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Direct to Consumer (DTC) Advertising in Pharmaceuticals - Shift from Traditional Mass-Media Platforms towards Personalization via Online and Social Media

Executive Summary

#MedicationMarketing: How the Pharma Industry is Using Social Media to Sell.

A multi-billion dollar industry that's banned in all but the US and New Zealand, Direct-to-Consumer (DTC) pharmaceutical marketing is beginning to embrace social media, explains the latest report by international business experts GBI Research.

According to the report*, the pharmaceutical marketing industry is adapting strategies to take advantage of sites such as Twitter and Facebook, including the tailoring of campaigns to specific medications and interacting directly with consumers.

Online advertising has many advantages over traditional means, by no means the least of which is the relatively low expense. In 2006, over $5 billion was spent on DTC advertising, mainly on the most costly medium - television. As pharmaceutical firms tighten their belts, cheaper online advertising has allowed pharmaceutical advertisers to maintain a campaign presence.

Although marketing via social media can be risky, its rewards are becoming increasingly well known. Though online discussions may raise adverse product testimonials, companies are given the opportunity to answer questions, ease concerns and respond quickly to shifts in public sentiment.

The open nature of the online community can also be tremendously beneficial for product promotion. A friend's recommendation is trusted by 90% of people and 70% trust consumer opinions posted online (Google, 2011a). Accordingly, positive word of mouth can be more effective than typical methods of DTC advertising.

The success of online DTC marketing can also be measured much more easily. Advertisement clicks, Facebook 'likes' and Twitter mentions can all be monitored and without difficulty and aid in the creation of bespoke campaigns.

Marketing companies understand that different demographics access and utilize media in different ways, and the capability to learn how different groups respond to advertising is becoming a key tool in the formation of future marketing projects.

DTC pharmaceutical adverting is only legal in the US and New Zealand, although firms often employ unbranded awareness campaigns in other countries, but without specific drug information.

Direct to Consumer (DTC) Advertising in Pharmaceuticals - Shift from Traditional Mass-Media Platforms towards Personalization via Online and Social Media

This report provides insights into the up-and-coming trends of DTC advertising in the US and of awareness campaigns in Europe. It also provides an in-depth analysis of the types of marketing channels available to pharmaceutical marketers.

This report was built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GBI Research's team of industry experts.

Abstract

Direct to Consumer (DTC) Advertising in Pharmaceuticals - Shift from Traditional Mass-Media Platforms towards Personalization via Online and Social Media

Summary

GBI Research, the leading business intelligence provider, has released its latest research, "Direct to Consumer (DTC) Advertising in Pharmaceuticals - Shift from Traditional Mass-Media Platforms towards Personalization via Online and Social Media", which provides insights into the up-and-coming trends of DTC advertising in the US and of awareness campaigns in Europe. The report provides an in-depth analysis of the types of marketing channels available to pharmaceutical marketers. In particular it focuses on how pharmaceutical marketers can make the most of digital media channels, including online advertising and social media.

The report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research's team of industry experts.

In 2006, over $5 billion was spent on DTC advertising, most of it on the most expensive medium, television. Since then, DTC expenditure has decreased. This is due to a number of reasons, notably the emergence of new media for advertising. Since advertising moved onto the internet, there have been many developments which have revolutionized the way that products are promoted. Pharmaceutical companies were slow to move their advertising online but are now beginning to use it to their advantage. The internet has proven itself to be one of the most cost-effective forms of advertising; full campaigns can be run for the price of one television advertisement.

Social media is another risky yet rewarding method of promotion that pharmaceutical companies are beginning to explore. Through social media, consumers expect to be able to have a public conversation with the representatives of a brand; consumers will always expect their questions to be answered and will not hesitate to discuss adverse effects and any other problems that they consider to be the fault of a brand. However, through social media, pharmaceutical companies have an opportunity to improve their brand image through their responses to these enquires. Another huge advantage of social media is the sharing between friends and peer groups that it enables. A recommendation from a friend is trusted by 90% of people and 70% trust consumer opinions posted online (Google, 2011), so campaigns that are spread between friends by word of mouth can be more effective than traditional methods of widely broadcast DTC.

