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Kantar Media participated in an exclusive webcast as part of the ARF’s webcast series. Date: October 26, 2011 Presenters: Richard Fielding - Chief Client Officer, Kantar Media North America Beth Snyder Bulik - Reporter, Advertising Age The webcast is a state-of-the-industry overview of trends in pharmaceutical marketing. It's been about 15 years since DTC advertising restrictions were loosened and the marketing of prescription drugs went from $0 to a $4 billion industry. This webcast examined the advertising and marketing trends over the past few years, where are we now, and what the future might hold, including: - Healthcare reform and its potential impact - Pharmaceutical advertising trends and marketing on the web and in social media - The rise of retail pharmacies in the marketing chain
Citation preview
Pharmaceutical Marketing: State of the Industry in 2011
October 26, 2011
www.KantarMediaNA.com © 2011 Kantar Media 1
Today’s Agenda
1. Ad Spending: 15 Years of DTC
2. Pharmaceutical Ad Spend Changes
3. The Role of Traditional Media
4. Web Marketing Challenges: Building a Direct Consumer Relationship
5. Social Media & Health
6. Pharmacies & Pharmacists
© 2011 Kantar Media www.KantarMediaNA.com 2
Ad Spending: 15 Years of DTC (Direct-to-Consumer)
© 2011 Kantar Media www.KantarMediaNA.com 3
4
Pharmaceutical Marketing in Flux
• Rise of digital
• Rise of social media channels
• Evolving regulatory environment
• Maturing of mainstream blockbuster drugs
• Fewer new drugs brought to market
© 2011 Kantar Media www.KantarMediaNA.com
An Industry in Massive Transition
• Transition from broad-based to
targeted therapies
• Health-care standalone agencies are
now being broadened into wider agency
networks
5 © 2011 Kantar Media www.KantarMediaNA.com
6
Change Means New Opportunities For Pharmaceutical Marketing
• Globalization
• Personalized medicines & therapies
• Potential for niche drugs
• Diversification into broader health-care
portfolios
• Broader healthcare communications
© 2011 Kantar Media www.KantarMediaNA.com
Pharmaceutical Media Spending: 15 Years of DTC
1997 – 2006: Explosion of Pharmaceutical
1997
“Brief summary” (often
not so brief) of side
effects was required to
be included when a
brand was named in a
pharma ad
Direct-to-consumer advertising
regulations were loosened
FDA guidance introduced: TV ads
allowed to name pharma brand without
summary, but must include “major
statement” of important risks with
referral to source
FDA guidance
formally adopted
Explosion of DTC! Ad spending by pharmaceutical
marketers increased from $700 million in 1996 to $5.4
billion in 2006
1999 2006
7 © 2011 Kantar Media www.KantarMediaNA.com
Pharmaceutical Media Spending: 15 Years of DTC
1996 – 2006: Explosion of Pharmaceutical Marketing
8 © 2011 Kantar Media www.KantarMediaNA.com
Pharmaceutical Media Spending: 15 Years of DTC
1997 – 2006: Explosion of Pharmaceutical
Ad spending by
pharmaceutical
marketers peaked
at $5.4 billion
Spending declined every year to $4.3 billion in 2010, a 20%
decrease over 5 years.
2006 2010
Ad spending by
pharmaceutical
lowers to $4.3
billion
2009
Spending
dropped by
8.8% between
2009 and 2010
© 2011 Kantar Media www.KantarMediaNA.com 9
Pharmaceutical Media Spending : 15 Years of DTC
2006 – 2010: Pharmaceutical Marketing Declines
10 © 2011 Kantar Media www.KantarMediaNA.com
Pharmaceutical Ad Spend Changes
© 2011 Kantar Media 11 www.KantarMediaNA.com
• Consumer skepticism has INCREASED↑
• Heavily marketed drugs on market have DECREASED↓
• New drugs entering market have DECREASED↓
• Consumer spending has DECREASED↓
• Pharmaceutical marketing spending has DECREASED↓
Blockbuster and heavily marketed drugs are losing their patents and going generic:
12
Ad Spending Changes
Pharmaceutical Marketing Spend Decreases
© 2011 Kantar Media www.KantarMediaNA.com
Top 10 Pharmaceutical Advertisers
Pharmaceutical Marketing Spend Decreases
13 © 2011 Kantar Media www.KantarMediaNA.com
Pharmaceutical Ad Spending by Category 2010
14 © 2011 Kantar Media www.KantarMediaNA.com
15
Top 10 Most Advertised Prescription Drugs
© 2011 Kantar Media www.KantarMediaNA.com
16
Imperative to Create Brand Value Changing Along With the Industry
• Health industry is changing →
pharmaceutical marketing must change
• Pharmaceutical companies must create
value with:
– More targeted innovation & fewer big
breakthroughs
– Drugs that deliver smaller, measurable benefit
– Less spending
© 2011 Kantar Media www.KantarMediaNA.com
Proactive Health
Serving the Consumer
• Pharmaceutical marketers must…
– target patients with specific needs
– find innovation in niche audiences (e.g.
