The difficult economic environment of the past 18 months has forced many pharma companies to reexamine their shrinking advertising budgets and make best use of the resources that remain. Sandra Peterson, president of the Bayer Medical Care unit of Bayer HealthCare, notes that Bayer HealthCare recently announced a consolidation of all global marketing services support with two agencies, a move that the company expects will save 10% over the next 18 to 24 months while significantly improving the quality and effectiveness of all communications, including digital. “With the consolidation of our global marketing and media services, Bayer HealthCare has an opportunity to take integrated marketing to a new level, linking all classes and media types with consistent FDA-compliant messaging," she says. While traditional media still accounts for a large share of pharmaceutical advertising budgets, the online media component is growing fast, and industry leaders expect it to eclipse traditional advertising in the next few years. “As information delivery through these new communications mediums becomes increasingly common, there is likely to be a permanent shift in how we prioritize our advertising budgets and focus," says Greg Barrett, VP, marketing, at Daiichi Sankyo Inc. “Consumers are increasingly getting and sharing health-related information online, and since our goal is to ensure our customers understand the information we need to convey, resources should be applied toward the medium that will resonate best with the target audience for individual products." “The world and the media environment in which we operate are rapidly changing, and the use of online outlets is contributing to these changes," Ms. Peterson agrees. “Not just among pharmaceuticals, but across healthcare more and more advertising and promotion efforts are designed for new media." Anshal Purohit, VP, strategic development, at Purohit Navigation, says while pharmaceutical companies generally recognize the importance of uniform messaging that is on strategy and true to brand positioning they may be uncertain as to how to ensure consistency across channels, over time, in different countries, and to a diverse array of audiences including physicians, pharmacists, nurses, nurse practitioners, patients, etc. “As companies expand their presence in emerging markets, they face new challenges because not only do the target audiences differ greatly in terms of culture, language, etc, there are often several vendors executing brand strategy," she says. “Brand stewardship uses strategies and tactics to consistently manage the healthcare professionals’ and patients’ experience of the brand. It helps companies improve relationships with their customers and select the best times and methods for communicating with them." (For more information about The Art of Brand Stewardship, please turn to page ??) In addition to providing brand stewardship, another improtant factor for pharmaceutical companies to consider when selecting an agency to oversee a brand’s launch is its DNA. “To find a perfect agency partner, start by assessing its culture DNA,” says Al Topin, president of Topin & Associates. “Culture is the promise that an agency makes to its clients. What the company believes, follows, and does for a company and its brands are all embedded in the agency’s culture. It provides the operating instructions that determine how an agency responds to challenges and how decisions are made. Culture also creates the distinction that makes each agency unique or the same. To discover an agency’s culture DNA means looking beyond the fancy walls and instead checking the footprints they create and leave behind.” (For more information about What An Agency’s Culture Tells You About Its DNA, please turn to page ??) Linda Palczuk, VP, Sales & Marketing, for AstraZeneca Pharmaceuticals, says her company is shifting to more digital efforts as it strives to reach patients across a variety of channels. “It’s largely a function of where consumers are; they are going online with increasing frequency to get information about medicines," she says. Is DTC Still Relevant? Amid encouraging signs of an economic recovery, the pharmaceutical advertising spend is beginning to bounce back. According to TNS Media Intelligence, after a dismal first half in 2009, pharmaceuticals edged back into the top 10 in terms of advertising spend by category for the first nine months of 2009, increasing 0.6% to $3.48 billion from the same period a year earlier. While direct-to-consumer advertising likely is one of the drivers behind this increase, analysts don’t expect the DTC rebound to last for long, given the massive patent-expiration cascade that’s on the horizon. Recent studies indicate DTC drug ads may not be as effective as previously thought, and experts are predicting pharmaceutical companies may take their advertising dollars to the Web, where an increasing number of consumers are getting their media