Inside online marketing	January 2008

Med Ad News spoke with Katy Thorbahn, senior VP and general manager, Avenue A | Razorfish (avenuea-razorfish.com) to learn more about the change in media mix spending, the rise of social networking in the pharmaceutical industry, use of video to improve content online, the explosion of health properties in search, and how the Internet is being used as more than just a direct response channel.

Katy Thorbahn: Clients are taking a critical look at the media mix and realizing that from the standpoint of reach and the ability to engage their end customer, primarily on the DTC side, but also growing in the professional piece, that the digital medium can play a critical role their. And, in fact, we just had one client who has decided to cut all of their media except for digital for 2008 and do a pure play out to the DTC market. That’s a strong indication of the fact that you’re going to see more and more uptake in that realm going into next year and beyond.

Med Ad News: You believe there will be a change in spending trends?

Katy Thorbahn: If you step back and look at how pharma has typically gone to market, from particularly a consumer communications standpoint, there’s been, historically, a pretty heavy reliance on what we would consider broad reach traditional media, such as TV or print, and the digital piece played a small role or primarily a supporting role in terms of having that initial contact and establishing the brand and getting out the important messages around it to the consumers.

What we’re seeing as the medium matures and as DTC marketing itself matures, more and more companies are taking a critical eye to their media mix and realizing that there’s some real challenges with using some of the broad reach media as the primary driver for their marketing. For a variety of reasons. One is that the way that people want to engage with advertisers has changed and is changing.

Think about how most people nowadays engage with advertisers, through using their DVR to skip through commercials or searching online for more relevant information or reading blogs. The ability to get a very targeted and broad reach message out there via television is not so easy any more. So, what we’re seeing is that many of our clients are stepping back and looking critically at the media dollars that go in there and the production costs that go in there and realizing that digital marketing, whether that be through the Internet or mobile devices, is really coming to the forefront for some of those brands in particular as a way to drive their primary customer communications.

If you think about it, there’s some things there that are really attractive to health-care marketers, in that if you’re engaging with someone properly within the digital channel, say through a Website, through different types of interactive components, you can do a good job of educating them about condition or disease state. You can also do a really good job of giving that deep information about different types of drugs or how to treat those in a way that you just can’t realistically afford to do or can’t physically do in a TV ad.

That’s aligning well, too, in our experience with how consumers are actively still searching for a lot of health-care information and looking for answers beyond just the marketing pitch, as it were, and the digital realm is going to become more and more important for pharmaceutical marketers to do that well.

Med Ad News: You also see a rise in the use of social networking. Is that easier said than done?

Katy Thorbahn: That’s a really good point. It is in a lot of ways easier said than done. And I think in order to really embrace that, the health-care community is going to need to get comfortable with things that historically have made them a little bit uncomfortable. What I mean by that, of course, is obviously it’s a very highly regulated industry. Obviously all of our pharmaceutical companies have very significant legal and regulatory teams who are designed to make sure they stay very much above the fray and don’t get themselves in trouble. And as a result sometimes there is a pretty immediate, visceral reaction to the fact that social networking and blogs is just undoable because of the whole adverse effects and all that.

So, what we’re seeing is clients are moving very slowly into this area, and the technology helps to limit some of the exposure that pharmaceutical companies can have. If we can even look for example at the notion of content targeting that some of our pharma clients do, which is the notion that you’re going to buy across a network and they’re going to place ads within relevant content. Whether that’s editorial, whether that’s blogs. And sometimes you have to recognize that that content won’t always be positive, but by being there and being part of the conversation, you can ensure that your message and appropriate information is getting out to your audience.

So, we’re starting to see more of our clients getting into this notion of how do I play in a world where there’s a lot of conversations going on around my brand in a way that limits my exposure.

Med Ad News: Are any of your clients currently working on social networking projects?

Katy Thorbahn:  We don’t have any [clients] currently playing in the pure social networking like MySpace or Facebook, but we do have more and more clients asking how can we play there and how will we continue to embrace these Web 2.0 types of functionality to help further our brand message.

Med Ad News: And the use of video goes right along with that.

Katy Thorbahn: Absolutely. Video is becoming a lot less controversial, for lack of a better term. I believe that with the continuing, expanding broadband market with the fact that we’re seeing consumers really do engage with video in a lot of ways, that the health-care companies are starting to understand that they do have a way to distribute sight, sound, and motion in a much more compelling way than just doing, for example, a 60-second TV spot. More of our clients are producing videos just for the digital space.

I think, too, if you look at just how some sites are being built now, where they rely a lot more on video content as the framework for the entire site experience, versus just an add-on. I believe that the health-care community in general is starting to embrace this and understand how delivering your message in that way can be incredibly powerful and incredibly measurable as well. You can get a sense whether people are actually participating in the video, what sections are they seeing, what messages are they taking away.

Med Ad News: Is it a challenge for agencies to find the staff capable of creating this kind of content?

Katy Thorbahn: I think for a lot of companies, this whole space is a large challenge. If you back up and look at Avenue A | Razorfish, we are a digital agency and have been dedicated to doing this for 11 plus years, so within the digital space, we have great capabilities, and we have people, legacy, who have been here. If you look at traditional agencies, they have the challenge of acquiring those skill sets and learning how to leverage them within the context of the entire marketing.

With video, you’re right that it’s always helpful to have somebody with experience who has done it, but I think it’s important to remember that agencies in general typically go out and hire production companies to help them with that, and I think we’ll continue to see that trend as well within the digital space.

Med Ad News: What is the role of search in digital marketing efforts?

Katy Thorbahn: Search is still a critical component of all of our pharma companies’ marketing efforts. Statistically, I believe that we’re spending about 40% of online media dollars within search properties. So that’s obviously not insignificant, and that has continued to grow.

We’ve been looking at search verticals and different properties along those lines, but you still tend to see the lion share of everything going to the major players like Google, Yahoo!, and MSN. What we believe is that search continues to play a critical role within health care for the very reason that you can quickly identify someone who’s actively looking for information about your product or about the condition and deliver them very targeted content to drive them to the right information. We expect that’s going to continue to grow and continue to be an area of focus for our health-care clients. Particularly those that are attuned to ROI and modeling out their investment in a short-term basis.

Med Ad News: You see the Internet being used as more than just a direct response channel?

Katy Thorbahn: Absolutely. I believe from both a consumer and a professional standpoint, that the medium has hit its stride, largely driven by the technology that can now support the delivery of richer experiences and just the broadband penetration being as high as it is that we are now able to emotionally engage folks through the Internet and through Websites and other digital properties, which a couple years ago really was difficult to do.

That’s what’s driving the primary switch from the media spend from the traditional to digital, and I think it’s why you’re seeing more and more health-care clients taking a critical eye to their Web properties and enhancing them so that they are telling more of a story and engaging people in a way that gives them the right health-care information and ensures they’re getting the fair balance and their condition content but in a way that is a lot more interesting and fruitful than the brochure-ware sites that were up even a few years ago.