cancer treatments)
– play a role in advising and helping the
consumer
17 © 2011 Kantar Media www.KantarMediaNA.com
18
Regulatory Environment
A Challenge to Pharmaceutical Marketing
• Additional pharmaceutical marketing challenges stem from
federal regulations
– Research, development, testing, and marketing of drugs are all regulated
– However, there is a lack of real FDA digital marketing guidelines
• Affordable Care Act: President Obama’s healthcare reform act
– Government influence on RX drugs has increased
– Need to reach 30 million new prescription drug consumers who were
previously uninsured
– New annual taxes on pharmaceuticals
© 2011 Kantar Media www.KantarMediaNA.com
• Previous DTC focus has been on physicians
• However, the healthcare Industry has become customer-centric
• Pharmaceutical industry must transition from marketing to physicians to marketing
directly to consumers on the Internet
19
Regulatory Environment
A Need to Embrace Digital
Marketing to physicians Via expensive media channels
Marketing to consumers Via economical digital channels
© 2011 Kantar Media www.KantarMediaNA.com
The Role of Traditional Media
© 2011 Kantar Media 20 www.KantarMediaNA.com
Pharmaceutical Advertising
Current Media Landscape
21
Traditional media will survive
© 2011 Kantar Media www.KantarMediaNA.com
• Consumer reach via TV, magazines and journals will remain essential
• However, their function will change
• The focus must shift to appropriate use, continued use, & compliance
Traditional Media
The Evolving Role of Television & Print Pharmaceutical Advertising
22 © 2011 Kantar Media www.KantarMediaNA.com
Television: Commercial Tuneaway
How Well Do Pharmaceutical TV Ads Retain Viewers?
• Channel changing occurs most with anti-smoking, impotence and anti-depression
drug ads, with 6% of the audience tuning out
• Average tuneaway for all commercials = 3%
23 © 2011 Kantar Media www.KantarMediaNA.com
Television: Commercial Tuneaway
How Well Do Pharmaceutical TV Ads Retain Viewers?
• Average tuneaway for all commercials = 3%
• Wrinkle removers (2.2%) and stomach medications (2.5%) are the only
medications to beat the tuneaway average, with the smallest percent of the audience
changing the channel
24 © 2011 Kantar Media www.KantarMediaNA.com
Television: Commercial Retention
Pharmaceutical Marketers Struggle To Retain Viewers
25
• Retention is better if viewers have a condition or know someone who does
• Industry average is 95%
• Osteoporosis and overactive bladder commercials have the best retention
• Contraceptive and eye-lash growing ads have the worst retention
© 2011 Kantar Media www.KantarMediaNA.com
Web Marketing Challenges:
Building a Direct Consumer Relationship
© 2011 Kantar Media 26 www.KantarMediaNA.com
27
Web Marketing Challenges
Healthcare Online Presence
• Medical online presence
– 57% of online population turns to Internet as
1st mode of research
– 82% of people deem access to online health
information as “critical”
– Physicians and hospitals rely on the Internet
for research and marketing purposes
© 2011 Kantar Media www.KantarMediaNA.com
• Despite the healthcare industry’s online presence, the pharmaceutical online
presence is small
• Some pharmaceutical marketers experiment, most stick to drug R&D
• Marketers are concerned about:
– violating regulations that could lead to FDA sanctions
– appearing too aggressive to consumes
– crossing privacy lines
– their lack of experience in digital marketing
– Adverse Event Reporting System
28
Web Marketing Challenges
The Cautious Pharmaceutical Industry
© 2011 Kantar Media www.KantarMediaNA.com
29
Web Marketing Challenges
Delicacy of Pharmaceutical Marketing
Adverse Event Reporting System
• Intended to monitor negative effects
attributed to RX drugs
• Pharmaceutical marketers mandated to
report adverse event
• Marketers fear that web communications
(e.g. blog postings and comments to a
social media page) could fall under this
mandate
© 2011 Kantar Media www.KantarMediaNA.com
30
Pharmaceutical Sites Cautiously on the Sidelines
Lack of Digital Guidelines
• No official FDA guidelines
• No shortcuts for communicating risks
• Offline rules don’t always translate to
online
© 2011 Kantar Media www.KantarMediaNA.com
• Despite the challenges, some pharmaceutical companies attempt to connect in the
social media space
AstraZeneca on Twitter Boehringer Ingelheim on Facebook
