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With the economy in turmoil, pharmaceutical manufacturers are reassessing where and how they spend their advertising dollars.
Nielsen reported last Friday that advertising spending among pharmaceutical companies dropped 18.4 percent in 2008, from $5.3 billion to $4.3 billion, due in part to the bleak economic landscape and to a decrease in drugs on the market. Cable television ads for branded campaigns plummeted from $1.2 billion to $663 million during that one-year period. Surprisingly, however, network spending on branded drug ads rose slightly from $1.639 billion to $1.643 billion.
“Pharma was certainly one of the top categories that lost steam,” said Annie Touliatos, vice president of sales development at Nielsen. “But the decrease was expected in these categories because we know that a lot of the larger advertisers have been pulling back on [spending].”
At 18.4 percent, the pharma industry saw the biggest percentage change of media spend, outpacing both the auto industry (down 15.5 percent) and motion pictures (down 11.4 percent). Total US ad spend was down 2.6 percent in 2008.
Where does pharma rank in total ad spend? Number two. Right next to the downtrodden automakers, which spent more than $10 billion on advertising last year. Johnson & Johnson was the only pharmaceutical company to break into the list of top 10 advertisers, spending more than $1.2 billion, down 5.4 percent from the previous year.
“There’s a lot of data that shows that being bullish in hard economic times helps companies pull out of a bad economic state quickly and grow faster,” Touliatos said. “But it all depends on what kind of company you are.”
Ironically, the one area that saw substantial growth in total advertising spend-Hispanic-targeted cable TV ads-was all but ignored by the pharma industry. Branded cable ads on Spanish language programming dropped from $1.4 million to under $850,000, and non-branded advertising was nonexistent on Spanish language network and cable TV.
“In my opinion, any money that pharma is paying to advertise to Hispanics is just compensating for neglect in the past,” said Felipe Korzenny, director of the center for Hispanic marketing communication at Florida State University. “[Pharma companies] are beginning to see that Hispanic numbers are so large and that the pattern of disease and illness is different, so they have to market differently. But it still isn’t much.”