Gideon Spanier
Sep 18, 2020

Two agency groups face off in Walgreens Boots Alliance global review

Race hots up for US pharmacy giant's integrated account.

Boots: currently works with WPP
Boots: currently works with WPP

Walgreens Boots Alliance has shortlisted two agency groups in the race for its estimated US$600m integrated advertising and marketing account.

WPP, the incumbent, and Publicis Groupe are facing off in the last part of the review – one of the biggest international, integrated pitches of the year and a significant prize.

It is thought Omnicom participated in an earlier stage of the review but is no longer involved.

A spokesman for Walgreens Boots Alliance, which owns the pharmacy chains Walgreens in the US and Boots in the UK, declined to comment on the process but indicated the company plans to make a decision by the end of the year.

Industry observers suggested the result could happen sooner.

WBA kicked off the pitch in May in the middle of the coronavirus lockdown and enlisted MediaLink to support the process.

The agency groups and MediaLink would not comment.

 

WBA first consolidated its creative, media, public relations and other communications disciplines in a single agency group at the start of 2017, when it awarded the business to WPP.

The US is a key market for WBA, generating about three-quarters of global sales. The UK represents a tenth and the remainder is chiefly spread across the rest of Europe.

Stefano Pessina, the chief executive of WBA who is moving to become executive chairman, told investors on its earnings call in July that “it is highly likely that certain aspects of customer behaviour may change permanently” because of the coronavirus pandemic.

Boots recorded a 78% jump in online sales in the last quarter as physical retail stores were shut during lockdown.

Pessina said he planned “an acceleration” of the group’s digitalisation plans, citing a recent partnership with Adobe and Microsoft, which will support the “major expansion of our mass personalisation and customer engagement platform”.

Alex Gourlay, co-chief operating officer of WBA, said that “we believe that our ability to personalise our marketing” by investing differently will mean “we'll be able to convert more people” in its mobile apps, and he added that WBA’s “powerful loyalty programme” can boost online sales.

WBA credited “the ongoing roll-out of mass personalisation” for lifting Walgreens’ retail sales by almost 1% in the last quarter.

Overall, WBA’s group sales rose marginally, although it said profit margins were “significantly impacted” because of Covid-19.

WBA spent $585m on advertising costs in 2019 compared with $665m in 2018 and $571m in 2017, according to its annual report.

 

A growing number of clients have been looking to integrate their marketing services needs with one agency group as they seek to offer a more joined-up customer experience for consumers and improve efficiencies.

Such accounts are seen as an attractive prize for big agency groups because it usually means a deeper relationship with a client and higher revenues.

Last year, teams from WPP and Publicis Groupe faced off in another high-profile, two-way fight in the final round for Centrica’s integrated account.

 

Source:
Campaign UK

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