CG Life doubles in size by buying a digital shop to expand its health and sciences targeting

Financial terms of the acquisition, which closed on March 22, were not disclosed.

Chicago-based CG Life uses an integrated marketing approach to support brands in medical devices, therapeutics and diagnostics. CEO David Ormesher said the health care space changing “dramatically” has meant that agencies need to focus on more “nimble, omnichannel digital strategies” to reach their audiences – especially as the sector has become more crowded in recent years.

With the holding companies (including Publicis, Havas and Omnicom) expanding in health, Ormesher explained that they typically form health divisions by acquiring agencies in these verticals – following the traditional holdco model. However, Ormesher contends there is actually more competition and innovation coming from private equity-backed companies and platforms that have directed their acquisitional gaze at the sector.

“Private equity has become very interested in life science agencies, especially those specializing in pharma commercialization,” he said. “A number of large platforms assembled from M&A activities, digital innovation and rapid organic growth have emerged to challenge the traditional ad agency model.”

By acquiring Toolhouse to boost its digital services, CG Life can strengthen its focus in the health and science clients while leveraging “technology-enabled, data-driven customer experiences,” said Mike Wiebe, svp of digital at the new agency.

Independent agencies and holding companies alike continue to invest in the health and sciences sectors as brands grow their B2B and consumer outreach. The health care and pharmaceutical industry will spend more than $36 billion on U.S. advertising in 2024, up 16.7% year over year, according to WARC Media. WARC also found that the vitamins and supplements subcategory has seen significant growth in sales.

And as AI and emerging adtech are changing the business, more agencies are combining with creative and media shops or with digitally-focused agencies to gain an edge in the emerging market. Rio Longacre, managing director of advertising and marketing transformation at consultancy Slalom, said there’s been a “lot of movement in the agency space” lately, making room for more expansion and opportunities for those entering a new market.

“Across the board, every brand is laser-focused on top-line, revenue-generating activities – that’s the big trend in every industry this year,” Longacre said.

At CG Life, Ormesher said AI is being integrated into “all aspects of the business,” ranging from research and creative to omnichannel targeting recommendations. In the long run, he expects to see more consolidation among the various platforms – with more innovation and personalization in life sciences, from “targeted therapies to smaller patient populations.”

“It’s a future that requires a deep understanding of the science as well as the digital capabilities to reach the right audiences with personalized messages,” Ormesher said.