Jon Mandel, co-managing director of MediaCom, New York, gets the year's best prognosticator award, as he accurately predicted spending in the category would hit $500 million in 1998 (AA, March 16, 1998). He wasn't off by much -- the number was slightly over $600 million in branded and unbranded advertising through November, according to Competitive Media Reporting.
Mr. Mandel, never shy, boldly predicts pharmaceutical companies will spend $800 million to $850 million on DTC TV ads this year.
Toby Sachs, a senior VP-account director at Leo Burnett Co., Chicago, who works on Eli Lilly & Co.'s Prozac and Hoechst Marion Roussel's Allegra, says Mr. Mandel might be conservative in his estimate, contending TV spending in the category could hit the magical
$1 billion mark.
With the vast majority of this money being spent on broadcast network TV, such potential already has the networks salivating.
"Two years ago we only pulled in about $100 million from DTC," says one network executive. "Last year it was over $350 million. There aren't too many categories that the networks can say, in 1999, they expect huge increases in. It could have a significant impact on the upfront."
The upfront sales marketplace usually hits in late spring, and that is when advertisers buy most of their national TV advertising time for the upcoming TV season.
Network and cable TV have been the major beneficiaries of phamaceutical largesse. While broadcast network TV has been the primary choice for much of the spending, cable has made significant in-roads.
Merck & Co.'s Propecia hair-loss drug has been a major cable spender as it targets men. Zeneca Group spends the majority of its budget on cable -- about $10 million goes for its migraine drug Zomig.
"DTC ads are a hybrid of a brand-building spot and a direct-response spot," says Bob Murator, president-CEO of KPR, New York, a major Zeneca shop, adding, "You can target very effectively on cable; they have more inventory and are very direct-response friendly. You get get a very good cost per lead on cable."
NETWORK IN LEAD
Syndication and spot, or local TV, are the laggards in prescription DTC ads. For example, Zyrtec, the allergy medication from Pfizer -- and the third-largest TV spender last year -- spent more than $50 million on network -- but only a paltry $108,000 on syndication.
"I think the big reason for [less spending on syndication] was timing," says Mr. Mandel. "There are some blue-chip properties in syndication that these guys should be using. But with the sometimes long time it takes to get Food & Drug Administration approval for some of these DTC spots, I think it precluded using a lot of syndication."
The new Syndicated Network TV Association, under the leadership of Allison Bodenmann, has made getting DTC money for syndicators one of its priorities over the next few years.
Spot TV has had better luck with the category than syndication, but it still only brought in about $49.6 million.
Susan Cuccinello, VP-marketing development for the Television Bureau of Advertising, says historically spot TV gets about 15% of DTC spending. However, last year, for two of the top five spending brands, Propecia (the No. 2 spender) and Zyrtec, spot TV got less than 5% of the dollars. And even for Schering-Plough Corp.'s No. 1 spending Claritin allergy medicine, spot TV only received about 10% of those dollars.
Ms. Cuccinello says she's begun an outreach program, wherein the TvB approaches DTC advertisers directly to try spot TV.
LOCAL DTC COMPONENT
She says DTC advertisers run national commercials calling attention to a company's Web site, or inviting consumers to dial a toll-free number for informational brochures. She says those ads are missing a local component.
"A [local] DTC spot could be tagged with a message to go to Eckerd Drug Stores to check your cholestrol and get a coupon for a drug, which you'd take to your local doctor," Ms. Cuccinello says.
She says she hopes to entice some pharmaceutical companies to experiment with these types of ads.
"If they work, and I think they will, then spot will see more of the DTC money," she says.
Mr. Mandel says that DTC drug advertisers, "for the most part aren't really oriented to thinking about geographic targeting, so they aren't thinking spot TV."
VARIOUS TV EXECUTIONS
Thus far, DTC drug ads usually fit into one of three categories. The first one is branded, full disclosure spots. These are the commercials that seemingly get the closest scrutiny by the FDA.
For example, in January FDA took Novartis Corp. to task for its Lescol TV ads. The FDA didn't like some of the claims Novartis made about the cholesterol-lowering drug.
The second category is the reminder ad. These are spots that give the brand name, but don't explain usage.
The last category is known in the trade as disease state, or unbranded, advertising. One example of this type of advertising is Pfizer's educational campaign featuring former Sen. Bob Dole discussing erectile dysfunction. The ads are clearly meant to refer to Viagra.
"What's going to be interesting, moving forward, is to see how the drug companies integrate all three of these ads," says one agency DTC specialist.
"For example, if a certain brand feels that it is really in solid with doctors, perhaps they go the unbranded route, feeling that they'll build share because