Markets

UPDATED: What Agencies Need to Know About Pfizer's Viagra Account

By Jim Edwards

Updated on: October 6, 2009 / 9:39 AM EDT / MoneyWatch

UPDATE: It's all over: The account goes to McGarryBowen, according to Ad Age.

Any agency pitching Pfizer's Viagra account may want to bear the following in mind: The patent on Viagra expires somewhere between June 2011 and March 2012, which is when the client will likely end its ad budget for the brand.

OK, so that's two years away. But discount the time it will take for the review, and the time it will take for the duties to be fully transferred from incumbent McCann Erickson, and you've got an account on which billable fees could last as little as a year or 18 months.

So yes, it's a big account. But unless you're sure you're in with a chance of winning you may be throwing resources at a pyrrhic victory.

If you're still interested in the account -- perhaps you're hoping to use it as a springboard into more Pfizer business? -- you might want to note some market dynamics that are running against any agency on the account.

First, sales of Eli Lilly's Cialis are growing faster than Viagra, partly because Cialis is cheaper and partly because Cialis has a one-a-day version that makes the brand more attractive to some men. Sales in this category are largely controlled by government and private insurance reimbursers such as Blue Cross and Medicare -- not advertising and consumer demand -- and they tend to insist on cheaper drugs over the more expensive ones.

Second, Pfizer has a policy of increasing the price of Viagra at least once a year -- it's trying to wring all the profit it can out of the brand before the patent expires -- and that will cause more impetus in favor of Cialis.

Both of those factors will make the winning agency look bad, because the chances of seriously affecting sales with advertising in the remaining two years are slim.

The best reason for pitching the account has nothing to do with Viagra. Pfizer has just acquired Wyeth, and the company is going through management changes that will likely result in client execs at several Pfizer and Wyeth brands changing. With changing clients come changing agencies; and thus a smart agency should look at Viagra as an investment in future new business opportunities with the company -- not as something worth winning on its own.