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The Pulse of the Pharmaceutical Industry

DTC Special Feature: TV or not TV

Written by: | | Dated: Friday, June 9th, 2017


The television portion of pharma’s DTC spend just keeps rising.


Television as a marketing medium seems so, well, 1950s these days. Given the ubiquity of digital and mobile devices and the tracking and targeting opportunities they present, not to mention the lesser cost attached, blasting TV spots out to whomever might be watching could strike the uninformed as old-fashioned.

But pharma’s top brand managers clearly don’t think so.

According to ZS Associates’ white paper “Prescriptions in prime time,” from 1998 through 2012, the TV portion of pharma’s overall DTC spend always lurked right around 58 percent, never straying more than a few percentage points above or below that number in most years. Meanwhile, overall DTC spend peaked at nearly $5.5 billion in 2006, then began to decline as many of the largest blockbuster primary care brands began to approach or pass the ends of their patent protection.

Then, in 2013, something counterintuitive began to happen. DTC spend started making a comeback, finally passing its 2006 peak last year with about $5.6 billion in total spend, according to Nielsen (Kantar Media estimates $6.4 billion). That’s not the counterintuitive part, though – it’s that the TV percentage of the total has grown substantially, reaching 70 percent in 2015.

Why? According to Hensley Evans, principal at ZS and co-author of the white paper, it comes down to the substantial values per patient of the specialty blockbusters that have been taking over the sales charts in the past few years.

“The biggest driver (of growth in TV spend) is the economics of these specialty brands,” Evans told Med Ad News. “The high value per patient reached justifies more of a ‘shotgun’ approach, because even if a relatively high percentage of media impressions reach individuals who don’t have the medical condition you are addressing, the small percentage of relevant individuals you do reach hold tremendous value for a specialty brand. For example, the average patient value for Opdivo or other specialty brands can run well into the five figures, compared to the average patient value for Lipitor, which was closer to $1,000 in the early 2000s when Pfizer was investing so heavily in DTC.”

Alongside this is TV’s growing capability to target.

“It isn’t just digital that has evolved with more advanced targeting; television has as well,” says Stacey Barlow, VP of media, Butler/Till Health Group. “With all the data currently available, buyers no longer have to work with simple standard demos, and instead can combine data sets to establish which networks and programs their specific target is viewing. When you layer on advancements in programmatic television and addressable television, our ability to have less waste and reach our consumer in a more targeted way increases exponentially.”

Of course, whatever the DTC spend numbers might be, they are always to some degree just a reflection of what a handful of blockbuster brand managers and their (big) companies are doing. According to both Nielsen and Kantar data, five of the top 10 brands by DTC spend come from one company – Pfizer, which spent nearly three times what its closest competitors did on DTC in 2016, according to Nielsen estimates. And, only three other companies – Lilly, Bristol-Myers Squibb, and GlaxoSmithKline on the Nielsen chart and Lilly, BMS, and

AbbVie on the Kantar chart – are represented among that top 10.

On the flip side of the TV “shotgun” approach is pharma’s increasing commitment to programmatic buying, the sniper of the advertising world. According to a 2016 eMarketer report, the industry is spending 40 percent of its digital display budgets programmatically – but, as Matt Nespoli, associate media director at Butler/Till points out, that number is substantially less than in most other industries.

“Programmatic buying, no matter the industry, helps provide a multichannel, efficient buying and targeting investment, while looking to improve the overall customer experience with more relevant messaging,” Nespoli says. “But why pharma has been turned off by programmatic could be the execution behind brand safety and governmental regulations.”

Nespoli suggests that cookie tracking might be a roadblock to programmatic for some conditions and brands. “For example; retargeting, a tried and true targeting tactic in all other industries, is viewed as intrusive and in some cases illegal depending on the drug or company using this tactic,” he notes. “For that very reason, programmatic becomes a tougher sell since there is a bit of reliability (concern) around the advanced targeting capabilities within the technology.”

But the capabilities of programmatic are improving. Marketers can align their messages to contextually relevant articles without always relying on cookies, and brand safety providers like DoubleVerify are offering ways to monitor or block content depending on where or when marketers want their ads to run.

“Because the stigma of programmatic buying having remnant or unsafe inventory is slowly eroding, the industry will start to spend more money within this model,” Nespoli says. “Data partners are offering brand safe and compliant audience targeting, while inventory is becoming more and more transparent. Programmatic should always equal control. It’s up to the brand, marketing team, and agency to ensure they are researching targeting and safety tools, while having a full view of campaign performance and delivery.”

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