Special Feature: To DTC or not to DTC
That’s not really much of a question – unless you’re the American Medical Association.
It’s been eight months now since the American Medical Association called for an outright ban on direct to consumer advertising by pharmaceutical brands, but seismologists are having a difficult time picking up the aftershocks from this mighty pronouncement, given that there have not really been any. Pharma brands are still spending furiously on DTC – something like a billion dollars more in 2015 than in 2014, with more growth expected this year – and patients are still demanding and sharing more information about drugs and medical conditions, with or without approval from their doctors. AMA’s pronouncement may not quite be in the same class as King Canute instructing the tide not to come in, but it’s certainly not far behind.
The trouble with AMA’s proposed direct-to-consumer ban, according to Evoke Group CEO Reid Connolly, is that it is based on a fundamental misunderstanding of the industry and the role of patient and consumer communications. After all, with physicians and payers both serving as gatekeepers, DTC ads can’t “sell” anything on their own. What they can do, Connolly believes, is help consumers understand how new and different options may help improve their health.
“We worked in a category recently where a revolutionary new breakthrough product for a fairly devastating condition was approved and available,” Connolly told Med Ad News. “However, because there were some hurdles with prior authorization and some hoops to go through for the HCP, many physicians weren’t even telling consumers about this game-changing product. But, when asked about the product by a suitable (and informed) patient, the physician would agree it was the best option. I can’t think of a clearer example of why it is so important that consumers get, and stay, educated and have a voice in their health.”
Others have pointed out another fundamental misunderstanding inherent in AMA’s position. Given the relative size and growth of spending on pharmaceuticals versus healthcare services, doctors pointing fingers at drug advertising for increasing the cost of healthcare seems like a glorified bait and switch. After all, services provided by doctors and hospitals account for more than half of total healthcare spending, while prescription drugs make up about a tenth – and the cost of care is growing much more rapidly than the cost of drugs, Martin Shkreli notwithstanding.
“If only politicians and the AMA would appreciate the fact that drug costs make up less than 10 percent of the overall healthcare costs, and by most accounts are responsible for saving multi-millions of dollars, and lives, by preventing costlier healthcare problems,” says Joan Wildermuth, executive VP, global creative director, managing director, Juice Pharma Worldwide.
There is additionally the small problem of reality in a digital age: consumers are expecting more information in all their interactions with companies, and pharma is no different.
“Consumers want and need information from prescription-medicine brands in convenient channels,” says James Coghlan, senior VP, strategic planning director, Area 23. “This is the 21st century, and a more inclusive model is required. Ignorance may not be the best remedy for patients; in research, we have actually heard physicians bemoaning the discontinuation of DTC advertising for products that they believe had previously helped drive patient compliance.”
Not everyone in the industry is so enamored with DTC, though – or at least with the impact that potential overuse of DTC has had on the reputation of pharmaceutical companies. HYC Health Executive VP, Managing Director Susan Flinn Cobian is disappointed that AMA’s recommendation has done nothing to temper the industry’s aggressive spending in the consumer sphere.
“The pharmaceutical industry in the days before DTC was thought of as ‘The best and brightest, trying to improve the humancondition,’” Cobian told Med Ad News. “Since DTC, we’ve seen a steady perceptual erosion of the industry’s reputation. Now, the industry ranks right up there with big finance and used car dealers as untrustworthy. Little wonder, as consumers and patients are bombarded with often vague and less-than-critical disease states that make them wonder, ‘Could this be me?’ Are they selling disease? Or trying to help? A fair and provocative question. The top 20 pharma companies made more than $300 billion last year. Pfizer (attempted to) move headquarters overseas to avoid paying taxes in the United States. The relentless pursuit of maximizing every opportunity to add to the bottom line feels out of touch with the stated missions of these companies. I believe DTC advertising lies at the heart of these perceptions.”
DTC spend
With or without grumbling from AMA, industry spend on DTC, and particularly DTC television ads, has been growing spectacularly of late. According to Kantar Media, non-internet DTC spend rose by nearly a fifth to $5.4 billion in 2015, matching its 2006 peak after a number of down or static years – and TV spend as a percentage of the total rose from 55 percent in 2011 to 70 percent in 2015. Nielsen has the numbers rather different – $5.2 billion in spend across all media – but a similar rate of overall growth. So what accounts for nearly a billion dollars in additional DTC spend in 2015, whichever measurer you prefer?
Flinn Cobian credits the phenomenon of new drug classes entering into mature categories. “Emerging classes like DOACs are spending huge amounts of money to gain penetration into well established, relatively cheap and well established categories,” she says. “It’s just a matter of time until the penetration takes hold and the practice inertia gives way to new – and potentially more expensive – therapeutic approaches. TV has universally been viewed as the easiest, fastest way to get in front of as many consumers as possible. Not inexpensive by any means, but when you are competing in a billion-dollar market, like anticoagulation meds, pharma companies believe the cost is a worthwhile investment in long-term sales gain.”
Another angle is that the heavyweights are getting heavier. “A key factor contributing to this growth is that the largest pharma advertisers are increasing their ad spends,” says Laurie Larson, senior VP, director media strategy, IPG Mediabrands. “The 2015 increase in spend of companies like Pfizer, Johnson & Johnson, and GlaxoSmithkline was 9 percent, 10 percent, and 99 percent, respectively. Several areas, including diabetes and dermatology are leading the way. Brands such as Lyrica, Invokana, and Jublia have also contributed with ad spend increasing 62 percent, 102 percent, and 369 percent, respectively. With competition in the marketplace rising and an aging demographic over-consuming the medium, TV remains a safe bet for advertisers looking to drive awareness of new or existing medicines.”
The jump in TV spend in particular may serve as a reminder to all the digital prophets that, even with all those fancy new media at hand, old reliable is still, well, reliable.
