"In 2001, there were a lot of questions about whether DTC works or if it is good for consumers. And there were people on both
sides of the fence," says Blankenhorn. "In a recent national DTC meeting, David Kessler, former FDA administrator, admitted
publicly that DTC is here to stay and will be part of the mix because it works and has educational value for the patient population.
It is now more mainstream and will be accepted just like detailing and sampling."
Companies spent $2.8 billion on DTC advertising in 2001, continuing marketers' DTC spending plateau. Consumer promotion grew
36 percent from 1998 to 1999, 32 percent from 1999 to 2000, but only 12 percent from 2000 to 2001, according to Scott Levin.
"DTC growth has been so strong and dramatic for the last few years, there is no way it could continue to escalate at that
rate," says Johnson. "It had to peak at some point. The growth in 2001 was all during the first half of the year, while spending
in the last half of 2001 was below or equal to that of the previous year."
Consumer spending for the first half of 2002, calculated across 15 mediums by Nielsen Monitor-Plus, show that advertising
is up only one percentage point compared with the same period last year. Network television continued to receive the most
dollars-almost $634 million-but grew only 1 percent from the first half of 2001.
National magazines were the next highest spend, growing 18 percent from the first half of 2001 to the first half of 2002.
National newspapers also did well in comparison, increasing 25 percent in the first half of 2002. However, local newspapers
and magazines suffered a blow, with companies decreasing their spend in those media by 81 and 73 percent, respectively.
One surprise came from an often overlooked category, outdoor spending, which received the biggest percentage increase for
pharma's dollars in the first half of 2002 compared with that same time the previous year. Companies spent $1.9 million, an
increase of 350 percent. Spending for network radio, also generally considered a low priority for pharma campaigns, grew 185
percent to $12.4 million.
"There is a relative uptick through the first half of 2002, but it's certainly not like the games of a few years ago," says
Mary Morgan, publisher of health magazine. "Pharma's profits are only one piece of the equation. For the first time, the industry's
DTC advertisers have enough experience to readjust advertising expenditures and look at how they are allocating their dollars
in the marketing and promotional mix."
According to Blankenhorn, part of that reallocation can be traced to industry's collective move to one-to-one marketing, which
includes directing product messages to consumers based on demographics and disease states. That makes the internet the wild
card in the marketing mix because of its ability to do just that.
Marketers of the top 15 pharma brands spent $14.6 million online in 2000 but decreased their spending 14 percent to $12.5
million in 2001, according to CMR. However, those numbers are set to rebound and possibly exceed dot-com era spending, with
the top 15 companies already putting $8.9 million to internet promotion during the first five months of 2002. AZ is the top
spender so far this year, with online campaigns using the latest in streaming media in support of Nexium, allergy medicine
Rhinocort Aqua (budesonide), and Zomig (zolmitriptan), a migraine therapy. Other top spenders include Aventis for Allegra
(fexofenadine) and Schering-Plough for Clarinex (desloratadine), both allergy medications.
Mary Furlong, founder and CEO of ThirdAge, a community site for baby boomers, says the internet is the best way for pharma
to target the "platinum niche" because the 50+ market is one of the fastest growing groups online, is very interested in health,
and purchases 77 percent of all prescription drugs. She believes the web will receive a larger chunk of pharma's promotional
pie in the coming years because companies will realize that they should offer information to consumers when they are searching
for it and because, once they have a prescription, patients can buy medications over the web.
"Total dollars spent on digital promotion may increase from previous years, but the manner in which those dollars are spent
has changed," says Jessica Hewitt DeVliegier, senior director of business development for ThirdAge. "Pharma brands are now
taking a more ROI-based approach to online marketing. For example, companies seem much more inclined to 'test' across a larger
number of sites instead of investing in deep partnerships with just a few sites. More brands are advertising but with fewer
long-term deals. Most cases of long-term partnerships resulted from companies for whom we have delivered successfully against
Pharma marketers, who smiled on the sidelines during most of 2001's recession, are no longer insulated from the economic downturn
in the post-Enron era. As such, they may be surprised when their budgets are slashed to maintain profits, manage costs, and
deliver as promised to investors. In addition, pharma may find it must choose between promoting to maximize profits and to
please constituents, (See PE, "Time To Power Down," March 2002.)
"Pharma companies came out of 2001 doing well, compared with everyone else," says Coen. "It's going to be the reverse this
year. If the market slide is over, the 2002 ending quota can look good-but this is a hold-your-breath kind of year."