content. Despite its relatively small share of pharma’s overall marketing budget — about 14%, according to PricewaterhouseCoopers — DTC advertising has historically drawn the most scrutiny from regulators and consumer advocates. This mostly negative attention prompted the Pharmaceutical Research and Manufacturers Association (PhRMA) to release a set of guiding principles for DTC advertising in March 2009. Since then, almost all major pharmaceutical companies have adjusted their advertising policies and procedures to comply with the PhRMA principles. For example, Ms. Palczuk says AstraZeneca reviews its DTC ads with healthcare professionals and patients to make sure they are responsible and educational in tone and content, and that they clearly deliver a benefit/risk message. In addition, the company evaluates physician awareness and acceptance and seeks FDA input before airing new DTC broadcast ads. According to Mr. Barrett, the revised PhRMA guidelines and the downturn in the economy are only part of the story behind the changes in DTC advertising. “Companies have been scaling back on traditional DTC ads to refocus their efforts on more established or mature brands, through a wider range of media outlets," he says. Still, experts say DTC ads remain a critical implement in pharma’s marketing toolbox. “DTC advertising is important for the pharmaceutical industry, as it has been shown to foster conversations between patients and their healthcare providers," Mr. Barrett says. As is the case with DTC, professional advertising is increasingly moving from the printed page to the Web. Michael Walters, executive VP at Eurand, says his company has moved from a significant print journal spend to more novel sources, such as the online version of the same print journal. “With online media, we can actually track readership, click-throughs to the site, and other online metrics, such as measuring messaging on handheld devices, interactive e-details, online case studies, and so forth," he says. “Print advertising is just one component of a comprehensive advertising plan for a brand," Ms. Peterson observes. “To ensure the success of any brand, it is paramount to increase consistency across marketing disciplines, markets, and targets." Mr. Barrett believes that there will always be a role for print advertising, but that it will have to adapt as the communications landscape evolves. “Patients and healthcare professionals alike are increasing the time they spend seeking information online, and advertisers need to be where their customers are," he says. Regulation in the Digital Space In its first year under the Obama Administration, the Food and Drug Administration has made regulatory enforcement a priority across the board. But some in the pharma industry say the agency appears to be favoring a “shoot first, ask questions later" approach. This mentality is evident in the FDA’s initial attempts at policing the pharmaceutical industry’s digital advertising efforts. In March 2009 the FDA’s Division of Drug Marketing, Advertising, and Communications (DDMAC) issued warning letters to 14 drug companies objecting to their use of Google “sponsored links" because the brief text info given in the links named a drug in connection with a disease, but did not contain all of the detailed risk info relating to that drug — a requirement critics say is impossible to meet in the context of such limited space. Industry experts say this incident shows the FDA still doesn’t really grasp the concept of sharing information in the digital space. “The regulation of pharma advertising needs to fit the venue," Mr. Walters says. “At present, it appears FDA is applying traditional regulations to digital advertising, and thus limiting the utility of the information provided to the public." Pharma leaders acknowledge the FDA is making an effort to change its approach. In November 2009, the agency held a two-day public meeting to give pharmaceutical, advertising, and social media experts a forum to express their opinions and give recommendations as to how the FDA should regulate drug ads on the Internet. Suggestions ranged from PhRMA’s call for adopting a universal safety symbol for Internet content containing FDA-approved information about a medicine or medical device, to the drafting of new rules that would give pharma companies greater flexibility when advertising on the Web. “Based on the November hearings, it’s clear the FDA is aware that the situation is less than optimal and is looking to put forth more appropriate guidance and recommendations for advertisers in the future," Mr. Walters says. The FDA indicated that it will continue to accept public comments on the matter past the original deadline of Feb. 28, 2010. This extension means the agency is unlikely to take any sort of action on digital pharmaceutical advertising until the end of 2010 at the earliest, thus leaving pharma companies without any sort of digital advertising map in the meantime. “This is