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

Document Sample
Direct to Consumer (DTC) Advertising in Pharmaceuticals - Shift from Traditional Mass-Media Platforms towards Personalization via Online and Social Media Powered By Docstoc
					Direct to Consumer (DTC) Advertising in
Pharmaceuticals
Shift from Traditional Mass-Media Platforms towards Personalization via
Online and Social Media
GBI Research Report Guidance




                                              GBI Research Report Guidance
                                              The report mainly discusses the most important features of new multi-channel DTC and how to manage
                                              these new media from a marketing perspective.
                                              ·     The report begins with an executive summary that captures the key takeaways from the report.
                                              ·     In the first section, the report gives background information on all major media types available to
                                                    marketers.
                                              ·     In the next section, the report talks about the FDA’s guidance and responses to these new media types.
                                              ·     The report also covers the developments in the DTC advertising market in Europe. The report also
                                                    covers the recent regulatory developments in the Europe for the DTC advertising market.
                                              ·     At the end, the report touches upon some of the major trends that are likely to shape the future
                                                    landscape for the DTC market in the US and the Europe.




  © GBI Research. This is a licensed product and is not to be photocopied                                                    GBIHC230MR / Published JUL 2012
                                                                                                                                                      Page 2
Executive Summary




                                              Executive Summary
                                              DTC Expenditure has Changed Dramatically since 1996
                                              DTC (direct-to-consumer) advertising of prescription drugs has changed since it first began in 1996. In 2006,
      In 2006, over $5 billion was            over $5 billion was spent on DTC advertising, most of it on the most expensive medium, television.
      spent on DTC advertising,
      most of it on the most                    Direct to Consumer Advertising in Pharmaceuticals, Total Promotional Spending on Prescription Drugs,
      expensive medium,                         $bn, 1996–2011
      television                                                              6




                                                                              5




                                                                              4
                                                     DTC Total Spend ($ bn)




                                                                              3




                                                                              2




                                                                              1




                                                                              0
                                                                                  1996   1997   1998   1999   2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010 2011E


                                                Source: Advertising Age, 2010




                                              Since 2006, 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.
                                              Pharmaceutical Advertisers are Exploring New Media Types
                                              Social media is a 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, pharmaceutical companies have an opportunity through social media to improve their brand
                                              image through their responses to these enquires. Another huge advantage of social media is the sharing
                                              between friend and peer groups it enables. A recommendation from a friend is trusted by 90% of people
                                              and 70% trust consumer opinions posted online (Google, 2011a), and so campaigns that are spread
                                              between friends by word of mouth, can be more effective than traditional methods of widely broadcast
                                              DTC.




  © GBI Research. This is a licensed product and is not to be photocopied                                                                                         GBIHC230MR / Published JUL 2012
                                                                                                                                                                                           Page 3
Executive Summary




                                                Direct to Consumer Advertising in Pharmaceuticals, Proliferation of Brand Message Through Word of
                                                Mouth

                                                        TV/Print Branded
                                                                                      TV/Print Consumer
                                                                                      required to remember                  Activity                    Leads to
                                                        Campaign                      brand/web address
                                                                                                                         Facebook – become      •Appears on newsfeed for all
                                                                                                                         a fan/Like this        friends to see
                                                        TV/Print Unbranded                                                                      •Direct messaging
                                                        Campaign
                                                                                                    Branded Website      Follow us on Twitter   •Receives all tweets
                                                                                                                                                •May choose to retweet to
                                                                                                                                                followers

                                                         Company                                                         Watch the You Tube     •May choose to share video
                                                                                                                         video                  •May become viral
                                                         Initiated
                                                                                                                         Post on your blog      •Read by blog followers


                                                        Online Advertising
                                                                                                  Unbranded Website      Subscribe to           •Direct messaging
                                                                                                                         newsletter             •May choose to share content
                                                        • Banner Ad
                                                        • Facebook Ad                                                    Recommend to a         •Targeted to interested parties
                                                        • You Tube Ad                                                    friend
                                                                                                                         Join our online        •Likely to share content with
                                                                                                                         community              friends
                                                                                                                                                •Encourage others to join
                                                                                                                         Share your story       •Likely to share content with
                                                        Facebook Newsfeed                                                                       friends through numerous
                                                        (posted by friend)                                                                      media
                                                                                                                         Take part in an        •Likely to share experience
                                                        Twitter feed (mentioned                                          event                  through numerous media
                                                        or retweeted by friend or
                                                        trending)                                                        Become a campaign      •Will share campaign
                                                                                                                         ambassador             throughout social media,
                                                                                                                                                websites and in person
                                                        You Tube – video popular or
                                                        posted by friend on                                              Take our test/quiz     •May post results on
                                                        Facebook/Twitter                          Click to Follow Link                          Facebook/Blog
                                                                                                  Consumer directed
                                                                                                  straight to desired    Buy related            •May recommend purchases
                                                                                                  location               products               causing more site visits

                                                           Word of Mouth                                                 Download the app       •May lead to increased
                                                                                                                                                compliance and brand loyalty



                                                Source: GBI Research




                                              It is Critical for Pharmaceutical Advertisers to Choose the Correct Media Mix for their Product and
                                              Consumer Target
                                              Online DTC campaigns are also much easier to measure; there exists software which can record how many
                                              individuals have clicked on an advertisement and what their browsing habits were before and after they
                                              interacted with the brand. Social media, too, can be monitored and adapted to suit the behaviors of a
                                              particular audience.
                                              The specific media mix of a pharmaceutical campaign must depend on the target audience and will likely
                                              vary with each drug type. Different consumers access and utilize media in different ways; a DTC campaign
                                              must be specially designed to fit with the habits of the target audience.
                                              Whilst DTC advertising is only legal in the US and NZ, it is illegal in all other markets, including Europe, DTC
                                              advertisers have to find different avenues of promotion. Most of this is done through unbranded awareness
                                              campaigns which have similar features to DTC campaigns but lack branding and drug information.