Scope

  • Data and analysis of traditional media channels and newer channels such as online and mobile platforms.
  • Suggestions of how the ROI (return on investment) of a social media campaign can be measured.
  • How to target a campaign to appropriate audiences by altering the media mix.
  • Examples of successful and violative campaigns.
  • Examples of pioneering use of online media channels.
  • How DTC advertising techniques can be transferred to unbranded campaigns in countries where DTC is not permitted.

Reasons to buy

  • Understand how DTC advertising has changed over the last decade.
  • Develop the use of 'new' media types such as social media and mobile.
  • Create a more tailored advertising campaign designed to reach a targeted audience.
  • Develop key strategic initiatives by understanding the way that patients use different media.
  • Accelerate the delivery of marketing messages through word-of-mouth communication.

TOC

1 Table of Contents

1 Table of Contents 5

  • 1.1 List of Tables 6
  • 1.2 List of Figures 7

2 Direct to Consumer (DTC) Advertising in Pharmaceuticals -Introduction 8

3 Direct to Consumer (DTC) Advertising in Pharmaceuticals - Media Types 11

  • 3.1 Traditional Media Types 13
    • 3.1.1 Television 13
    • 3.1.2 Print 17
    • 3.1.3 Other 18
  • 3.2 Online and Social Media 18
    • 3.2.2 Advertisement Placement 20
    • 3.2.3 Twitter 21
    • 3.2.4 Facebook 27
    • 3.2.5 YouTube 27
  • 3.3 Mobile 28
    • 3.3.1 The Importance of a Mobile-enabled Website 28
    • 3.3.2 Applications 28
  • 3.4 Managing Media Types 29
    • 3.4.1 Increasing and Measuring ROI of Social Media 29
    • 3.4.2 Choosing the Correct Media Mix 36

4 DTC Advertising in the US 39

  • 4.1 Introduction 39
    • 4.1.1 History of DTC in the US 39
    • 4.1.2 Impact of DTC in the US 41
    • 4.1.3 Current DTC US Market 42
  • 4.2 FDA Regulations 44
    • 4.2.1 2011 'Guidance for Industry' - the FDAs Response to Social Media Use 44
    • 4.2.2 45-Day Ad Review 45
  • 4.3 Innovative Campaign Examples 46
    • 4.3.1 Lantus (Insulin Glargine) - Sanofi US 46
    • 4.3.2 Spiriva - Boehringer Ingelheim Pharmaceuticals Inc. 46
  • 4.4 Controversial Campaign Examples 47
    • 4.4.1 Copaxone (Glatiramer Acetate) - Teva Pharmaceutical Industries 47
    • 4.4.2 Victoza (Liraglutide [rDNA Origin] Injection) - Novo Nordisk A/S 49

5 European Union 51

  • 5.1 Introduction 51
  • 5.2 EU Regulations for DTC Advertising 51
    • 5.2.1 High Level Pharmaceutical Forum - A Move to Push Branded DTC Advertising in Europe 52
    • 5.2.2 EC Proposal on Restricted Branded Advertising - Possible Entry Point for DTC Advertising Penetration in the Continent 52
    • 5.2.3 Budget Cuts and National Health Services 53
    • 5.2.4 Awareness Campaigns 53
  • 5.3 Conclusion 54

6 Other Markets 55

  • 6.1 New Zealand 55
  • 6.2 Trans-Tasman Initiative 55

7 Conclusion 56

8 Key Takeaway 57

9 Appendix 58

  • 9.1 Market Definitions 58
  • 9.2 Social Media Definitions 58
  • 9.3 Abbreviations 59
  • 9.4 Sources 59
  • 9.5 Research Methodology 60
    • 9.5.1 Coverage 60
    • 9.5.2 Secondary Research 61
    • 9.5.3 Primary Research 61
    • 9.5.4 Competitive Landscape 61
    • 9.5.5 Expert Panel Validation 62
  • 9.6 Contact Us 62
  • 9.7 Disclaimer 62

