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Tuesday, June 09, 2009

Weight Loss Drug Alli on Life Support. GSK Picks New Agency to Oversee Its Eventual Death

A new ad agency -- TBWA -- won GSK's weight loss alli account last week according to a recent Advertising Age article (“Side Effects of TBWA Win Include Unpleasant Alli Account”). If its efforts to save alli via a new advertising campaign fails, alli could be on “life support within 12 months,” says a marketing executive quoted in the article.

But alli is already on life support! It's more likely to be dead in a couple of months.

The first sign of trouble was when the alli blog (alliconnect) went silent back in September, 2008 (see "Has the alliconnect Blog Been Abandoned?"). Just prior to that Steve Burton -- who is credited with launching alliconnect -- was replaced by Karen Scollick as Vice President for US Weight Control at GSK (see "New Image for alliconnect Blog: Skinny Women"). These warning signs predated the reported review in February by GSK of Havas' Arnold, the agency that was handling the alli account at that time.

US sales of alli were down 53% in 2008 to $131 million according to AdAge. It’s market share for weight-control tablets is down 7% in the most recent 52 weeks compared to the year before.

AdAdge also reported that GSK spent $95.6 million in measured media spending in 2008. That does not include the alli blog and search engine marketing (SEM), which could be as much as 40% of all ad spending. That means GSK could have spent $159 million to advertise and market alli in 2008 to achieve that $131 million in sales – a negative ROI. In comparison, 2007 was a much better year: GSK spent $88.6 million in measured media ads ($147.6 million, if you include the blog plus SEM), while sales of alli were $247.2 million.

Bad marketing, however, is not to blame according to the AdAge article. "Keri Gans, a registered dietitian and spokeswoman for the American Dietetic Association, which partners with GSK to promote healthful eating and working with a registered dietitian, doesn't fault the marketing," says AdAge. It's the consumer's fault for not following the healthy living directions included in the marketing. Perhaps the marketing was TOO effective in that regard: it may be that people followed the advice about healthy living, stopped paying through the nose for alli, and lost weight; ie, you can lose the weight WITHOUT alli! That could explain why sales in 2008 tanked after a good initial year in 2007.

9 comments:

  1. Hi John,

    that is some wopping figures there, makes me wander what caused the fall in sales, after having such a good year previous

    ReplyDelete
  2. Hello John,

    i agree you can lose the weight through simply exercise and eating the right foods....we don't need crap like alli being shoved down our throats i believe they call it interuption marketing

    ReplyDelete
  3. imagine if alli used all that money they spent on marketing a product that is just absoloute garrbage, on other things like educating kids about healthy eating, healthy food in school canteens, so on and so forth... i think they would have been sitting better about know..

    ReplyDelete
  4. I am writing to you to discuss a topic,which i believe would be a subject matter as it is a serious hazard to ones health.

    The new ''alli weight loss pill'',

    I had an experience with my mother last night,
    she bought the alli weight loss pill in a chemist in Dublin which did not ask her any personal information on her health or background.

    She was not weighted, Nor no information was collected at the time of purchase.

    she took the tablet for five days, on the fifth day, she was rushed to a near by A&E unit for immediate medical attention.

    She had cronic diahorea and severe abdominal pain which resulted in her losing consciousness and lowered her heart rate and also passed a large amount of blood.
    She still has this severe abdominal pain, as a result,she is unable to consume solid food as it is quite painful to do so.

    We do not know at this time how long these symptoms will persist .

    I believe it would be a good and essential topic to discuss as it is a severe hazard to ones health, and has been advertised greatly nationwide.

    ReplyDelete
  5. Your suggestions are very motivating. But at times the heart is willing but the flesh is weak. Some are lazy for exercises too. Saying a BIG NO to your favorite dishes is very depressing. For some every New Year Resolution would be "I would start my dietfrom Jan 1st". Not even a week and the resolution is rolled over.

    ReplyDelete
  6. that is some wopping figures there, makes me wander what caused the fall in sales, after having such a good year previous

    ReplyDelete
  7. Your suggestions are very motivating. But at times the heart is willing but the flesh is weak. Some are lazy for exercises too. Saying a BIG NO to your favorite dishes is very depressing. For some every New Year Resolution would be "I would start my dietfrom Jan 1st". Not even a week and the resolution is rolled over.

    ReplyDelete
  8. I noted that TBWA took over the alli -- GSK's OTC weight-loss product -- account. "This is one of the greatest marketing challenges today," said an industry executive, who added that Alli has to overcome diet-pill stigmas, a challenging economic climate and lazy human nature -- as well as a horrendous side effect.

    ReplyDelete
  9. It is hard to concede that a drop in sales is due to effective marketing. Even though this is a possibility this is rare and you are right people can lose weight without taking pills

    ReplyDelete

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