Friday, February 1, 2013

Are DTC Ads Falling Out of Favor with Pharma Companies?

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Today's guest post comes from Nicole May, Research Analyst at Cutting Edge Information

With the Super Bowl only days away, all the chatter has turned to the most interesting aspect of this beloved American tradition — the TV ads.  What products will we see?  Whose commercial will be funniest?  What will Betty White be doing?  One thing that looks to be certain is that pharma companies won’t be joining this year’s commercial line-up. 

Are the ad spots too expensive?  Nielsen reports that the average price of a 30-second Super Bowl spot increased from $2.7 million to $3.4 million from 2008 to 2012.  But considering the 111.3 million viewers who watched the game last year, this investment seems well worth it.  And pharma companies can definitely afford it — estimates differ, but top companies spend anywhere from $4 to $11 billion in development costs per approved drug, so $3 million on a 30 second ad is an afterthought, and in this case an afterthought that could reach more than 100 million consumers in one go.

Pharmaceutical companies in general have been relying on DTC advertising, TV in particular, less now than in the past.  Dollars spent on advertisements across all media dropped by 22% from Q3 2011 to Q3 2012, according to Nielsen.  Why the shift?  For one, marketers are seeing the effect the required lists of drug side-effects have on viewers.   After hearing warnings for “acid-related erosion” or “thoughts of suicide,” any benefit a brand might have gained from a well-positioned ad is all but lost.  Some consumers also perceive ads as a waste of money, money that pharma should be investing back into research.  Others accuse drug companies of misleading consumers in their ads by hiring questionable spokespeople or making false claims about a drug.

Despite pharma’s efforts to promote their drugs alongside informing and educating consumers, television ads don’t seem to be the promotion of choice anymore.  Social media, mobile health apps, and online games are better alternatives and offer possibilities beyond the traditional marketing scope. Mobile health apps and games increase patient adherence, social media allows companies and patients to interact directly, and who knows what Pinterest and Youtube will bring to the marketing mix.

As for TV ads, perhaps those are better left to miniature Darth Vaders and financially focused talking babies.  Although maybe football fans prefer watching a pharmaceutical drug ad over hearing what the Sanofi GoMeals app has to say about eating a bucket of chicken wings.

We are a boutique consulting firm with offices in Research Triangle Park, North Carolina and Boston, Massachusetts, providing primary and secondary research to Life Science organizations. Cutting Edge Information was founded in 2002 by consultants with extensive experience conducting research studies for high-level clients. We put this experience to work to eliminate traditional consulting’s hurdles and focus on producing high-quality information – drawn from top executives at real-world companies for you and your organization.

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