Over the last two years, the Great Recession provided a backdrop for brands to pull back advertising. MPG Research shows that in 2010, industry spending fell 8% vs. 2009 and was 21% below its peak in 2006. Spending reductions resulted for a variety of reasons: voluntary moratoriums on DTC advertising for new brand launches, GlaxoSmithKline's bold announcement to reduce TV investment, and a collection of brands shifting off-patent. What has emerged out of these maneuvers is a changing media fingerprint.
Changes in the fingerprint, however, are not unprecedented. When the FDA introduced its guidelines for TV advertising in 1997, print dominated 70% of the media mix. In the two years following, TV grew to 60% of the mix. By 2009, TV was 68% of the mix. The transition to TV reflected a success story for the pharmaceutical industry. Brands gained immediate national awareness, stimulating millions of patient-physician conversations. Newcomers to a disease category were able to quickly establish a competitive stance. But with that increased competitiveness, more dollars fueled even more growth in TV. To a degree, TV was its own worst enemy, as both regulatory and consumer skepticism grew as highly visible brands fought over subtle points of differentiation in confined allotments of time.
In 2010, the direction of the river's current dramatically shifted. TV investment fell 17%, more than twice the rate of the total category. And it was not only GSK that drove the declines. Six other major pharmaceutical companies significantly reduced their TV investment. But more interesting than the decline in TV was the growth of print, plus 13% in 2010. And it is no surprise. The medium is a tried, tested and true industry staple, conducive to delivering brand benefits alongside detailed risk information.
But beyond print's ability to communicate a brand message within the mandated guidelines, print is functionally practical for the pharmaceutical industry. Print has high target-ability, strong reach, and impressive efficiency. Additionally, the medium has low regulatory scrutiny. Compared to TV, its drawbacks are low frequency and slow reach build. But despite the shortcomings, print is an effective position within the current climate.
The endgame, however, is not print. Print is a safe harbor as the media environment continues to evolve. The overarching future is digital, which many anticipate will emerge as the next success story for pharmaceuticals. It is to be hoped that the FDA will finally deliver its guidelines later this year. Clarity is of the essence. But in whatever form these guidelines take, they will mainly be technical. The core principle governing the substance of any drug advertisement will remain constant: communicate both benefit and risk, regardless of the form in which the message is communicated.
In this context, the industry is prone to revamp its traditional thinking about the function of media. Where drug advertisers once focused on driving brand awareness with TV and print, the new game is to drive knowledge and information through brand engagement, to facilitate an informed patient-physician conversation. This will require a strategic shift to digital as the core of the communications platform, around which all other media pivots. Digital is the quintessential priority for the basic reason that the internet is the primary and most comprehensive source for consumer information today. When the FDA finally issues its guidance, expect the current to pick up speed, testing the acumen of drug advertisers to steer their brands forward through uncharted waters.