Mentholatum slashes costs with move to new agency

The Mentholatum Company has shifted the advertising for its entire portfolio of brands, including Deep Heat and Oxy, into Ogilvy Healthworld Advertising.

The consolidation follows a review of the Mentholatum agency roster, which previously saw Euro RSCG handling the creative work for non-prescription healthcare products, and Nitro providing the work on the Oxy range of medicated skincare products.

The US-based pharmaceutical giant, which bought the Oxy brand from GlaxoSmithKline in December 2004, is understood to be planning to suspend all above-the-line TV and print work across its brand portfolio to focus solely on below-the-line activity.

It is also believed to be gearing up to reposition the Oxy brand, targeting healthcare professionals directly rather than a broader consumer market, with plans to slash advertising spend from an estimated £1.5m to about £300,000.

Chris Hatton, marketing director at Mentholatum, says the move was prompted by a need to "maximise budgets given continuing pressure on margins". He adds: "Ogilvy Healthworld demonstrated it could handle both pieces of business, as it combines healthcare and consumer advertising."

The review will not affect media planning and buying, which remains with Acumen Partners.

In March the company ploughed £1.5m into relaunching Oxy, reformulating several products in the range and revamping its packaging in a bid to give the brand a more modern feel (MW March 23). The move was supported by a TV advertising drive, created by Nitro, and internet activity.

The Mentholatum Company is a subsidiary of the Japanese group Rohto Pharmaceutical.