a difficult issue for all of us, as the Internet, unlike normal print or televised media, has unique limitations and restrictions such as space," Ms. Peterson says. “We appreciate the FDA’s efforts in addressing this Herculean task." Mr. Walters foresees changes in the regulatory climate as the FDA becomes more comfortable with advertising in the digital age “I believe the FDA will evolve its view of advertising so that this important mechanism for patients and physicians will become more useful and less tied to the old ways of evaluating marketing and promotion," he says. Looking for E-Direction This lack of consistent regulatory guidance has left pharmaceutical companies continuing to feel their way around the Internet. While a few drugmakers have been reaching out to patients via social networking sites such as Facebook and YouTube, overall the industry’s online presence trails those of other sectors such as retail, financial services, and computer makers. Incidents like the FDA’s Google links crackdown have made some pharmaceutical companies hesitant to fully embrace the Internet as the next advertising frontier. Data from comScore show that sponsored link exposures to U.S. Internet users declined 59% immediately after the FDA warning letters were issued, and plummeted 84% overall in the March-to-June 2009 period. (For more details on the comScore study, please turn to page ??.) Despite these uncertainties, most thought leaders agree that pharma companies need to be where their customers are — and where they are, in ever-increasing numbers, is on the Internet. “Patient-directed communications, online search and new media tools have transformed the world of communications and advertising, and that’s where we have to be to reach our customers," Mr. Barrett says. “These newer mediums give us the ability to reach people in a more targeted way, as the online health space consists of communities where people with specific conditions can share information or advice with others. With these factors in mind, it is essential that all forms of communication are considered in advertising planning." As part of its online strategy, Mr. Barrett says Daiichi Sankyo engages with experts, internally and externally, to ensure it remains compliant with the laws and regulations that govern such communication. The company subsequently educates employees on its communications principles and policies for the dissemination of information on its products. “This fast-evolving landscape requires new resources and new skills to participate effectively," he observes. In adiditon to its corporate Web site and blog, Ms. Palczuk says AstraZeneca has a presence on Twitter and YouTube and maintains both a corporate Facebook page and a Facebook page dedicated to Nexium. The company also is developing a sort of “one-stop shop" that will provide end users with RSS feeds for the company’s social media efforts. “The evolving world of social media is having a dramatic impact on the ability of organizations to engage with consumers," Ms. Palczuk says. “We not only want to be a part of the conversation about important health topics, but we also want to listen to what people are saying about the company, the industry, and most importantly, their health." John Nosta, executive VP and chief creative officer at Ferguson, part of CommonHealth, couldn’t agree more. “Today’s new model of communications has moved us away from the convention of a fixed, one-way message that’s pushed out to an audience," he says. “Control of information and the ‘journal ad’ have been replaced with managing the dialogue across media channels. Our audience seeks and finds information — some we send out, some comes from sources that are, at best, guided by our influence but, at worst, the result of rogue communications driving misinformation." (For more information about “crEativity in thE nEw world ordEr!," please turn to page ??) Ms. Peterson says social networking sites have rapidly gained importance in the marketing mix and likely will increasingly factor into future advertising plans. “Use of next-generation online media to promote healthcare products is still a work in progress, and best practices continue to evolve," she says. Mr. Walters says use of social media is effective when applied in a way that’s appropriate to the brand and the target audience. “For example, due to concerns of transmission of different strains of Pseudomonas, patients with cystic fibrosis are highly discouraged from meeting with one another and typically have little personal contact," he explains. “But through social media outlets — and they have many specific outlets — they can visit and gain the support others might find from having a coffee with a friend." However, Mr. Walters cautions against wholesale implementation of social media. “For other brands and target audiences, I don’t believe they provide any value, and including them in a plan becomes little more than following the latest trend," he