List of Tables

1.1 List of Tables

  • Table 1: Direct to Consumer Advertising in Pharmaceuticals, Media Type Comparisons 12
  • Table 2: Differences in the US and Europe Healthcare System in the Context of DTC Advertising 51

List of Figures

1.2 List of Figures

  • Figure 1: Direct to Consumer Advertising in Pharmaceuticals, DTC Spend by Therapeutic Class,%, 2011 9
  • Figure 2: Direct to Consumer Advertising in Pharmaceuticals, Total Promotional Spending on Prescription Drugs, $bn, 1996-2011 10
  • Figure 3: Direct to Consumer Advertising in Pharmaceuticals , DTC Average Budget Allocation, DTC Expenditure on Top Three Media Types, %, 2010 11
  • Figure 4: Direct to Consumer Advertising in Pharmaceuticals, FDA Guidelines on DTC Marketing of Pharmaceuticals, 2009 14
  • Figure 5: Direct to Consumer Advertising in Pharmaceuticals, Factors Influencing Decrease in DTC Spending, 2007-2011 16
  • Figure 6: Direct to Consumer Advertising in Pharmaceuticals, Proliferation of Brand Message Through Word of Mouth 19
  • Figure 7: Direct to Consumer Advertising in Pharmaceuticals, Top 10 Most Visited Social Network Sites in the US, 2011 20
  • Figure 8: Direct to Consumer Advertising in Pharmaceuticals, Twitter Account Information - 15 Major Pharmaceutical Users 22
  • Figure 9: Direct to Consumer Advertising in Pharmaceuticals, Most Commonly Tweeted Topic for Pharmaceutical Accounts 23
  • Figure 10: Direct to Consumer Advertising in Pharmaceuticals, Tweet Topics - AstraZeneca's Tweet Chat, 2011 24
  • Figure 11: Direct to Consumer Advertising in Pharmaceuticals, AstraZeneca, Consumer Sentiment During Twitter Chat, 2011 25
  • Figure 12: Direct to Consumer Advertising in Pharmaceuticals, Tweet Topics - Shire's @ADHDSupport 26
  • Figure 13: Direct to Consumer Advertising in Pharmaceuticals, Types of YouTube Advertisement 28
  • Figure 14: Direct to Consumer Advertising in Pharmaceuticals, Campaign Reach 31
  • Figure 15: Direct to Consumer Advertising in Pharmaceuticals, Campaign Engagement 32
  • Figure 16: Direct to Consumer Advertising in Pharmaceuticals, Campaign Attention 33
  • Figure 17: Direct to Consumer Advertising in Pharmaceuticals, Campaign Positive Sentiment, % 33
  • Figure 18: Direct to Consumer Advertising in Pharmaceuticals, Social Media Promotion to Prescription 34
  • Figure 19: Direct to Consumer Advertising in Pharmaceuticals, Factors for Budget Allocation and Media Mix 36
  • Figure 20: Direct to Consumer Advertising in Pharmaceuticals, Percentage Change of National Health Expenditure, 1970-2010 41
  • Figure 21: Direct to Consumer Advertising in Pharmaceuticals, US DTC Spend by Company, $m, 2011 42
  • Figure 22: Direct to Consumer Advertising in Pharmaceuticals, Percentage Change in US DTC Spend by Company, 2010 - 2011 42
  • Figure 23: Direct to Consumer Advertising in Pharmaceuticals, US DTC Spend by Brand, $m, 2011 43
  • Figure 24: Direct to Consumer Advertising in Pharmaceuticals, Percentage Change in US DTC Spend by Brand, 2010-2011 43
  • Figure 25: Direct to Consumer Advertising in Pharmaceuticals, Team Copaxone Campaign - Regulation Breaching Statements 48
  • Figure 26: Royal Pharmaceutical Society of Great Britain on EU Proposal to Allow Restricted Branded DTC Advertising 53
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