TV SELLERS SAVE A CHAIR OUT FRONT FOR DRUG MARKETERS; BIG TIME: IN STUNNINGLY SHORT AMOUNT OF TIME, CATEGORY A PLAYER

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For tv executives, direct-to-consumer pharmaceutical advertising continues to function like a popular Internet initial public offering: the value just keeps soaring upward.

This year's upfront media-buying season should be no different as executives are expecting the relatively new category to settle in next to automobiles and technology as a major player. IMS Health reports pharmaceutical marketers spent $664.4 million on TV advertising in 1998 up from $309.6 million in 1997.

"If history says anything you can watch the line rise on spending," says Joe Abruzzese, president of CBS Television Network Sales. "Why should it not continue?"

SCATTER BEST OPTION

While media buyers acknowledge the category's arrival, some say the scatter market is still their best option because of the uncertainty surrounding the U.S. Food & Drug Administration's approval of drugs and oversight of commercials.

"So much depends on FDA approval and timelines," says Bob Igiel, exec VP-U.S. director of broadcast buying and programming for Media Edge, New York. "The planning process is one that requires flexibility, and flexibility requires a very careful approach to any long-term commitments."

Since FDA loosened its rules on DTC TV advertising in mid-1997, overall DTC spending has grown from '96 to $1.3 billion in 1998 in all measured media, according to IMS. An estimated $1.7 billion is expected to be spent this year, according to Michael Russell, analyst for Morgan Stanley Dean Witter & Co.

The boom in TV advertising drives the increase, though Mr. Russell says the growth rate may eventually slow down.

"There's a point where pharmaceutical companies are going to join the pack and grow along with everybody else," he says.

Warner-Lambert Co.'s Lipitor is one newcomer to TV advertising. The No.1 anti-cholesterol drug launched a national TV and print campaign in February. Bates Worldwide's Healthcom, New York, handles creative and. J. Walter Thompson USA, New York, buys media.

STUNNING AMOUNT

Larry Goodman, president of sales and marketing for CNN, says his network estimates that for all categories of advertising, about $22 billion was spent in 1998 network and cable combined.

Of that, about 8% was spent in the pharmaceutical category, a huge increase over the $500 million to $600 million in 1997, he says.

This year, Mr. Goodman expects pharmaceutical marketers to spend strongly in the upfront. He expects an increase in dollars, though he's forecasting a decrease in the category's percentage of the overall upfront-buying pie.

Much of that has to do with an expected jump in advertising surrounding Internet sites and products, he says, though other cable network executives predict that Internet marketers will spend primarily in the scatter marketplace.

"More and more money has been put into [DTC advertising] since the government has allowed it on TV, and we expect more money next year," Mr. Abruzzese says.

CBS benefits from its older demographics because much of DTC advertising is aimed at an older audience, he says.

Nielsen figures provided by CBS show its viewers have a median age of 52.9. Median ages at the other networks are 43.2 at NBC, 41.6 at ABC, 37.2 at UPN, 34.1 at Fox and 26.5 at WB.

J&J EYES SEASON

Andrea Alstrup, VP-corporate advertising for Johnson & Johnson, says she expects the company to continue as a major upfront buyer.

"We've always been very strong upfront advertisers," Ms. Alstrup says. "Our policy has always been to buy in the upfront marketplace."

Susan Kaufman, exec VP-account director at Media Edge, says "pharmaceutical companies are getting more comfortable with TV" and "getting smarter about how to use it."

Media Edge handles buying for Glaxo Wellcome and handles buying for the drug Celebrex, jointly marketed by Monsanto Co. and Pfizer.

Ms. Kaufman says this spring marks the first upfront-buying season where some marketers understand DTC advertising's "range of options."

Two years ago, marketers were still waiting to hear whether or not the FDA would loosen restrictions, while last year there was some "tentativeness" and first-year jitters.

"They'd never done it before," she says. "I think they were coming with a fair amount of money not knowing what worked. Two years after, they have the same or increased money, but with knowledge of what works."

Familiarity, she says, could change the buying climate."I think we will be tough negotiators knowing what we want. We're not coming in like wide-eyed kids anymore."

GROWING MARKET

A belief that DTC advertising works is one reason why Joe Ostrow, president-CEO of the Cabletelevision Advertising Bureau, expects a growing upfront marketplace. He predicts that new, potentially blockbuster drugs expected to receive FDA approval in 1999 to receive heavy advertising support. Meanwhile, Mr. Ostrow expects similar breakthrough drugs already available could drop money into the upfront.

"[DTC] is basically less than two years old and has been zooming through the roof for cable and broadcast because it provided a totally new opportunity for the advertisers to take advantage of sight, sound and motion, rather than be wedded to the printed page," Mr. Ostrow says. "So we expect it to be a very dramatic growth category."

The pipeline of new drugs awaiting approval includes Vioxx from Merck & Co. for osteoarthritis. Monsanto's G.D. Searle & Co. pharmaceutical division's osteoarthritis drug Celebrex also is making a DTC push.

According to Monsanto, Celebrex -- introduced in January -- has garnered $279 million in sales through the end of March. That's out of $825 million of Searle's total pharmaceutical sales for the first quarter.

WAITING FOR VIOXX

But uncertainty as to when the FDA will give clearance to drugs such as Vioxx -- which an FDA advisory panel has recommended be approved and could hit the market this summer -- or the content of commercials -- can make upfront buying less palatable to some marketers, some buyers say.

Judy Franks, a senior partner and group media director for Euro RSCG Tatham, Chicago, says the regulatory barriers bring an extra twist to upfront negotiations with the networks.

"It will be interesting to see how the networks try to accommodate the pharmaceutical companies," Ms. Franks says. Tatham handles buying for Fleet Pharmaceuticals.

"The networks are interested in getting a chunk of this money. This is new money and very helpful economically. They're going to have to think through it to see how to help the pharmaceutical companies deal with regulatory issues out of

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