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Agency Confidential: The Scoop— What Your Agency Doesn't Want To Tell You


Pharmaceutical Executive

Pharmaceutical ExecutivePharmaceutical Executive-06-03-2009
Volume 0
Issue 0

Pharma friendless on Facebook | DTC ad spending flat | Rate of healthcare marketing and advertising falls | Consumers chose food over meds | Some see light at tunnel's end

"It ain't pretty," as the private detectives say in pulp fiction. Of course, Pharmaceutical Executive's Agency Confidential investigates healthcare advertising not crime scenes. And so far we haven't tripped over any corpses. What we have found while snooping around the industry's top agencies are a set of some pretty dim stats. Consider:

  • Explosive growth rate of healthcare advertising and marketing seen in 2006 has slowed.

  • Healthcare spending rates in 2008 were well below the total industry average.

  • Consumer advertising for prescription drugs was down 8 percent in 2008 (the first reduction in DTC spending since the late 1990s). And a further 11 percent reduction is expected in 2009.

  • Drugmakers are cutting expenses across the board, including the number of sales reps.

  • Manufacturers are also seeing Rx sales slow as more consumers decide not to fill scripts and/or move to generics.

  • Brand advertising is an easy target for cost-cutting.

  • Sales are hurting as food trumps meds.

Trimming the sails means doing things differently. Pharmaceutical companies are changing their advertising mix. Less money is going to print ads in magazines and newspapers and more money is going into television and online ads.

IMS Health reports that the typical return on DTC investment ranges from 1.9 for syndicated TV to 1.4 for network television.

  • Network TV audiences are falling. Viewers are moving to cable and syndicated programs. And they are moving online.

  • Recent data shows an ROI of five to one for online DTC because online ads are better targeted than print or TV.

  • The Internet audience is as big as the TV audience and still growing, while TV is shrinking.

  • Consumers are moving online and advertisers have to follow them.

But enough with the stats, you get the picture—Things are tight and pharma is trying to get it right.

In this year's Agency Confidential, Agency Insider Mark Chataway travels the Internet Super Highway. Read what he found in "I've Seen The Revolution And It's Not Working". In Agency Buzz, 21 top agency executives tell what they really think about the marketing and regulatory environment. But they don't leave you hanging. They'll tell you how to survive.

– Marylyn Donahue, Special Projects Editor

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