Based on first half?spending,?DTC?advertisers seem to be?spending?about the same as the first half of 2012. Kantar Media reports?spending?was $1.8 billion versus $1.7 a year ago. After a very weak 2012 with double digit declines, it looks like?2013?will not see negative numbers.
?No indicaton...brands are souring on DTC.? - Bob Ehrlich
The reasons for stabilization are new brands doing heavy?DTC. Toviaz and Xarelto were new in?2013?and spent nearly $80 million in the first half of?2013. We also saw a major increase in testosterone brands Androgel and Axiron which nearly doubled?spending?in the first six months.
DTC?spending?totals have been down recently as brands have gone off patent. There is no indication that brands are souring on?DTC?as a promotional tool. Almost all new brands that expect to get to a billion dollars or more use?DTC. Will we get back to the $5 billion peak we saw about five years ago? That will depend on new brand launches and the categories they represent.
The best brands for high?spending?are obesity, heart disease, arthritis, depression, and diabetes. These categories are growing in incidence. Aging boomers will look forward to continuing leaps in treatments for these conditions. There is no doubt that mass media remains the favored tool among drug marketers to create awareness among prospective users.
There is no evidence that television is suffering among drug advertisers as the medium of choice. The 50+ audience still relies on television to hear about new drugs. Television?spending?was up 3.6% and remains about 60% of the marketing mix. Magazines are holding their position as the number two medium with no change versus year ago. What has seen a 27% decline is newspapers which is no surprise given the increasing number that are relying on digital editions.
While?DTC?for drugs and devices may be flat, what will grow is?spending?for health care service advertising. If we define?DTC?more broadly than pills and devices, we are entering a boom period for direct consumer marketing of services. Hospitals, doctors, diagnostic test centers, insurance companies, laboratories, mini clinics and genomic services will grow dramatically in the next five years in their?spending?on marketing. Like it or not, consumers will get less subsidy from employers for health?spending. Higher deductibles and co-pays will force consumers to shop more carefully for their services. Service providers will need to sell their points of difference as consumers realize that they are paying their own way at least up to a deductible level that is $2500 or more.
We can expect much more transparent cost information to come from providers. The reality is most people will never exceed their deductible and therefore it is entirely their money being spent. That means there will be a financial incentive to find low cost/high quality providers. The best advertising will be to differentiate one service provider from another and price will be a major factor.
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