April 14th, 2008
As US DTC Budgets Fall, Marketers Move Away From TV
By Lynne Taylor
Television advertising is no longer the standard for direct-to-consumer (DTC) advertising of prescription medicines to US consumers, and as drugmakers’ DTC budgets continue to shrink, companies are looking more at emerging and targeted approaches, such as e-mail, websites and programmes in physician offices and pharmacies, including patient education events, rebates/coupons and product placement, according to a new survey from Cegedim Dendrite.
The research finds that nearly two-thirds of marketers see their spending moving in that direction this year, says Lynn Day, Cegedim Dendrite’s director of relationship marketing and analytics. “Brand managers are learning how to align consumers’ unmet needs with their brand’s benefits, which allows them to communicate with consumers in a more meaningful way. This includes both off-line and online initiatives that are more targeted and highly measurable,” she notes.
However, the study also finds that progress in this new direction is slow. Moreover, fewer marketers expect their DTC budgets to increase this year while nearly 30% are forecasting a decrease – compared to just 16% who expected a drop in 2007 – and they include 12% who report that their budget is likely to decrease by more than 10%.
On the other hand, certain challenges to DTC marketing seem to be abating, with marketers now reporting lower levels of interference from government regulations (5% compared to 6% in 2007) and issues related to the Medicare prescription drug programme (3% versus 14%). Respondents were, however, more split over the effectiveness of DTC marketing this year, with 31% currently saying it has become less effective and another 31% believing it is now more effective.
Meantime, the Direct Marketing Association (DMA) estimates that US drugmakers will generate $10.6 billion in sales through direct marketing this year, providing an advertising return on investment of $10.27 on each dollar spent, and that this business will grow 9.4% a year to 2012 to reach $15.2 billion by then.
During 2007-2012, drugmakers’ direct mail spending will grow 7.1% annually, while the commercial e-mail spending portion of these expenditures will increase 22% annually, says the DMA in a new report Direct Marketing Facts and Figures in the Pharmaceutical Industry. The internet advertising portion of this spend will grow from $93.6 million in 2008 to nearly $173 million by 2012, and print marketing will generate over $2 billion in sales this year, it adds.
Initially, DMA was going to include the pharmaceutical industry as part of its health care report which was published in February, says DMA research manager Michelle Tiletnick. “However, upon review of the information, we realised that pharmaceutical and healthcare marketers were different enough that each merited its own report,” she adds.