Spend Trends: A $20 Billion Bill and Plenty of Change - Pharmaceutical Executive


Spend Trends: A $20 Billion Bill and Plenty of Change

Pharmaceutical Executive

‘‘ ROI is crucial. But it’s far easier to measure in relationship marketing than in awareness advertising. Relationship marketing is built on numbers. anne devereaux, chief integration officer, BBDO ”
Close Relations One trend operating below the radar is the growing importance of relationship marketing, defined by Devereaux as "establishing a dialogue over time between customer and marketer that allows both to benefit." Related phenomena are permission and loyalty marketing. "Sometimes," Devereaux says, "it happens online, sometimes by mail, and sometimes through programs, like frequent-buyer plans in the consumer world." But no one knows what this kind of marketing adds up to. "You can't track patient communication in the doctor's office," Devereaux says. "We can look at individual client budgets and see the marketing mix shift from awareness advertising to relationship marketing, but an outside service can't track total spend." Still, Devereaux says, "there's an increasing focus on targeted marketing because everyone's recognizing that if we can't help patients become more compliant and persistent with medication, all the other efforts aren't being maximized. And that will continue." It's not a swing from acquisition to adherence, Devereaux says, so much as a shift in stress: "DTC advertising in its traditional form will be dialed down, but it still has a crucial role to play."

Ramspacher hasn't seen many adherence messages in broadcast DTC yet, though there's talk of weaving more in. But she is seeing the marketing mix moving toward more compliance and persistence messaging. As examples, she cites direct-to-patient or customer relationship management (CRM) and behavioral modification programs that complement DTC awareness advertising.

The internet, small as pharma's current spend there is, plays a crucial role in relationship marketing, according to Devereaux: "The first thing people do when they have symptoms or get a diagnosis is go online. The internet used to be a way we talked to young people. Now it's increasingly important for reaching baby boomers who are becoming more internet dependent." The web, she says, "is becoming a fantastic way to disseminate information and begin a dialogue where the patient opts in."

The web may be a magnet for consumers seeking health information, but pharma's own sites attract comparatively little attention if you measure expenditures against results. Internet spend is the fastest-growing item on pharma marketers' agenda, but traffic in "the pharmaceutical space online," says Dawn Brozek, senior analyst with Nielsen Net-Ratings, "has been fairly static."

''Pharma hasn't really embraced the web fully. If more dollars were directed there, we'd see traffic increase. Dawn brozek,senior analyst, nielsen netratings
The good news is that more folks are going to product sites, condition sites, and unbranded general health information portals supported by pharma. But, Brozek says, "not in large numbers." WebMD gets six million unique visitors per month. The leading pharma health portals fetch a fifth as much. This is one reason, Brozek says, pharma offers sponsored content on commercial portals such as WebMD, Yahoo!, and MSN. What's worse, "other industries' audiences are growing much faster," she says. Brozek believes "pharma hasn't really embraced the web fully. I suspect if more dollars were directed toward the web we'd see traffic increase."

Raising Cost Consciousness What is the most powerful force now shaping pharma marketing? With the industry facing the loss of pricing power, a passel of blockbuster patent expirations, and a paucity of new brands, it may be frugality. These days, pharma is looking to wring the most from every dollar.


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