eMarketer: Pharma Industry Failing at Web 2.0

Despite accounting for an ever-increasing share of online ad spending, the pharmaceutical industry is still failing to embrace the Web 2.0 strategies that could help it better engage consumers looking for health care assistance, according to eMarketer research.

The new study, "Pharmaceutical Marketing Online: Stuck in Web 1.5," projected that the pharmaceutical category--which includes hospitals, drug companies and other health care services--will account for 5% of Internet advertising by 2011, or $2.2 billion. Last year the industry was responsible for $820 million, or 4.9%, and is on track to ring in $975 million this year, or 4.5% of total Web spend.

But most of that money is still going to traditional Web 1.0 ventures that provide only limited interactions with users. "[By] restricting their brand sites to simple online information centers, pharma marketers are missing opportunities to engage consumers and boost compliance," the study said.

The study's author, eMarketer senior analyst Lisa Phillips, said Pharma's slow adoption of Web 2.0 strategies like blogs, social networks and broadband video can be attributed to its conservative approach to advertising in general and to government restrictions.

"They're very cautious, as you can tell from the ads you see on TV. Most are not in a breakout mentality," she said. "It's a safe way to stay within the FDA guidelines, so going online and engaging people in blogs could be a tremendous liability."

Nonetheless, some drug companies are getting it right, Phillips said, citing the Web site for sleep aid Rozerem as an example. Visitors to Rozerem's site see a video featuring the characters from its TV spots--Abraham Lincoln, a talking beaver and a sleep-deprived young man--with each imploring users to click on his individual section to learn more about the drug. Those TV spots have won critical accolades for deviating from the standard formula for sleep aid commercials, which commonly feature peaceful images of people smiling while they sleep.

But until pharma companies are willing to take some risks, their online ad efforts will remain stuck in a Web 1.0 mentality, Phillips said.

She also pointed out that while the pharmaceutical industry is growing its share of online ad spending, it's still far from the top-spending category. Retailers, automakers, media and entertainment properties, and financial services firms all spend considerably more than health care companies, she said.

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