says. Buddy Scalera, VP, interactive content and market research, Qi, part of CommonHealth, agrees that marketers have to proceed with an appropriate level of caution. “The marketing challenge is even more daunting in our industry," he says. “What works for mainstream consumer brands often doesn’t make sense for pharmaceutical brands. But that’s not to say that we’re not using new technology. There are pharmaceutical brands on Facebook, YouTube, Twitter, and other new media channels." (For more information about how Marketing Techniques Evolve with New Technology, please turn to page ??) Connecting with Next-Generation Consumers A recent study by social music television network Akoo found that traditional 30-second TV commercials, when integrated within an interactive, social TV programming environment, often outperform broadcast TV equivalents in brand metrics such as recall, consideration, and purchase intent. The study focused on product categories that appeal to younger, more tech-savvy demographics, including gaming consoles, quick-service restaurants, and mobile broadband service providers. Experts advise the pharmacetical industry to pay attention to these trends, given that the young consumers of today will become their target audiences of tomorrow, and these wired consumers are much less likely to be moved by pharma’s traditional print and TV advertising formats. “I suspect that as the population continues to age, the transition from print to online information sources will evolve to the point where print information sources are viewed as outmoded, and of minimal value in daily physician practices," Mr. Walters says. Mr. Barrett sees mobile marketing and online advertising as presenting the most exciting opportunities to connect with patients and healthcare professionals in real time. “This shift in the delivery of communications will ultimately benefit patients, as we are able to be more targeted in our messages than with traditional DTC magazine and television ads," he says. Ms. Palczuk notes that pharma advertising can already be seen throughout various digital venues, including traditional health sites such as WebMD, social networks like Facebook and YouTube, and mobile formats. “Pharma advertising has evolved as customer habits have evolved," she adds. “Our goal is to surround our customers with useful information, tools, and services that will help enable them to make good healthcare choices and stay informed on healthcare issues." “We believe a global viewpoint and a global brand voice will be key in the future, and our marketing services initiatives will help us stay ahead of the curve," Ms. Peterson says. “With increased consistency across marketing disciplines, markets, and targets we’ll be able to deliver more effective and creative work in more markets, more quickly." Bob Doyle, VP, consumer insights and marketing effectiveness, at SDI, says multicultural marketing has been discussed in pharmaceutical circles for years; however, most companies have yet to fully realize the potential of an integrated, patient-level multicultural approach. “While primary market research can be valuable in planning a multicultural campaign, marketers cannot rely on it to reach the level of granularity required to answer the types of questions needed in the planning process," he says. “Today, de-identified patient data offer important new insights that can provide the basis for comprehensive multicultural targeting. By joining HIPAA-compliant, de-identified healthcare data with consumer demographic and psychographic information, marketers can now look at the actual healthcare experiences and behaviors of millions of patients by their ethnicity. This type of analysis identifies key opportunities and lays the foundation for refinement of campaign messaging, forecasting, ad placement, and other tactical interventions." (For more information about Leveraging De-identified Patient Data to Drive Multicultural Marketing, please turn to page ??) Mr. Walters anticipates that the pharmaceutical advertising model of the future will rely increasingly on non-personal selling and delivery of information tailored to fit with each customer’s wants and needs. “Leaders, not followers, and the rational use of different venues are traits that I believe will separate pharmaceutical companies as we look to the future," Mr. Walters says. Other shifts to the model are expected, many of which have already begun. According to David Grewcock, senior VP, management supervisor, at Wishbone/ITP Inc., pricing pressures and the fact that many top-selling brands are nearing their life-cycle “cliff" often mean lower marketing budgets, smaller marketing teams, and a reduced investment in some brand support functions. “This is being driven by the need to continue to grow the bottom line as the top line flattens out," he says. “Smaller brand teams are expected to handle the same — or even more — project workload. In today’s world, brand managers