You can only manage what you can measure. But according to a recent closed-door meeting led by the consultancy TGaS Advisors, most pharma marketers are still in the dark about what bang they're getting for their online buck.

TGaS invited 14 executive directors and vice presidents, spanning 12 pharma companies (including five top 10 firms), to discuss how commercial organization can measure their Internet marketing strategies.

The TGaS meeting found that marketing execs were confused about how to best benchmark online promos, and who is responsible for executing it. Twelve out of 14 pharma marketing executives admit that when it comes to benchmark measurement, Internet and relationship marketing are two areas most in need of improvement.

Yet when asked how aligned their analytic plans are with their brand strategy, the execs gave their companies a score of 7.5 out of 10. They also gave their companies an average score of 6.7 out of 10 when asked if there were "clear boundaries of responsibility between my organization and other departments that support brand teams."

Indeed, the lack of clarity about what works online may be one reason for the recent dip in promotional dollars for the Web. According to an article on Spend Trends in the upcoming May issue of 

 pharma companies spent $159 million on online advertising in 2007; that's down 5 percent from approximately $167 million spent in 2006.


But even if pharma managers were totally on top of their online marketing operations, they have few tools to evaluate performance. Unlike marketing channels like television and radio, which use standardized benchmarking, online media measurement tools (such as Web site visits and click-throughs) are open to widely diverse interpretations, and don't account for views that lead to sales, according to Bob Shewbrooks, TGaS vice president and management advisor.

Additionally, tracking metrics by page views has become difficult with the growth in flash media sites, where users can view reams of content without leaving a page.

 speculated that Web sites might be better served if their metrics were tracked by engagement rather than actual clicks. "Maybe we need to think about online media consumption in two flavors: ?time spent' and ?engaged time spent,'" he wrote. "What if we could track the time consumers spend with each Web property?pages, audio, video, IM or widgets?in a way that allows for capturing multitasking behavior?"

According to TGaS, the industry is comfortable tracking prescriptions, and the personal promotion channel is very well served with data and analytics. The same metrics, however, can't be used online and clients rely on very skimpy data to justify their investments in these channels.

"No one has been able to draw the direct line from online marketing to prescriptions," said Shewbrooks. "However, some companies have done a good job measuring programs where they have specific opt-in guidelines with decent data capture. That's where cutting-edge companies appear to be doing well when it comes to relationship-marketing measurement."

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As companies make headway with Web promotions, their marketers express concerns about how best to benchmark online efforts.

Pharma Struggles to Gauge Online ROI

, one part of the business getting a financial boost is direct marketing.

The industry is expected to shell out $1.03 billion in total direct marketing (DM) expenditures in 2008—and that number is due to jump to $1.39 billion by 2012, according to new data by the Direct Marketing Association.

As the study's key takeaways illustrate, all trends are up:

Every dollar spent on DM ads is expected to generate $10.27 in DM-driven sales in 2008

DM-driven sales are expected to grow annually at a rate of 9.4 percent through 2012

DM employment is expected to grow annually at a rate of 4.7 percent through 2012

Telephone marketing advertising spend is expected to grow annually at a rate of 4.7 percent through 2012

So where's the biggest area of marketing growth? The Internet. According to the study, online marketing expenditures are forecast to rise annually at a rate of 17.2 percent through 2012. This year alone, the industry is expected to spend $65.1 million on online marketing efforts to businesses, and $28.5 million on consumers. Those figures are due to jump to $120 million and $53 million, respectively, by 2012. That's in stark contrast to 2002, when pharma spent only a $25 million on total Internet advertising.

And it looks like some drugmakers are already innovating their ad spend strategies. In a study by Cegedim Dendrite released in March, more than 50 percent of pharma marketers said that they would be increasing this year's expenditure on email, search engines, and keywords.

"To see about a 20 percent growth rate per year in Internet is huge. But it shouldn't come as a shock—that's where everyone is pushing," said Michelle Tiletnick, research manager at Direct Marketing Association. "Interactive is becoming cheaper than direct mail, and e-mail is more affordable. It's an easier way to reach people."

Industry forecasts estimate DTC funding to hit $1.39 billion by 2012 with e-mail and Internet campaigns getting the biggest boost.

Direct Marketing Spend To Spike As Drug Sales Dip

As more consumers search for health information and share their treatment experiences on blogs and discussion forums, these sites are ranking higher in keyword searches for branded drugs.

"Our findings show that blogs and discussion forums are becoming more visible," said Lance Helgeson, vice president of interactive PR firm v-Fluence. "They're showing up in search results for pharma brands when consumers look for the brands themselves, as well as for treatments and side effects that relate to a given therapeutic area."

According to Helgeson, the study looked at the visible search results—the first three pages of a search on the top three search engines with a few proprietary algorithms mixed in. This technique determines what pages users are most likely to actually click on when they do a search.

In the study, v-Fluence compared the ranking of various searches related to drugs in the cholesterol category, calculating the percentage of a cholesterol brand's online presence consisting of blog or forum references. Below are the top three drugs in each online area.

"While these spaces are not high in number, their influence can be profound due to the popularity of a given blog or forum, the dynamics of Web 2.0, the degree to which influencers pay attention to them, and their increasing encroachment into Web 1.0 search results," said Helgeson.

But the paramount concern for pharma is that most of the online chat tends to cast the drugs in an unfavorable light, often discussing adverse reactions and off-label uses. While some might say that any publicity is good publicity, the pharmaceutical industry goes to considerable lengths to control what is written about its products.

Another problem is that drugmakers don't involve themselves in these online spaces beyond advertising—FDA regulations prohibit them from doing so. In addition, the placement of these ads can be problematic. For example, keyword ads sometimes appear on sites promoting litigation or alternative treatments.

Helgeson recommends that pharma companies deal with the inherent Web 2.0 issues by issuing official research to counter mis- or disinformation—or at least start keeping track of the talk about their products in the blogosphere.

Blog entries about branded drugs-both positive and negative-are turning up in online keyword searches. Should pharma be worried?

Pharmaceutical Executive-04-23-2008

Pharma Struggles to Gauge Online ROI

Direct Marketing Spend To Spike As Drug Sales Dip

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