  © GBI Research. This is a licensed product and is not to be photocopied                                                                  GBIHC230MR / Published JUL 2012
                                                                                                                                                                    Page 4
Table of Contents




                                              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


  © GBI Research. This is a licensed product and is not to be photocopied                                                                                           GBIHC230MR / Published JUL 2012
                                                                                                                                                                                             Page 5
Table of Contents




                                                  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


                                              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




  © GBI Research. This is a licensed product and is not to be photocopied                                                                                           GBIHC230MR / Published JUL 2012
                                                                                                                                                                                             Page 6
Table of Contents




                                              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




  © GBI Research. This is a licensed product and is not to be photocopied                                                                                            GBIHC230MR / Published JUL 2012
                                                                                                                                                                                              Page 7
Direct to Consumer (DTC) Advertising in Pharmaceuticals -Introduction




                                              2        Direct to Consumer (DTC) Advertising in Pharmaceuticals -Introduction
                                              DTC (Direct-to-Consumer) advertising expenditure for pharmaceutical products increased by almost 800% in
     Advertising expenditure for
                                              the decade between 1996 and 2006 and despite a dip in expenditure over the last six years, estimates for
     pharmaceutical products
                                              2012 remain around 600% of what they were in 1996. In the US, from less than $1 billion dollars in 1996
     increased by almost 800% in
                                              and peaking at more than $5 billion in 2006, pharmaceutical companies are expected to spend just over $4
     the decade between 1996
                                              billion in 2012 (Advertising Age, 2011). New Zealand is the only other country where branded DTC
     and 2006
                                              advertising for pharmaceutical drugs is allowed. In Europe, pharmaceutical companies can only advertise to
                                              increase disease awareness and not to promote their products.
                                              Pharmaceutical companies advertise their products on traditional media such as television, print, radio and,
                                              increasingly over the last decade, through digital media such as the internet and mobile advertising.
                                              Traditional mass communication media forms a huge portion of the pharmaceutical company’s advertising
                                              budget since they reach a large audience and are very costly to produce and run. However, digital media
                                              has gained importance as a better medium to advertise as it is cheaper and highly targetable.
                                              DTC advertising helps pharmaceutical companies increase their revenues through increased demand for
                                              their drugs. It has been observed that as patients view advertisements for drugs related to their diseases on
                                              television or print media, they seek a prescription for the concerned medicine from the doctor. Research
                                              has shown that a high rate of patients (close to 70%) who request specific prescriptions have been
                                              influenced by DTC advertising; this has resulted in the increased use of DTC advertising to maximize
                                              revenues from pharmaceutical drugs. Pharmaceutical companies have also found DTC advertising to be a
                                              more cost-efficient tool compared to research and development, of new therapies, to increase the revenues
                                              from their drugs.
                                              However, DTC advertising for pharmaceutical products is a highly regulated market where government
                                              agencies, such as the Food and Drug Administration (FDA) in the US, keeps a track of all the advertisements
                                              on air and takes strict action against those who break the FDA guidelines for DTC advertising. The FDA
                                              guidelines for DTC advertising mainly revolve around complete and unambiguous provision of the drug
                                              profile in the advertisements and inclusions of drug indications, side effects and important safety
                                              information. Recently, DTC advertising has also been in the limelight in the national politics of the US, where
                                              instances of unethical advertising practices by pharmaceutical companies have raised concerns regarding
                                              the impact of DTC advertisement on the public health safety and on the public health sector itself.
                                              Since the relaxation of DTC advertising rules in 1997, pharmaceutical companies have often been caught
                                              violating the FDA guidelines. Misleading advertisements, misrepresentation of facts, false claims and use of
                                              celebrities to influence patients have been some of the common tactics pharmaceutical companies have
                                              used to promote the drugs. DTC advertisements have also been criticized for increasing the demand for
                                              expensive drugs, which a patient might not really need, and thereby increasing the overall healthcare and
                                              healthcare insurance costs.
                                              In May 2009, the FDA proposed new guidelines regarding distracting images and music used by the
                                              companies in their advertisements. It also mandated that companies must use similar styles and voice-overs
                                              when conveying risks and benefits. The FDA also issued warning letters to 14 pharmaceutical companies
                                              marketing 48 brands, prohibiting them from putting their advertisements on search engines such as Google
                                              and Yahoo. Besides strengthening regulations, thoughts over banning the branded DTC advertising in the US
                                              are also afloat.
                                              Regulations are expected to bec
				
DOCUMENT INFO
Shared By:
Tags:
Stats:
views:22
posted:8/3/2012
language:English
pages:62
Description: 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 i
BUY THIS DOCUMENT NOW PRICE: $3500 100% MONEY BACK GUARANTEED
PARTNER GBI Research
GBI Research is a market-leading provider of business intelligence reports. GBI Research covers worldwide markets and issues, supplies actionable data and forecasts and is driven by industry leaders’ insights. GBI Research provides a broad spectrum of reports across the healthcare and energy industries and its online offering is easy to navigate - a comprehensive resource for business information needs. Headquartered in the UK, the company has branches in the US and Asia, and provides world class client support and service.