“For over a decade we’ve been planning TV’s funeral and chatting about the birth of emerging channels,” says Mike Rutstein, founder and CEO, Strikeforce Communications. “However, today, TV is more alive than ever before for one simple reason – it works. There is no better medium to rapidly build brand awareness and deliver big brand impact. But there’s more – new products that can cure disease or can extend life lend themselves to the medium because the ROI is relatively easy to achieve based on the cost of therapy and no other channel can provide the bang for the buck, particularly in a launch phase.”
Rutstein also notes that the industry has been delivering major innovations across key therapeutic categories over the past 18 months – “So given the importance of establishing brand awareness and talk value, it’s not surprising that the TV had been turned on in a big way.”
And then there’s the aging target audience and their still-traditional media consumption proclivities.
“It’s important to face the realities of media consumption,” Rutstein says. “Yes, while boomers and beyond are active online, but they still turn to the tube for their news and entertainment and that’s why it’s so important to reach them there with a message. While digital marketing is playing an increasingly important role in the everyday marketing mix, it’s not a replacement for TV, at least not yet. Marketers need to leverage its best purpose – to drive deeper brand engagement – not as a surrogate for TV.”
That’s not to say direct-to-consumer television ads are a magic bullet – more like heavy artillery attempting to pick off mice. According to a recent survey by Treato, just seven percent of respondents say they have asked a doctor about a drug after seeing an ad about it on television. Consumers do seem to be noticing all that new DTC spend, though; the same survey found that 64 percent of respondents felt like they saw more drug advertisements on television over the past year.
“While seven percent of consumers saying they have asked a doctor about a drug they saw advertised on TV sounds like a low number, that actually could be a good return on investment for pharma marketers, especially those marketing therapies for rare diseases,”says Christine Petersen, chief marketing officer, Treato. “We’d also add that the decision to spend on TV is easy – it’s a great way to get in front of a lot of eyeballs – although it doesn’t mean those eyeballs are your targeted audience or paying attention in this case.”
Consumer shop invasion
From outside looking in, it would seem that more and more pharma brand managers of late have been turning to consumer shops for DTC work rather than more traditional healthcare specialist shops. And why not? After all, if you can sell Coke, can’t you sell complex biologics too? Well, maybe not.
“We understand the appeal of the bright, shiny object that big, traditional, consumer shops represent,” says Tim Hawkey, managing director, executive creative director, Area 23. “Clients have been drawn to them over the past couple of years, expecting breakthrough creative and a ‘big brand’ approach. But after time, the shine wears off, and many clients are disappointed with a real deficit in medical, regulatory, and even strategic understanding. I won’t name any names, but I recently heard about a major DTC brand selecting a consumer agency in a big, competitive pitch. Just six months later, they called back the first runner up (an experienced healthcare agency) and awarded them the business on the spot.”
Beyond that desire for the “big idea,” the pharma brand manager migration towards consumer shops may also reflect a certain “me-tooism” among healthcare-focused agencies.
“The [consumer] shops know that pharma/healthcare bring bigger budgets than the shrinking CPG world,” Flinn Cobian says.
“The DTC creative product is far too often either a dramatization of the problem (how many little critters, obnoxious characters, and annoying metaphors can an audience endure?) or a generic picture of ‘living your life problem free.’ All ads with this approach act and feel the same. No differentiation, no brand essence, no memorability.”
Thus, it’s no wonder that clients are ringing up their local consumer shop. “This is an artifact of agency creative offerings that are formulaic, predictable, and play it safe on the behalf of clients that simply want to send a safe and clear message,” Flinn Cobian says. “Market research listens for that clarity while neglecting personalization, motivation and the urgency to act. Agencies need to demonstrate loyal candor with these clients. Get some provocative ideas into research and listen to the research with broader filters that pick at the emotions the work plays to.”
As long as pharma DTC exists, one suspects, traditional consumer shops will pitch for it – and win, occasionally. So what’s a healthcare agency to do? Watch and learn.
“For the good health of all consumers, we need to learn from each other,” Wildermuth told Med Ad News. “On the healthcare side, we need to embrace the value of humor, relatability, and plain-speak, in communicating. We need to strive to move beyond delivering messages to earning trust and even love. On the consumer side, they need to more fully appreciate the necessity of connecting the dots from consumers to physicians. Additionally, in healthcare, we need to move toward consumer models where people can immediately respond to a promotional message by pressing a button that lets their PCP know they want to discuss a particular product or a particular condition at their next visit.”
Our new data overlords
DTC without data underpinning it in 2016 would be rather like an ice-cold O’Douls – you’re leaving out what makes it work.
“The most successful brands tend to be relentless in pulling insights for development and execution from a variety of sources,” says Ken Beatty, executive VP, chief analytics officer, FCB Health. “For example, combining insights from research, previous message testing, social listening, past performance, segmentation, and predictive modeling can all lead to hypothesis generation with respect to messaging and targeting. Then, developing an inventory of messaging approaches and executions can fuel dynamic message served in a variety of platforms, including, but not exclusively, programmatic.”
So how to achieve all this? According to Flinn Cobian, site analytics and comprehensive tracking and tagging strategies allow for deeper insight into how campaign messaging/offer/creative is performing – not just digital, but offline tactics as well. “The tracking and tagging strategy along with a testing matrix for creative/messaging/offers, allow for actionable learnings that lead to data driven optimizations – something we are doing as an agency with several clients,” she says. “We have also used data enhancement to append demographic, lifestyle and behavioral data to a client’s customer database. Appended demographic data can be used to validate and refine audience targeting; appended behavioral data such as media consumption and tech savviness can have impact on channel selection for marketing strategy; appended lifestyle data such as interests and hobbies can direct creative and messaging strategies.”
