Company: Novartis
Agency: Ruder Finn
Timeframe: 2006-2007
Creating value for shareholders and owners is a primary goal of pharmaceutical firm Novartis Corporation, but in 2006 the Swiss-based company confronted a challenge in
understanding how to secure the interest and attention of potential shareholders in the United States. Despite its strong financial performance, leading medicines and innovative
R&D approaches, Novartis was not receiving the level of elite shareholder investment and awareness it would have liked in the U.S. market. The company also wasn't garnering a
strong voice in the U.S. business and financial media in comparison with its domestic competitors.
To rectify these problems, Novartis tapped public relations agency Ruder Finn to bolster awareness among elite U.S. investors by driving positive coverage of the company in
business and financial media outlets that reach the target stakeholder group. Thus, the "Getting Down to Business" initiative was born.
An Ocean Away
But, like all international initiatives, this one faced a considerable challenge: A little thing called the Atlantic Ocean.
"When you're headquartered outside the U.S., you always have to work a little bit harder to get U.S. investor interest," says Kathy Bloomgarden, Co-CEO of Ruder Finn. "Because a
great percentage of the shareholder base was in Switzerland, the challenge of the program was raising awareness of and appreciation for Novartis [on a global scale]. [Our strategy
was] using the media to drive communications as a partner to the investor relations team that was located in New York."
The "Getting Down to Business" campaign's primary objective was to boost awareness and favorability among potential investors via positive coverage of the company in target
business and financial outlets. If successful, awareness and favorability would generate a more receptive investment environment for Novartis.
"You're working at the awareness aspect, but at the same time also wanting to strategically build your reputation as the awareness increases," says Sheldon Jones, VP/communications
at Novartis.
The PR firm partnered with Novartis' investor relations and corporate communications offices to establish a list of key platforms that Novartis wanted to communicate through
business media, which included:
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Leadership of Novartis' executive management team;
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Novartis' financial successes, which could support stories demonstrating Novartis as a good investment; and,
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Depth of the Novartis pipeline at a time when many competing pharmaceuticals were plagued with a dearth of innovation, demonstrating Novartis' strong late-stage candidates--
pending regulatory approval--that will drive significant sales.
The team also slated key milestones for the 2006 calendar year, including strategic events, announcements and key company platforms, that could be leveraged for outreach to U.S.
business and financial media. The event outline was built around the availability of Novartis's executive management team for media interviews (see sidebar on opposite page).
For each milestone event, Ruder Finn developed pitch materials, coordinated executive management availability, and conducted aggressive research to the target business outlets, as
well as constructed spokesperson briefing documents for the client in advance of the interviews.
The team approached targeted business and/or financial publications solely during milestone events that contained strong, meaningful and appealing news, including quarter- and
full-year earnings reports, acquisitions and grant awards. Offering significant access to Novartis' senior executive team made interview opportunities more desirable to the media, the
team says.
Additionally, it was important to "make sure that we had really great clarity about what makes Novartis stand apart" from its competitors, Bloomgarden says. The team focused on the
strategy of the company, as well as its strengths, to clarify what significant "team messages" would have the most impact.
The team also took advantage of the news flow throughout the course of the year "so we could keep that outreach to investors and financial media" at a consistently high level,
Bloomgarden says.
"We made certain that every important news announcement, every strategic move, every innovation of the company, was put in place so all of the information flow was kept at a very
constant level," she says.
Speaking Their Language
In addition to media outreach that hinged on milestone events and company news, the team conducted research to establish the most influential channels for reaching the target
audience.
Primary research conducted through surveys in 2006 calculated awareness and favorability among "elite" investors and influencers toward Novartis. Results ranked the pharmaceutical
firm at five percent in unaided awareness and seven percent for favorability. A media audit in investor-targeted outlets found 771 stories published about Novartis in 2005. These
search findings served as a benchmark for 2006 efforts.
Meanwhile, secondary research consisted of creating a "thought-through matrix" of business publication and reporter targets that would influence U.S. investors and typically
possessed a balanced and/or positive stance on pharmaceutical firms. A second media audit determined pharmaceutical analysts who were regularly quoted in the financial media.
Secondary objectives targeted investments and increases in Novartis' stock price by:
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Raising coverage of Novartis in target business and financial outlets;
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Promoting positive feature stories that positioned Novartis as a strong investment; and,
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Securing Novartis' inclusion in "hot" stock-pick listings and business rankings.
