Despite Regulatory Concerns, Big Pharma to Diversify Marketing Budgets

I’ve written before about the legal concerns facing big pharmaceutical companies as they market directly to consumers. These concerns multiply when marketing shifts to new online formats such as social networking. But more companies in this sector are exploring the best way to move online.

A recent report in Medical Marketing & Media indicates that DTC promotion increased in the online banner ad and sponsorship formats. Spending on search, however, did not increase as rapidly. In total, Kantar Health statistics show that the DTC Internet marketing component of pharma company budgets stands at 6.6% of the ad budget. And that spending equated to $315 million in 2009 which was more than double the 2008 spending level.

Pharmaceutical firms are spending even more online to reach the professional, primarily physicians, market. In 2009, the online spending level crossed the half-​billion dollar mark and totaled $523 million. According to SDI, the ePromotion category for physicians accounts for 2.5% of total online pharma marketing to professionals.

This increased spending, especially to physicians, comes at the expense of traditional media, primarily medical journals but the industry has also cut spending in DTC magazines.

Overall, analysts are uncertain about exactly how much increased online spending is hurting traditional print. Fred Foard, EVP, strategic insights, at media planning firm CMI cautions against coming up with a quick one-​to-​one measurement of how online might be replacing print in the industry. He says, “it has more to do with what's going on with the brand than the media mix. Some brands may be increasing or decreasing spend. It has to do with what they're trying to accomplish within their lifecycle.”

But it’s clear that pharma companies see advantages in funding both  DTC and physician campaigns when it comes to the digital universe.

[Source: Iskowitz, Marc. “Quantifying pharma’s online promotional shift.” Medical Marketing & Media. 11 May 2010. Web. 25 May 2010] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.