work more hours and have far less time to spend on other things. It’s the norm for a brand manager to barely have time to squeeze in lunch. We need to recognize this, adapt and, more importantly, find ways to help ease their load. The way to build solid relationships with clients in the current environment is to produce high-quality work and respect what little time they have." (For more information about Adapting to Today’s Pharmaceutical Marketing Dynamic, please turn to page ??) PharmaLinx LLC, publisher of the VIEW, welcomes comments about this article. E-mail us at [email protected]. While traditional media still accounts for a large share of pharma ad budgets, the online media component is growing fast, and industry leaders expect it to eclipse traditional advertising in the next few years. Advertising In the Digital Age As physicians and patients continue their migration to digital media, experts say pharmaceutical advertising must follow, or risk becoming irrelevant. As information delivery through these new communications mediums becomes increasingly common, there is likely to be a permanent shift in how we prioritize our advertising budgets and focus. Greg Barrett Daiichi Sankyo Inc. GREG BARRETT. VP, Marketing, Daiichi Sankyo Inc., the U.S. subsidiary of Tokyo-based Daiichi Sankyo Co. Ltd., a global pharmaceutical company focused on the discovery and development of therapies for cardiovascular diseases, infectious diseases, cancer, bone and joint diseases, and immune disorders. For more information, visit dsi.com. n LINDA PALCZUK. VP, Sales & Marketing, AstraZeneca, a biopharmaceutical company primarily focused on the discovery, development, and commercialization of prescription medicines for a broad range of diseases. For more information, visit astrazeneca-us.com. n SANDRA E. PETERSON. President, Bayer Medical Care unit of Bayer HealthCare LLC, a provider of animal health, consumer care, medical care, and pharmaceutical products. For more information, visit bayerus.com. n MICHAEL J. WALTERS. Executive VP, Eurand N.V., a specialty pharmaceutical company that develops, manufactures, and commercializes enhanced pharmaceutical and biopharmaceutical products based on its proprietary pharmaceutical technologies. For more information, visit eurand.com. The evolving world of social media is having a dramatic impact on the ability of organizations to engage with consumers. We not only want to be a part of the conversation about important health topics, but we also want to listen to what people are saying about the company, the industry, and most importantly, their health. On March 26, 2009, the Division of Drug Marketing, Advertising, and Communications (DDMAC) of the U.S. Food and Drug Administration (FDA) sent warning letters to 14 major pharmaceutical manufacturers identifying specific brands as being in violation of FDA fair balance guidelines. The letters stated that sponsored link advertisements for specific drugs were misleading due to the exclusion of risk information associated with the use of the drug. At the urging of the warning letters, many pharmaceutical companies temporarily removed their sponsored link ads for these identified brands, as well as many other brands not specifically mentioned in the letters. As a result, according to comScore research, sponsored link exposures for pharmaceutical brands experienced a dramatic decline as manufacturers redesigned their strategies to ensure compliance with the letters. An analysis of exposure to branded URLs within comScore’s data revealed that substantial declines occurred immediately following the letters. Sponsored link exposures dropped 59% from 10.5 million during the week ending March 29, 2009 to 4.3 million during the week ending April 5. Declines in sponsored link exposures not only occurred in the weeks immediately following the letters, but continued over the next several months, plummeting 84% overall from March to June. Vanity and unbranded link exposures also experienced a decline, on average, across brands during the same period, although these methods were not under scrutiny in the FDA letters. Unbranded sites, which give additional information on the condition and treatment but do not directly promote the brand drug, declined 35% in the March-to-June 2009 period to slightly more than one million exposures. Vanity URLs, which make no mention of a specific brand while generically describing a health condition, but then redirect to the brand or drug’s Web site, decreased 11% in June to 3.2 million average exposures versus March. Although the use of vanity and unbranded URLs saw growth for certain individual brands after the letters, the overall decline in vanity and unbranded URL exposures demonstrates that searchers for information on a specific treatment or drug brand may not find the health-related information they are searching for as readily as they did prior to the guidance. In a prepared statement detailing the study