During last night’s episode of Gruen, it was pharmacies that came under the fire of the panellists, with Chemist Warehouse's low budget ads slammed.
Former Leo Burnett boss Todd Sampson criticised the pharmacy's ads, such as What's on in the Warehouse? and Healthy Break, saying it's “not advertising".
“The two major factors for a television commercial are cost and time. TV commercials could cost anything from $200,000 to $2 million. Those probably cost $20,000 for five,” he said.
“Each of these are four minutes on YouTube. They can go through the entire self actualisation process themselves; create the problem, cause the drama then give the solution in one hit, which is difficult to do in 30 seconds.”
Sampson was joined by host Wil Anderson and series regular PwC chief creative officer Russel Howcroft, Pulse Collective MD Lauren Freed and GTB integrated business lead Camey O'Keefe on last night's episode.
Anderson also joked about the constant barrage of perfume ads that Chemist Warehouse has in the market, particularly those with celebrity endorsement.
Anderson rattled off examples from actor Jennifer Aniston, right through to rapper Pitbull's 'Man' cologne, joking he would rather smell like “pitbull dog” over the latter.
Cheapness remained the focus for the panellists, as Freed touched on the amount of Chemist Warehouse's budget that went toward convincing customers of its consistent low prices.
“The thing with Chemist Warehouse is they are a marketing machine, they spend $100 million to look cheap. Part of the core thinking behind Chemist Warehouse is around low price,” she said.
“They aren't trying to denote anything else other than that low price is what they do. What they are trying to do is put as many low price products infront of you and they want to show that they have really expensive products that are so dramatically slashed.”
Freed added that this is untrue and that if “you researched just for a second” customers would realise they are not getting a low price.
Sampson added that everything inside the store is designed to emulate its marketing strategy, with the shop layout looking cheap, to lower a customers' guard.
“The whole store looking cheap and looking like you're finding your way through it – this kind of theatre brings down your guard because you assume that it is cheap because of where you are,” he said.
“They don't need to convince you that it is cheap because you've already convinced yourself [during that time].”
Chemist Warehouse parted ways with its full-service agency Quattro late last year, moving across Rich List Radek Sali's and Andrew Shostak's agency Stratosphere.
The account was worth about $100 million in media at the time.
Often dubbed "the McDonald’s of pharmacy", it employs more than 16,000 staff in Australia and New Zealand and is a huge spender when it comes to marketing, playing heavily in the TV ad and digital space – as well as radio, print and sponsorships.
The company, which is said to use a complex franchise structure to circumvent Australian regulations that limit how many pharmacies a company can operate in any one area, is now part of a group of four major brands that make up twice as many locations as Coles and Woolworth combined.
The $16 billion industry is dominated by Terry White, Amcal, Chemist Warehouse and Priceline.
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