Brave New World

THE MAGAZINE OF PHARMACEUTICAL BUSINESS AND MARKETING • MEDADNEWS.COM • MAY 2012 • VOLUME 31 NUMBER 5 • $25 IN THIS ISSUE: 18TH ANNUAL REPORT: DTC LEFT TO THEIR 16 OWN DEVICES Brave new world (of DTC) Scandals over recalls and data disclosure haunt In order to respond to tectonic shifts in the marketplace, pharma brand managers must medical device makers. rethink their approach to the DTC relationship. By Joshua Slatko [email protected] he iconic television spot for the iconic pharmaceutical brand, while not yet ready for the museum, is also not quite the go-to tool it once was for marketers seeking maximum return Ton their dollars. As developers turn towards the targeted compound, patients expand their digital horizons, and payers concern themselves more with pre-emptive wellness measures than expensive A THOUSAND treatments, pharma’s brand managers must rethink 18 PICTURES their approach to the brand/patient relationship – and thus to DTC communications – to keep their As the newest and brands competitive. shiniest social media According to a mid-2011 survey report by Cut- tool, Pinterest is stirring ting Edge Information, the return-on-investment the interest of pharma for direct-to-consumer advertising in the United companies wanting to States lags behind other promotional methods, expand their social media such as patient adherence and physician support programs – but is it ready programs, despite past success. Cutting Edge’s data for pharma, and if so, how show that pharmaceutical marketing executives can it best be used? allocate 24 percent of their budgets to DTC advertising in the United States but attribute only 16 percent of revenue generated as return on the DTC investment. A SWEET Healthcare consumers, Cutting Edge’s research- CHALLENGE ers assert, have become jaded to, or at the very least 22 often disregard this type of advertising. Th eir survey found that in the United lates to a group of brands that invest more and a group of brands that invest States, other tools such as patient adherence and provider support programs a lot less – or not at all. Overall, as the number of brands that can benefi t Through its open-source are outperforming the percentage of total brand revenue generated by DTC from DTC diminishes, I predict that DTC spend for the overall industry will “Data Design Diabetes advertising. Survey data show that provider support programs generate an av- decline substantially.” Challenge,” Sanofi is erage of 26 percent and patient adherence programs generate 22 percent of Along the same lines, but narrowing the focus, Reid Connolly of evoke looking beyond marketing brand revenues compared to DTC advertising’s 16 percent. interaction believes that changes in perception of DTC as a marketing tool are drugs to help patients Drugmakers surveyed by Cutting Edge responded that they make 14 per- tied to the industry’s shift away from the traditional blockbuster and towards address the diffi culties of everyday living with cent more money by using DTC than if the advertising was discontinued more targeted compounds. diabetes, and is fi nding and spending remained static for other promotional eff orts. But the return “Th e issue is not that DTC mass media has reached the point of dimin- new partners the company on DTC is also lower than those other activities. As a result, none of the U.S.- ishing returns, but rather that the make-up of brands being approved and otherwise would never have based marketing groups surveyed would increase their existing DTC spend- launched right now is changing,” Mr. Connolly says. “While DTC mass me- connected with. ing even if given an extra 10 percent in their budgets. Th us, concluded Phar- dia will always be a valuable tool for blockbuster brands treating mass-market malot’s Ed Silverman in response to the survey, “DTC may have reached the conditions when used as part of an integrated marketing mix, many of the proverbial point of diminishing returrns.” brands coming to market are more specialized biologics or rare disease treat- Although Cutting Edge’s results are clear in black and white, interpretations ments. Th ese brands require a more tailored relationship marketing approach, of the company’s survey results vary widely among pharma ad agency leaders. which DTC mass media alone cannot off er.” According to Jay Carter of AbelsonTaylor, Cutting Edge’s results refl ect an But no matter what the brand, DTC may still play an important role in any industry whose marketers are “growing up,” learning where DTC dollars work media mix. According to John Kenyon, VP of Targeted Media, the targeted best, and where they don’t. marketing division of Time Inc., the great value of a good DTC campaign is “DTC has not reached the point of diminishing returns,” Mr. Carter told how it can support other campaign elements and amplify