Take Sepracor's sleeping pill Lunesta. In 2006 and 2007, it was widely ranked as the most heavily advertised drug in industry.
But when top-selling Ambien became available as a generic in April 2007, the competitive landscape changed. It became difficult
for brands like Lunesta, in the prescription side of the insomnia market, to reach sales goals. Advertising for Sepracor was
cut back significantly from $293 million in 2007 to $109 million in 2008. "When you look at rankings on ad spend, it's purely
a function of not advertising at the level they have been for business reasons," says Zamaniyan. "There were no adverse effects
reported for the brand; it was purely a decision made on a financial basis."
Most of the industry cut back on unbranded advertising in 2008. Not Pfizer. Instead, the company spent 80 percent more on
its unbranded "tortoise and hare" campaign for Chantix, the smoking-cessation drug. Other companies should have followed suit,
says John Busbice, principal in commercial effectiveness for IMS Consulting. IMS conducted an optimization study that suggested
that the top 25 percent of DTC advertisers should have spent more in 2008 than they have historically. In other words, larger
brands should have spent more, and smaller brands less. "When people think about cutting to environmental pressures, they
are prone to overreact," Busbice says. "One of the things we found is that brands with sales over $750 million per year should
have had, optimally, budgets of no less than $100 million. Ideally, the top 15 brands should have spent more."
The great debate in DTC these days is whether consumer-directed advertising will continue to use mass media such as network
television and general-readership magazines, or shift to more targeted vehicles such as specialized magazines and cable. Bob
Liodice, president of the Association of National Advertisers (ANA), believes predictions of the death of television have
always been exaggerated. As a medium for pharma advertisers, he says, "TV is going to be in really good shape."
The Power of Print: Marketing to MDs
In 2008, 1,325 products—of all kinds—were promoted to physicians, according to Kantar Media Research. And pharma companies
have plenty of options for delivering messages about these products to doctors, from TV and radio spots to newspaper and Internet
ads. At any moment, some channels are waning—case in point is journal advertising, which has decreased by 16 percent over
the past two years, according to PERQ/HCI More. Meanwhile, others are increasing—such as the use of medical science liaisons
to communicate complex data about new products.
The trick is to find the right mix and eliminate media waste. But that's not easy, because promotional activities are synergistic.
"When a physician sees an advertisement on television, gets visited by a sales rep, or reads a journal publication and sees
an ad, all of those things have a compounding effect and work to make the physician prescribe a product," says Baron.
TOP 5 DTC COMPANY ADVERTISERS
The past few decades have seen an astonishing growth in narrowly targeted information sources for doctors. For example, 20
years ago there were seven measured oncology journals. Today, there are 37 publications and demographic editions. That means
that the number of oncology publications has doubled—while the number of oncologists remained basically the same. Industry
consultant Charlie Hunt explains that new publications are being created to address specialized audiences and gain advertising
for new drugs that are increasingly targeted at specialists. "From an advertising standpoint, pharma is moving toward targeting
specialty physicians," Hunt says. "For example, if I have a neurology or oncology product, I'm not going into the broad-based
publications as much as I'm going to publications specifically designed for oncologists."
Meanwhile, pharma marketers will be forced (if they haven't already been) to find ways to replicate the value of a sales rep
visiting a physician. Ronald Schulman, senior vice president and director of connect marketing for inVentiv Communications,
believes that part of the solution is to stop driving physicians to company and brand Web sites, and start engaging them at
the locations where they consume healthcare information. This is a process that has already begun on the consumer side, and
according to Schulman, "We expect the same dynamic on the professional side, as well. Shrinking reliance on sales forces and
journal advertising will continue, but the growth of Sermo and the younger and larger Medscape Physician Connect social network
as destinations for healthcare providers will create new avenues for engagement."
Online: The Social Media Scene
From one perspective, digital promotion of drugs is exploding. Companies spent about $1.2 billion online in 2008, and the
research firm eMarketer predicts that they'll spend $2.2 billion online by 2011. But that growth must be taken with a grain
of salt: US pharma and healthcare companies spent about 5 percent of their ad budgets online in 2006—almost the exact percentage
they'll spend in 2011.
So are budgets really shifting toward online? Lee Slovitt, senior media director of Heartbeat Digital, thinks so. "Digital
is the one medium to get concrete results and do more with less," Slovitt says. However, in order for this to work, digital
media must be approached strategically. "It sort of needs its own campaign," he says. "Advertisers oftentimes overlook the
fact that sites like Facebook are user-controlled personal environments. It's more important to recognize, ask to participate,
and get permission from users to be a part of their life."
Clients' patterns of spending are changing, says Lisa Flaiz, vice president, group director, and national pharmaceutical practice
lead with the Philadelphia office of Razorfish. To her, the trend suggests that clients are still willing to invest in broad
DTC campaigns, but that the portable and "beyond the browser" touch points may be more appealing. "Our communications plans
look much different now than they did two years ago," says Flaiz. "They include mobile, social, out-of-home, and more digital
touch points than ever before. Pharma will continue to be conservative about advertising in the social media space, but will
continue to look for ways to surround the discussion in a targeted and relevant way."
A key question is whether brand advertising will benefit or hinder the brand. For example, will commercial presence on a social
media site be met with skepticism? Flaiz expects to see advertising on third party social media sites to increase slightly
as more pharma companies develop policies for how to use social media, and get "braver." But she doesn't anticipate significant
growth. "Pharma, along with all other industries right now, is rethinking its distribution strategy," she says. "Occupying
more of an online presence is how to leverage consumer behavior. The brand of the future has a ubiquitous digital relationship.
This is a mostly digital world. It is no longer enough to have a small Web presence; that worked when we lived in a mostly