results, John Mangano, VP of marketing solutions for comScore, noted that the FDA letters changed not only how pharmaceutical manufacturers are marketing online, but what consumers are being exposed to when they search for health information. “Independent of what is happening on the regulatory front, we see continued increases in consumers turning to the Internet to research health conditions, treatments and drugs," Mr. Mangano says. “It is important that marketers and the FDA find a middle ground that meets the spirit of the FDA guidelines and is supportable in the various emerging online media." Source: comScore Inc. For more information, visit comscore.com. Pharma Reevaluates Search Engine Advertising Top Ten Advertising Categories Jan-Sep 2009 vs. Jan-Sep 2008 Jan-Sep 20091 Jan-Sep 20081 Rank Category (Millions) (Millions) % Change 1. Automotive $7,491.9 10,825.8 (30.8%) 2. Telecom $6,190.3 $6,168.6 0.4% 3. Financial Services $5,673.1 $7,439.1 (23.7%) 4. Local Services & Amusements $5,609.9 $6,599.4 (15.0%) 5. Direct Response $4,916.2 $5,586.5 (12.0%) 6. Miscellaneous Retail2 $4,751.0 $5,748.5 (17.0%) 7. Food & Candy $4,549.9 $4,653.8 (2.2%) 8. Restaurants $4,204.8 $4,309.1 (2.4%) 9. Personal Care Products $4,081.5 $4,495.0 (9.2%) 10. Pharmaceuticals $3,483.6 $3,462.7 (0.6%) TOTAL3 $50,952.3 $59,288.5 (14.1%) Notes: 1 Figures do not include FSI or PSA activity. 2 Miscellaneous Retail does not include these retail segments: Department Stores, Home Furnishing/Building Supply Stores. 3 The sum of the individual categories may differ from the total due to rounding. Source: TNS Media Intelligence. For more information, visit tns-mi.com. n Social networking and social media continue to drive much of the innovation occurring around the Internet today. A critical challenge remains the ability to effectively harness the marketing intelligence inherent in the way people communicate and interact with one another through the digital medium and make it actionable. Even as new capabilities emerge that leverage the “social" value of the medium, it is worth remembering that this channel can already deliver substantial reach for ad campaigns, and despite low click-through rates there is measurable view-through value from these ads. n The U.S. search engine market saw significant innovation from the core engines in 2009, with growth of Microsoft’s Bing engine promising to make the market more competitive. The trends to watch in 2010 include increased integration of real-time (i.e., Twitter) and vertical-specific search results as the engines seek to both improve the user experience and move the consumer more efficiently down the decision funnel. n Online video continues to capitalize on the continued increase in media fragmentation, consumer-generated content, and a rising generation of consumers very comfortable using their computers as primary or secondary entertainment devices. As this market has emerged, higher-quality video and more seamless integration of video ads are emerging and adding value to the digital advertising market, to the benefit of both advertisers and publishers. n The digital display advertising market is innovating on several fronts right now, including the emergence of new ad units that promote higher engagement, cutting-edge ad targeting techniques, the development of niche audience ad networks, and the increasing popularity of online ad exchanges to buy and sell inventory. Each of these developments is contributing to the improved allocation and effectiveness of digital ad campaigns. Marketers must maintain a critical eye on the performance of their campaigns, in relation to how both digital media and traditional media components are performing. n Mobile web usage is expected to surge as the plethora of new smartphone models reaching the market in 2009 propels a rapid increase in market penetration of these devices. As more consumers turn to their mobile devices for consuming content and managing their digital lives, there is significant opportunity for innovators to deliver new value to consumers in how they use these devices. The development of mobile applications across new platforms also presents new business opportunity and monetization potential for publishers and developers alike. Source: comScore Inc., The 2009 U.S. Digital Year in Review. For more information, visit comscore.com. Extremely Very Fairly Minimally Not Important Important Important Important Important Creative 56.3% 33.3% 10.4% .0% .0% Strategy 47.9% 50.0% 2.1% .0% .0% Reputation 25.0% 33.3% 31.3% 4.2% 6.3% Relevant Experience 35.4% 43.8% 20.8% .0% .0% Organizational Structure 8.3% 10.4% 35.4% 35.4% 10.4% Past Success in Similar Campaigns 18.8% 47.9% 20.8% 10.4% 2.1% Technological Sophistication 27.7% 48.9% 23.4% .0% .0% With online media, we can actually track readership, click-throughs to the site, and other online metrics, such as measuring messaging on handheld devices, interactive e-details, online case studies, and so forth.
