According to a report released last month by Accenture, three of the top five business priorities for the drug industry are reducing costs, mastering multi-channel marketing and improving the use and effectiveness of digital marketing. In order to accomplish the latter, drug executives are looking at increased use of analytics to target spend and drive ROI along with increased use of digital interactions. What effect is this going to have on DTC marketing?

According to Nielsen, DTC marketing media spending was down 11.5% versus 2011 but spending on media for the web was down a whopping 33%. It’s easy to understand the decline. First of all, using mass marketing on the Internet is ineffective and usually results in a very low ROI. Second, with more big name drugs coming off patent, there just aren’t many reasons to spend a lot of money for digital media right now. However, there are still opportunities.

One of the great advantages of the Internet is that it allows marketers to target their online media more effectively. Tools such as behavioral targeting give marketers a greater reach to specific audiences than demographic targeting. But I still believe that overall DTC spending in 2013 will decline, and that includes spending on media. However, I agree with Accenture that executives see digital as a way to reduce costs and improve ROI.

The biggest misconception about digital marketing is that it’s less expensive than offline marketing. This is not true. Digital ads should not be developed using templates from offline advertising. They have to be tested and optimized to ensure that the brand’s message is cutting through the clutter. Pharma product websites, for the most part, have remained like motionless billboards with the feeling that once the website is up “we’re done.” This philosophy is contrary to the ways that consumers use the Internet for health. In an age of rapid information, consumers want updated information on health conditions and medications as soon as it’s available and if pharma can’t provide it they will turn to someone else.

Consumer packaged goods companies are quickly learning that investing resources in digital marketing, including the building of capabilities, is helping their digital marketing to become more of a multi-channel marketing strategy. The key issue facing pharma marketers is both understanding the online marketing environment and determining which tactics provide the greatest ROI in an era of shrinking budgets.

Digital agencies can help DTC marketers sort out the complex world of digital marketing, but they have to set clear and concise expectations up front, including the definition of ROI. Agencies on the other hand can no longer be task masters. They have to lead pharma marketers through the maze of digital marketing and educate the organization in the process. Digital marketing could be the future of DTC marketing, but don’t make the mistake that it’s going to be less expensive.

  • Richard Meyer

    Richard Meyer has worked in healthcare marketing for more than 12 years and is the author of www.worldof dtcmarketing.com and www.newmediaand marketing.com. He is the Director of Online Strategic Solutions.

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