INTERNET COULD SEE MORE WEB SITE SPONSORSHIPS: SPONSOR-SAVVY DRUG MARKETERS MAY SPEND ABOUT $130 MIL ONLINE BY 2002

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Sponsorships of non-profit sites and other forms of direct-to-consumer online advertising are growing exponentially as prescription drug marketers try to tap the legions of health information seekers who make up a huge chunk of Web traffic.

Site sponsorships only amounted to about $1 million in 1998, about half of all online advertising by pharmaceutical companies, according to Drew Ianni, analyst at consultancy Jupiter Communications. But he expects rapid growth in investment over the coming years.

"I would expect that $1 million [in sponsorship fees to non-profits] to double in 1999 for sure and possibly even triple," says Mr. Ianni, adding that he expects similar growth in commercial content and advertising.

"I think there are going to be more opportunities for pharmaceutical companies to advertise and they're going to be spending more, probably exponentially more," he says.

DTC A SIGNIFICANT FACTOR

By 2002, Jupiter projects total health and medical advertising online will top $265 million, with DTC pharmaceutical spending making up half of that.

It's hard to know how much will be devoted to sponsorships vs. other forms of online advertising and promotion, but Mr. Ianni estimates the industry currently puts about half of its online investment into sponsorships, compared with about 30% for advertisers overall, because more sponsorship opportunities exist in healthcare.

One reason drug companies are flocking to the Web is because patients are there, says Meg Walsh, managing director of Healthtech Digital Communications, a unit of Lowe & Partners/SMS, New York.

More than 60 million Americans went online in search of health and medical information last year, according to a December 1998 Louis Harris poll. Medical and health information accounted for 40% of Internet information searches, according to research by USA Today. And a survey released last year by Princeton Survey Research found that 67% of physicians report they have patients who come in with information gathered from the Internet.

Despite such numbers, doubts remain about the return on investment for online advertising generally and site sponsorships specifically.

ROI HARD TO FIGURE

"One reason why there's not as much investment in the Internet as people might expect is that it's very difficult to [do return on investment analysis]," says Robert Pearson, exec VP for GCI Healthcare, a unit of Grey Advertising, New York. "We're not at the stage yet where we're really able to measure [the impact of Web advertising or sponsorships] with any kind of teeth."

Non-profit sites, in particular, offer sometimes suspect sponsorship deals, says Jim Sandino, general manager of Lowe McAdams Direct, another unit of Lowe.

"Many times [clients] don't know quite what they're getting," Mr. Sandino says. "As I look at some of the sponsorship offerings, some of them are inordinately expensive without offering very much in return for the money they're paying."

CLARITIN'S SUCCESS

But one Lowe client, Schering-Plough Corp., has had success with Claritin sponsorships on such sites as the Mayo Clinic Health Oasis (www.mayohealth.org) and other forms of online ads, such as "keyword buys" on such search engines as Yahoo! and banner ads in the health sections of America Online or other Web portals, according to an executive familiar with the brand.

In 1998, more than 200,000 consumers per month visited the Claritin Web site (www.claritin.com), with at least 90% of that traffic coming directly from click throughs from sponsored sites or other online advertising, the executive says. Visitors to the Claritin site spent an average of seven minutes there, and about 20% left their e-mail addresses, amounting to a cost of about $1.70 in online ad spending and site maintenance costs for each e-mail address collected, Mr. Sandino says.

Mr. Pearson says the experience for Claritin may not hold true for the many prescription drugs that spend far less on marketing and may need to channel those funds into more reliable advertising investments.

SMALL ADVERTISERS BENEFIT

But Ms. Walsh says smaller advertisers need sponsorships and other online advertising even more than Claritin-size accounts.

"The Internet needs to be an even more important part of the budget for small advertisers," she says, "more important than other media because your ability to target your consumers is so much greater and because you can gather useful data and answer their questions directly."

The key is developing the right kind of sponsorship, according to Ms. Walsh.

BUILDING A DATABASE

"I'm not interested in just an opportunity for a very expensive sponsorship of an area on a site. I'm interested in -- 'can you feed consumers into a mini-site for me and give me data back on the consumers?' " she says.

Sites that succeed in attracting sponsors, she says, are those that provide a comprehensive marketing package. Such deals go beyond a simple sponsor message to include banner advertising and even links to a special sponsor area within the site so that Web surfers don't have to leave the site to get sponsor information.

Satellite sites on sponsor pages help address another shortcoming with many of them -- lack of reliable traffic data, Ms. Walsh says. By setting up a separate sponsor site, it's easier to track how many potential consumers the site actually delivers to the brand.

OPTIONS INCREASE

With Web portals, such as America Online, and news sites, such as CNN.com, developing health areas, the options for drug marketers are growing, and online advertising is increasingly becoming part of multimedia negotiations, Ms. Walsh says.

"The biggest trend that I see," says Mr. Pearson, "is that [drug] companies are starting to look at the Internet the same way they look at other media and

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