the usefulness of Med Ad News. “Instead, we are observing a maturation of our knowledge the most important of pharma’s marketing transactions – the doctor/patient about what brands respond well to DTC and what brands don’t. Th at trans- continued on page 8 SWEETYM/ISTOCKPHOTO.COM Th is month on ■ P2P healthcare and the portals of power: Peter Pitts of the Center for Medicine in the Public Interest talks about P2P Healthcare, where social media holds the keys to the portals of power. ■ Your metrics are useless: Digital marketers have developed the bad habit of gathering all sorts of useful data on user behavior but not actually using it to improve the user experience, according to Mike Nuckols and Walt Ruday of CDM Princeton. MedAdNews CEO Paul Miller tothepoint [email protected] BRAND DIRECTOR Daniel Becker By Christiane Truelove [email protected] [email protected] DIRECTOR OF CONTENT Christiane Truelove I think I have discovered a business even farther behind, IT-wise, than the [email protected] pharmaceutical industry. I found this out when my brother-in-law the IT guy was explaining MANAGING EDITOR, SPECIAL REPORTS Andrew Humphreys to me why he was no longer at the job he had just gotten late in the winter. [email protected] Brother-in-law had been hired to help this company (which shall remain nameless, but is a MANAGING EDITOR, MED AD NEWS Joshua Slatko small operation engaged in specialty equipment manufacturing) to update its pricing database, [email protected] its internal programs, et cetera. He had an inkling he was in trouble when he saw the server EDITOR AT LARGE ran on Windows 2000 NT and the database on Access 2000. Ed Silverman Th e server itself? Located in the break room, next to the coff ee machine. When the old [email protected] server began to die and made an incredibly unpleasant screeching whine while doing so, the LEAD ART DIRECTOR Marco Aguilera solution was to close the door of the break room so people didn’t have to listen to it. In this issue, we’re looking [email protected] Th e boss did eventually get a new server, but when the IT company that installed it began at how the pharmaceutical ASSOCIATE ART DIRECTOR to talk with him about building an operating system for the company, he refused to believe Jennifer Field industry continues to change jenny.fi [email protected] that this was a necessary, nay, incredibly needed thing and thought they were trying to rip him its communication ways to take PRODUCTION MANAGER off . advantage of new technology Brian Wu Another thing, the offi ce had fi ling cabinets fi lled with copies of old order forms. Every – although changes have not [email protected] order was printed out and fi led. Not by customer, or even type of equipment ordered. By date. been happening quickly at some SENIOR ACCOUNT MANAGER companies, when change occurs, Sandra Baker My brother-in-law actually off ered to scan every piece of paper and put it on the server in a [email protected] it happens comprehensively. searchable format, but this was deemed to be “too risky.” SENIOR ACCOUNT MANAGER Other signs that my brother-in-law knew he’d soon be on the job hunt again: fi nding 279 Andrew McSherry [email protected] iterations of the pricing database on the old server (meaning no one had ever gone in and cleaned out the old fi les each time the MARKETING MANAGER database had been updated); the boss’ refusal to acknowledge that buying new software meant that he needed to buy user licenses for Joanna Siddiqui each employee; the boss breaking the router in a physical temper tantrum; and my favorite, the boss telling my brother-in-law that [email protected] the IT systems could be replaced “by a line of typewriters.” ASSISTANT MARKETING MANAGER Amanda Wells Admittedly, the pharmaceutical industry hasn’t been very forward of the technology curve. I recall a few years ago at a Digital [email protected] Pharma ExL event, during the unconference session, someone from a pharmaceutical company that shall not be named was ONLINE MANAGING EDITOR complaining that the IT department there wouldn’t let them use a browser other than IE6. But compared with my brother-in- Barbara Lempert [email protected] law’s former employer, this company was on the technological cutting edge. I think my brother-in-law would have loved to have ASSOCIATE WEB EDITOR even IE6. I understand that since that statement was made, the pharma company in question quietly installed new browsers for its Mia Burns employees. [email protected] In this issue, we’re looking at how the pharmaceutical industry continues to change its communication strategies to take DATA SPECIALIST Silvia Arriola advantage of new technology – although changes have not been happening quickly at some companies, when change occurs, it [email protected] happens comprehensively.

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