DTC Ad Spending Fell In The Third Quarter

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tvadvertising.jpgAfter a long run of quarterly spending growth, the reported spending for DTC advertising fell 7.1 percent in the third quarter to $1.13 billion, according to DTC Insights, which cites data released this week by Nielsen Monitor-Plus. The decline represented “reported” dollars of $86 million. (For the first nine months of 2007, the reported spending data shows an increase of 2.6 percent to $3.85 billion.)

The shift in the third-quarter DTC spending hit network television hard, DTC Insights writes. According to Nielsen data, network TV saw its DTC ad dollars fall 10.1 percent in the quarter to $314.5 million (a drop of more than $35 million). As a result, the firm notes that cable TV surpassed network as the market-share media leader for DTC in the period (28.9 percent market share for cable compared with 28 percent share for network TV).

“The decline in reported spending is certainly surprising, given that the data showed spending increasing at a 7.3 percent rate through the first half of 2007,” write Bob Ehrlich, who heads DTC Insights. “For the full year, the DTC market (at least the segments that can be measured) should show growth, but it may be less than the 5%-8% previously expected. What seems clear, however, is that as several of the so-called Big Pharma firms wrestle with patent issues and dry pipelines, the data indicates they are looking at the big-ticket promotion budgets as ripe for pruning.”

However, Ehrlich goes on to say that “it’s too soon to claim DTC marketers are making a big move away from mass broadcast-type campaigns, particularly since cable TV saw its add dollars increase almost $4 million” in the third quarter. The Nielsen data also doesn’t present a clear picture on the online spending of pharma, which is harder to track given the range of options available, he adds.

The list of DTC brands that trimmed spending in the third quarter include Crestor and Nexium (AstraZeneca), Coreg and Immitrex (GlaxoSmithKline), Singulair (Merck), Zelnorm and Lamisil (Novartis), Relpax and Lipitor (Pfizer) and Rozerem (Takeda). Zelnorm, which restricted its marketing efforts earlier this year under an agreement with the FDA, had spent $29 million for DTC advertising in last year’s third quater, but didn’t advertise in the recent third quarter. Crestor also did not advertise in the third quarter, after spending $43 million in the year-ago period.

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  1. AZ supposedly made a decision to discontinue all DTC advertising 2-3Q07, this may account for a significant amount of the decrease.

  2. Maybe this news bodes well for those of us in the industry who think the future of promoting safe, effective and, yes I’ll say the four-letter-word, profitable products is in creating innovative ways to optimize their risk/benefit profiles. Pharma haters will be skeptical of this claim, but there are plenty of us out there working long hours to implement a new way of managing products in the marketplace. Like it or not, it’s SOP that the handful of bad boys get all the coverage, and in select fields like pharma, energy and insurance you’re accused, convicted and sentenced in the media in one seamless, fluid motion. Those who go to work every day caring about the people who use our products (often our own families) and trying to do the right thing will never be interviewed on 60 Minutes or hauled in front of Senator Grassely, but we do exist in numbers. Commenters, please think about that next time you give all of us the blanket label of “bastards” in these online postings.

  3. Printers, Razor Blades and Pharmaceuticals…

    In 2006, Hewlett-Packard had revenues of around $90 billion, give or take a few billion. Of that, around one-fourth came from their printing and imaging division. You know, laserprinters. There’s a lesson in HP’s strategy for pharmaceutical marketers…

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