international assignments, and the

proportion is expected to grow.

But there is another growth area attracting attention, as Moyse points

out. This is direct-to-consumer PR, or DTC. Expectations are already

widespread that a US initiative to allow ethical (prescription) drugs to

be advertised to the public will be followed in Europe. That’s a big

issue for tomorrow, but there’s already a need for more sophisticated

consumer communications via PR, she adds.

’We are introducing our clients to consumer planning, which creates more

knowledge about the market, and about different types of consumers and

their attitudes,’ she says. ’Currently the pharmaceutical industry

doesn’t have communications planners such as you would find in classic

consumer marketing. We think this will enable our clients to ’jump the

curve’, and even take their skills ahead of the FMCG sector.’

HEALTHCARE, TOP 25

Rank   Agency                           Total income 1998     Healthcare

                                                 (pounds)  1998 (pounds)

1      Medical Action Communications            7,520,000      7,520,000

2      The Shire Hall Group                     4,222,000     4,222,000[

3      Hill & Knowlton (UK)                    23,295,000      3,028,000

4      Shandwick International                 25,843,000      2,584,000

5      Ketchum (incl. Life)                     9,608,000      2,498,000

6      CPR Worldwide                            2,079,000      2,079,000

7      Holmes & Marchant Group                  3,783,000      2,005,000

8      Grayling Group                           8,091,000      1,780,000

9      Cohn & Wolfe                             5,399,000      1,566,000

10     Lowe Fusion Healthcare                   1,478,000      1,478,000

11     Munro & Foster Communications            2,299,000      1,264,000

12     Countrywide Porter Novelli              17,913,000      1,164,000

13     GCI/APCO (incl. Focus Communications)    7,422,000      1,113,000

14     Government Policy Consultants            6,402,000      1,088,000

15     Edelman Public Relations Worldwide       8,934,000        983,000

16     Biss Lancaster                           7,244,000        797,000

17     Charles Barker/ BSMG Worldwide           9,627,000        674,000

18     Manning Selvage & Lee                    3,570,000        500,000

19     Beattie Media                            4,120,000        412,000

20     EMC Euro PR                              1,009,000        404,000

21     BMA Communications                       1,614,000        323,000

22     The Public Relations Business            2,128,000        319,000

23     Lyons Waddell                            1,038,000        311,000

24     Nexus Choat                              3,724,000        298,000

25     Harrison Cowley                          4,849,000        242,000

This article was first published on Marketing