Will DTC Spending overtake DTP promotional spending?
According to IMS Health DTC spending in 2005 was $4.2 billion while DTP spending was $7.2 billion. Although a majority of dollars are still being allocated to DTP spending DTC has been growing by leaps and bounds. Although my colleague John Mack in his Pharma Marketing Blog thinks that DTC advertising will overtake DTC I don't think that will happen
I believe that some drugs may launch with huge DTC budgets of $100 million or more but that will be an exception rather than a standard. There is just too much inefficiency in mass media to justify those types of budgets. TV costs are increasing at a time when marketers are questioning its effectiveness in driving brand objectives. Just look what happened in the ED wars. There was a time when Cialis, Levitra and Viagra commercials were all over TV, now they are far and few between. Other brands like Enbrel, and their horrible DTC spot with lethal side effects, don't have the dollars to sustain a heavy DTC media plan.
Why is this happening? Because in the phrama
matrix business environment every dollar that you
want has to be justified with an ROI model. It's
getting tougher for marketers to justify huge
budgets when share stays flat or only rises a
couple of points. In addition there is ongoing
research that shows that patients still rely on
their physicians recommendations for medications.
I think that we will also see a shift in media
spending to more efficient channels like the
Internet. The Web can reach more people at a
better cost effective model and it's easy to
measure the impact of the dollars
spent.
DTP
spending growth will level out in the near future
for several reasons. First, pharmaceutical
companies are reducing the size of their sales
force. They have come to realize that they can't
have 3 reps calling on the same doctor.
Physicians are also too busy to see sales reps
these days. The average time with a
pharmaceutical sales rep continues to decline and
more and more physicians are using eCME or
eDetailing to get information on new
pharmaceutical products. Finally the pharma
industry is going to have to think about the reps
that they recruit. Most are right out of college
and go through training that teaches them the
best way to "pitch" the product. If a HCP wants
to talk to someone in depth about the compound he
or she usually has to find a medical liaison
person who more often than not does not have the
information the HCP wants.
DTC
advertising will continue to play an important
role in the brand mix but marketers are going to
have to learn to do more with less. Today's time
pressed consumers just don't have the time to sit
through your message anymore and it's going to
get harder to cut through the clutter with
relevant messages. Still there are some marketers
that will continue to think in "old school"
marketing and request a huge media budget to
launch new products but when the numbers roll in
share had better be tied to the dollars that were
spent.