"We had to make certain whether we were generally reaching the financial community and the financial media that we were targeting," Bloomgarden says. "We had a very clear list of
print, dot-coms, bloggers, broadcasts, etc., and we really segmented them out. We looked at on an ongoing basis to how much coverage we were getting" in relation to Novartis
competitors, she says.
Adding Marketing To The Mix And Measuring Results
The agency also implemented "Innovation Spotlight," an online advertising campaign developed to capture the attention of elite U.S. investors while they are logged on to financial
Web sites such as Bloomberg.com and Forbes.com. The creative ads, similar to "mini-Web sites," featured interviews with Novartis management on components of the company's business
model. Additionally, the interactive ads featured press releases, live Novartis stock quotes and links to investor relations information. This online element of the campaign proved
successful and measurable: 14.3% of viewers interacted with the video portion of the ad or clicked on various calls-to-action, compared with an industry average of 4.3%.
Overall, the Novartis-Ruder Finn program has been very successful from a strategic point of view as well. Stock shares rose more than 11%, up from $51.63/share at the beginning of
2006, as compared to $57.44 at year-end 2006. Media coverage increased 50% in 2006 compared to the period a year earlier. Unaided awareness of Novartis went up six percentage points,
and aided favorability rose 15 percentage points in a survey of U.S. elite investors, benchmarked against a 2005 awareness and favorability survey commissioned by Ruder Finn and
conducted by The Melior Group.
Kiplinger's, among others, named Novartis as one of its top three pharma stock picks, citing the company's strong sales from existing products and robust drug pipeline. Several
magazines featured stories about the company, including Fortune magazine, which named Novartis among the "World's Most Admired Companies." The team was a Public Relations Society of
America Silver Anvil award winner for investor relations in the sales of more than $500 million division.
"I think we had very clear metrics that we were using through the course of the program to help us measure our success," Bloomgarden says. "I think the ultimate success that
Sheldon and his colleagues in investor relations always mentioned was that the investor base in the U.S. definitely picked up. That's a very concrete measure of communication and PR
being able to really contribute a great deal to a very strong investor program." PRN
CONTACTS:
Kathy Bloomgarden, [email protected]; Sheldon Jones, [email protected]
The 411 On Financial Communications
It can be a challenge to raise awareness and favorability among overseas investors by boosting positive coverage in targeted business and financial outlets. The following are key
aspects that "are the basis, or fundamentals, of financial communication outreach," says Kathy Bloomgarden, Co-CEO of Ruder Finn.
1. Discover differentiation: It can be difficult to achieve a firm grasp of the company as it is benchmarked against some of its peers, Bloomgarden says. It's important to have a
very clear set of messages that completely differentiate the companies. "Just that exercise of going through what's genuinely different, what's genuinely compelling, and developing a
strategic platform of these messages that you use consistently over and over is really crucial," she says.
2. Continue communication: Regular communication is key to building a strong rapport with the media. When news or milestones come out, the media hears about it early and feels
well-sourced, and you know you have very strong relationships with them, Bloomgarden says.
3. Review company rankings: Keeping abreast of your company's rankings is key because it may offer the opportunity to "benchmark yourself against those strong players that you're
competing against for investor attention," Bloomgarden explains.
Linking Up To Leverage Outreach
Ruder Finn partnered with Novartis' investor relations and corporation communications offices at the start of 2006 to determine key company milestones that could be leveraged for
outreach. The team dovetailed the milestone list with the availability of Novartis' executive management team for media interviews.
The team discovered a significant obstacle early in the process when they found that Novartis' chief financial officer and his team would not be available to the media. In
response, Ruder Finn and Novartis identified corporate, financial, product and pipeline announcements that could be leveraged to pair up media outlets with available Novartis senior
executives.
Lengthy research of media audits and reporter statistics resulted in a matrix of key outlets and reporters to target for the campaign, including The Wall Street Journal, Financial
Times, BusinessWeek, Fortune and Forbes. The team also proactively liaised with additional business and investor-focused publications.
RF worked with Novartis to determine a financial budget for the development of an online advertising campaign, which RF developed among U.S. investors. Financial terms were
undisclosed.