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Drug Marketing Drops

Prognosis: pain

June 3, 2009

Is direct-to-consumer (DTC) marketing by pharmaceutical companies flat-lining?

Not yet. But the outlook isn’t good. TNS estimated in 2008 that total US DTC advertising spending would be $4.7 billion that year, down from $5.2 billion in 2007.

The figure is expected to drop further.

Cegedim Dendrite estimates that DTC spending cuts will be 10% higher in 2009 than in the preceding year.

According to the study, the percentage of marketers who say they will decrease their DTC spending rose to 58% in 2009, up from 28% in 2008.

The decrease in spending would be due to budget cuts and a shift to more targeted direct-to-patient efforts.

Reasons that DTC Marketing Spending Will Decrease in 2009 According to US DTC Pharmaceutical Marketers (% of respondents)

Advertising agencies will be affected: 68% of ad executives believed DTC spending would decline. Consultants and other vendors were nearly as bearish. Only manufacturers were more neutral than negative.

Change in DTC Marketing Spending in 2009 According to US DTC Pharmaceutical Marketers, by Sector (% of respondents)

In addition, 55% of marketers felt DTC’s effectiveness had decreased from 2008.

Effectiveness of DTC Marketing in 2009 According to US DTC Pharmaceutical Marketers (% of respondents)

What are marketers doing to adapt?

As Cegedim analysts wrote, “Budgetary challenges of 2009 will lead to more experimentation.” That will include increased usage of loyalty cards, rebates and coupons—which are less expensive and proved effective. A majority of pharmaceutical marketers also plan to invest more in e-mail, Website development and keyword search.

While not a cure-all, an injection of digital marketing could help ease the pharmaceutical industry’s ills.

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