Reports From the Media Frontiers

  • by October 24, 2002
CRMPharmaceutical Emailby Amy Corr, According to the latest data from Competitive Media Reporting, pharmaceutical houses spent an estimated $296 million on advertising across all media last year. Medicines and proprietary remedies spent a whopping $4.6 billion. Pharmaceutical advertising has been a hot commodity with traditional advertisers, and is now trickling down into the online advertising world, specifically email. In email, pharmaceutical companies have found a cost-efficient and private way to target people with specific ailments. Naturally, email networks and list brokers are jumping through hoops to ensure they have the resources necessary to accommodate these pharmaceutical companies. Here are some recent modifications.

PostMasterDirect recently added a pharmaceutical category to its ever-expanding network of 50 million email addresses. According to Michael Mayor, president and COO of NetCreations (PostMasterDirect’s parent company), adding a pharmaceutical category came from high customer demand and a lack of media available for niche targeting. "There wasn’t a proper medium to target illness sufferers. Some issues are very delicate, and email is more of a private channel to communicate through as opposed to direct mail." PostMasterDirect already has 12 million double-opt-in email addresses, with 514 health-related websites collecting the opt-in names.

Ailment-specific targeting doesn’t come cheap. B2C targeting of a broad ailment begins at $150 CPM, and B2B targeting can reach $350 CPM. Despite its novelty and high CPM, Mayor says that the pharmaceutical category has sparked a great deal of interest and is one of their top niche categories to date. PennMedia has had a pharmaceutical category since early this year, where those opting in identify themselves by their specific conditions, which Roy Weiss, EVP of Penn Media, says is an attractive feature to those pharmaceutical companies looking to target people with specific diseases and conditions. Penn Media’s recent pharmaceutical clients include Johnson & Johnson, Merck, and Ogilvy.

Penn Media also commands a high CPM for its pharmaceutical category, with pricing between $200 and $400 CPM. A disease like diabetes would run in the $200 range, with a less common disease such as Crohn’s disease costing twice that amount. PennMedia emphasizes that compared to direct mailing, its CPMs are inexpensive, stating that to reach one person via direct mailing will cost an advertiser a dollar, where via email it costs a penny a person. Weiss says that developing a relationship between the advertiser and the consumer takes time, something that the pharmaceutical companies seem willing to go along with.

"Media consumption has shifted where people are more receptive to email, and learning about diseases and medications takes both education and time."

WirelessWireless Co’s in a Bad Moody?by Amy Corr, Since November 2001, Moody’s Investors Service has been reviewing wireless companies and almost systematically downgrading their outlook to a dismal negative. Cingular was demoted in November, followed by Verizon, Sprint Corp., and Voicestream. Most recently, Moody’s targeted the wireless industry as a whole and downgraded its outlook to negative. The question at hand is this: Does a negative rating dished out by Moody’s affect the way a company runs its business from that day forward, and should ad dollars be affected? It depends on whom you ask.

Those networks singled out by Moody’s will tell you that the ratings change nothing about their business structure or projected subscriber numbers. Those not shot down by Moody’s tend to rethink their projected sales and subscribers and release a new, realistic number to aim for. Here are a few recent moves by some prominent wireless companies. Sprint PCS, whose parent company, Sprint Corp., recently had its rating lowered by Moody’s, says this downgrade has no effect on any present or future campaigns that Sprint has in the works. According to Sprint spokesman Mark Bonavia, "Moody’s downgrade has no impact or effect on the way that we do business," and future company plans will remain stationary. Sprint PCS recently announced that its wireless subscriber goal would be missed by as much as 15%, citing "discounting by competitors." On a positive note, Virgin Mobile USA recently launched its long-awaited wireless phone service geared toward people under 30. Virgin Mobile USA’s "pay-as-you-go plan" will be nationwide by the end of August, and will offer young people with money to spend two cell phone options: The "Party Animal" for $99 and "Super Model" for $129. Virgin Mobile USA will use Sprint PCS as its wireless service provider. Nokia, the largest wireless phone maker, has slashed its projected sales for the second half of this year. Initially estimating a 15% increase in sales, Nokia has trimmed that number to about 10%, but still expects to hit its anticipated profit target. Last and certainly never least, Microsoft has teamed up with Verizon Wireless to offer Verizon Wireless customers MSN content and data such as MSN Messenger and Hotmail. This deal goes far beyond having the capability to Instant Message a friend from your wireless device. Microsoft and Verizon are intent on developing new services for clients in the near future, with a Windows-powered Pocket PC as something to look forward to. Yusuf Mehdi, vice president of MSN, says "In the future, MSN and Verizon Wireless will work together to deliver the most innovative and industry-defining mobile services ever available to consumers." A poor Moody’s rating may prove to be a bump in the road for this industry, but its players are committed to succeeding and are in this for the long haul.

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