Novartis
Global Media Agency Re-negotiation

Background

Novartis is one of the world’s largest pharmaceutical companies with a market cap of $140bn and annual sales of over $50bn. In 2011 Novartis approached ID Comms to lead the design and manage their global media agency review across 107 markets. Novartis invest in excess of $3bn annually on advertising and media, of which approximately $600m is spent in paid-media globally. At the conclusion of this 8-month review, Novartis awarded their global media planning and buying responsibility to Starcom MediaVest Group, on a 3-year contract.

Challenge

In February 2014 Novartis again approached ID Comms, this time seeking help to prepare for and execute a global re-negotiation of the contract with SMG.

Action

The imminent expiry of the original three-year service agreement provided Novartis with the perfect opportunity to gauge the temperature of the relationship with their global media partner. It would allow them to course correct where appropriate, to evaluate and assess the role they would require their media agency to play over the next three years and importantly to secure media value improvements through a recalibration of their global media pricing. ID Comms developed and executed a multi-stage process:

  • Situation Analysis – We conducted a diagnostic of current working process, identified where improvements were necessary and developed an ambition for media management for the following three-years.
  • Stakeholder Alignment – We designed and facilitated a two-day workshop for the global decision makers in which we secured alignment of negotiation objectives and expectations.
  • Negotiation Preparation – We led the design and development of the agency contract renegotiation proposal, a detailed document that provided SMG with clear visibility on the requirements and expectations for a future partnership.
  • Negotiation Support – We played a pivotal role in the facilitation and management of negotiation process.

Results

Contractual terms were agreed and signed by both Novartis and SMG well in advance of the expiry of the original agreement. The new agreement was based on a fully modernised and progressive scope of work covering all markets and divisions linked directly to a newly structured remuneration model. Immediate double digit value improvements were secured.

"ID Comms were the architects of our original agreement with our agency and in made perfect sense to ask them to help us renew it. They were brilliant"
Lisa Wiatroski, Global Procurement Category Lead, Media
Summary
Novartis wanted to renegotiate its media contract with Starcom after a successful three-year appointment.
ID Comms was asked to develop a new negotiation approach for this complex global account.
We developed a process designed to secure media value improvements as part of an updated scope of work.
The new contract was re-signed well in advance of the expiry of the original.
Double-digit media value improvements were secured.