Web Marketing Challenges
Small Pharmaceutical Online Presence
31 © 2011 Kantar Media www.KantarMediaNA.com
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Largest Pharmaceutical Internet Display Advertisers
Internet Display Spend: A Small Piece of the Pharmaceutical Pie
• In 2010, $203 million was spent on pharmaceutical Internet display advertising, out
of a total $4.3 billion (4.7%)
• Pfizer spent only 2.8% of its advertising in digital
• 4 out of the top 5 pharmaceutical display advertisers decreased their Internet display
ad spend from last year
© 2011 Kantar Media www.KantarMediaNA.com
• Majority of consumers visit non-branded sites
liked WebMD
– According to Kantar Media Compete, only 4.2% of
unique visitors to cancer websites were to branded
sites in Q4 2010
• Quality amount of time is spent on prescription
drug websites like Humalog.com
Time Spent on Prescription Drug Websites
33 © 2011 Kantar Media www.KantarMediaNA.com
Maneuvering the Digital Landscape
Drug Companies Must Be Creative
Companies must go beyond the obvious:
• Johnson & Johnson’s created an online tool for its Realize gastric band
• Encourages treatment adherence
34 © 2011 Kantar Media www.KantarMediaNA.com
Social Media and Health
© 2011 Kantar Media 35 www.KantarMediaNA.com 35
36
Web & Social Media Are Future For Pharma
Pharma Behind the Digital Curve
• Pharma marketers must find a way to
connect with consumers via the Internet
and social media
• Two key web issues
– Privacy
– Brand Safety
© 2011 Kantar Media www.KantarMediaNA.com
• Social media provides Insights into positioning, consumer response & targeting
• However, according to Kantar Media Cymfony data, only 1% of conversations
mention DTC ad campaigns across therapeutic areas
• Blog & forum negativity:
– Posts mention negative side effects in DTC branded campaign mentions
• Discussion of general conditions is greater than discussion of brands
– Only 8% of diabetes forums posts are
branded discussion
Social Media Share of Discussion
“Unbranded” Medical Discussions
37 © 2011 Kantar Media www.KantarMediaNA.com
Diabetes-Related Brand Names Mentioned In Forums
“Unbranded” Medical Discussions
38 © 2011 Kantar Media www.KantarMediaNA.com
Pharmacies & Pharmacists
© 2011 Kantar Media 39 www.KantarMediaNA.com
Pharmacies
The Hub of American Healthcare
40
• Americans submit almost 4 billion drug
prescriptions each year
• Vast majority of these prescriptions are
filled at pharmacies
• Pharmacy = place of high consumer
interaction, creating a unique opportunity
to interact with customers
• People make more trips to the pharmacy
than their doctor
© 2011 Kantar Media www.KantarMediaNA.com
• Patients are taking on more decision-
making
• Aging population is taking more drugs
• Rise of generic drugs leads to rise of
consumer confusion
• Pharmacists are “Medication Therapy
Experts”
• 82% of people say they buy the over-the-
counter drug recommended by their
pharmacist
Pharmacists
Consumers Rely on Pharmacists More Than Ever
41 © 2011 Kantar Media www.KantarMediaNA.com
• Helping customers understand the evolving healthcare world
• Establishing trust in customers
– “With us, it’s personal” - Rite Aid
– “Ask me about anything” - Target
• Pharmacists balance private advantages with health advantages
42
Aggressive Campaigns
Being Proactive: Helping Customers Stay Healthy
TOP 5 RETAILERS
IN PHARMA AD SPEND
2. CVS Caremark Corp. ↓
4. Rite Aid Corp. ↑
1. Walgreen Co. ↑
3. Walmart Stores ↓
5. Target ↑
© 2011 Kantar Media www.KantarMediaNA.com
Baby Boomer Caregivers on the Rise
Drugstore Visits Increase
43
• With an aging population and chronic conditions which require medication, caregivers
are on the rise and are taking on more decision making
• According to Kantar Media’s 2011 MARS OTC/DTC study, the number of caregivers
researching medical information has increased by 45% in 2011
© 2011 Kantar Media www.KantarMediaNA.com
Top 10 Prescribed Pharmaceuticals
44 © 2011 Kantar Media www.KantarMediaNA.com
This pharmaceutical analysis was
completed by AdAge using Kantar Media
data. If you’re interested in an analysis for a
different vertical, please contact us.
Thank You
© 2011 Kantar Media www.KantarMediaNA.com 45
To discuss any particular data point or a specific analytics capability, please contact our team:
www.KantarMediaNA.com
46
© 2011 Kantar Media www.KantarMediaNA.com