advertising spending

Pharma's DTC cuts scare ad industry

Tracy Staton — Fri, 14 Nov 2008 11:12:12 -0500

Media buyers are weeping for pharma's long-lost ad budgets. For two years in a row now, DTC spending has dropped--and for 2008 stands to drop even more than media companies had expected. Through August, measured DTC spending was down 6.3 percent to $3.175 billion, which can be projected out to a full year's spending of $4.76 billion. Compared with last year's $5.26 billion, that's a 9 percent slip. Previously, industry types had thought 2008 spending would hit $5 billion, Pharmalot says.

The ad industry gets scared when pharma's spending is off, Jon Swallen of TNS Media Intelligence told Ad Age, because drugmakers are seen as an indicator of the overall health of marketing budgets. "When drugmakers sneeze, ad buyers and sellers worry about catching a cold," he said.

The biggest cutbacks came in corporate image campaigns and disease awareness promos. These two segments have dropped by a whopping 63 percent since 2006. That year was pharma's DTC peak, with $5.4 billion in measured ad spending. And if the current $4.76 billion estimate holds true, pharma will have fallen almost as far back as its 2005 ad budget of $4.6 billion.

- read the Pharmalot post
- check out the Ad Age story

Do TV ads cost more than they're worth?

Tracy Staton — Tue, 04 Nov 2008 11:01:56 -0500

John Mack at the Pharma Market Blog puts a pencil to paper and finds that cutting DTC ads off television would save pharma $5 billion--and that savings would offset the resulting $2 billion hit to the industry's bottom line. Check his math here: Report

Drug sales and marketing update: September 2008

Maureen Martino — Mon, 06 Oct 2008 13:24:57 -0400

Last month we took a look at Big Pharma's top 13 advertising budgets of 2007, but it appears that 2008 budgets aren't looking quite as robust. According to Jim Edwards at BrandWeek, the money pharma is spending on ads is in decline this year for the first time ever. In addition, the tough economy is negatively impacting drug sales as consumers cut back on non-essential meds. In an interview, Walgreen CEO Jeffrey Rein said this is the tightest market for prescription drugs in his 27-year career.

Merck and Schering-Plough both announced more sales rep layoffs last month in what is becoming a familiar refrain in 2008. On a brighter note, Pfizer said it would be beefing up its sales force in emerging markets. As other big drug developers look to expand their presence in this area, it may present a new opportunity for reps who've seen jobs disappearing in the U.S. and Europe.

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Sepracor slashes Lunesta ad budget

Tracy Staton — Mon, 06 Oct 2008 10:36:32 -0400

Spotted a moth lately? Fewer and fewer people have, and for good reason. Sepracor has started to cut back its consumer ads, making that familiar Lunesta moth something of an endangered critter. At least in comparison with previous years, when the sleep-aid mascot fluttered about on TV screens everywhere.

What gives? Well, the market for insomnia meds is slowing somewhat, the Boston Globe reports. Plus, Sepracor's sleeping-pill competitors are scaling back their consumer promotions, too. And Sepracor is keen on shifting ad dollars to products that might offer more bang for the promotional buck. Analysts appear to agree with the move; according to Ian Sanderson of Cowen & Co., "most of the Street felt the ad spending could not be sustained."

Last year, Sepracor spent nearly $300 million on advertising Lunesta, making it the most heavily advertised drug in the country. That budget beat out the second-most advertised drug, Sanofi's insomnia pill Ambien CR, by more than $100 million. This year, Sepracor has so far dropped to fifth place among the most advertised meds, again just ahead of Ambien.

- read the story in the Globe

Pharma cuts 2008 ad budgets

Tracy Staton — Tue, 30 Sep 2008 10:37:40 -0400

Last week, we showed you what happened with pharma's ad spending in 2007. Now, we're here to tell you what ad budgets look like in 2008: not good. According to Jim Edwards at BrandWeek, the money pharma is spending on ads is in decline this year for the first time ever. Health education campaigns--which aim to raise awareness of a disease or disorder without mentioning brand names--are among the hardest hit. Spending on these sorts of ads dropped 3 percent during the first half of the year, to $2.4 billion.

Looking at the past two years, that number looks pretty small. In 2006, drugmakers spent $660 million on image and education ads. In 2007, that fell to $341 million. So far this year, the same budgets now total $138 million, a 22 percent drop from the same period last year.

Times are tough all over, it's true. But unbranded advertising--while popular with some because there's no need for a litany of side effects--is a struggle to justify at cost-conscious companies. Because they aren't directly linked with sales, they're easier to cut than branded ads can be.

Pfizer is the lone exception to this new rule. It's actually increasing educational-ad spending this year with a big stop-smoking push designed to support Chantix.

- read the BrandWeek story

Boehringer Ingelheim - Top 13 Advertising Budgets

Tracy Staton — Tue, 23 Sep 2008 16:39:10 -0400

Company: Boehringer Ingelheim
2007 Ad Spending: $505.3 million
2006 Ad Spending: $191.8 million

Breakdown

Magazines: $63.4M
Newspaper: $900,000
Outdoor: $100,000
TV: $228.8M
Radio: $2.2M
Internet: $7.8M

Where Boehringer is spending money: As one of the few drugmakers to boost U.S. ad spending in 2007, Boehringer Ingelheim pumped up its budgets for several products. Its prostate drug Flomax got a 65 percent boost in spending to $87.3 million, and heartburn treatment Zantac saw a 29.9 percent hike to $41.9 million. But the biggest leaps came in spending on chronic obstructive pulmonary disease drug Spiriva and restless legs-slash-Parkinson's treatment Mirapex. Spending on Spiriva grew to $81 million from $22.9 million, and Mirapex got $60.9 million for its first big campaign.

Those big investments paid off: Spiriva "led the way" in boosting Boehringer's revenues, the company said in announcing its 2007 results. The COPD drug delivered a 35 percent boost in global sales to €1.8 billion. Mirapex sales grew 26 percent to 644 million euros. And Flomax posted a 19 percent rise to €1.02 billion.

Where Boehringer isn't spending money: Boehringer didn't push one of its biggest drugs via U.S. measured media: Micardis, a blood-pressure drug. The product nevertheless grew sales by 23 percent to $1.12 billion.

Eli Lilly - Top 13 Advertising Budgets

Tracy Staton — Tue, 23 Sep 2008 16:32:45 -0400

Company: Eli Lilly
2007 Ad Spending: $774.2 million
2006 Ad Spending: $511.1 million

Breakdown

Magazines: $47.2 million
Newspaper: $1 million
Outdoor: $100,000
TV: $291.2 million
Radio: $3.2 million
Internet: $5.7 million

Where Lilly is spending money: Eli Lilly pumped up its media push on its antidepressant Cymbalta by a decent 17.5 percent to $184 million. Percentage-wise, Byetta scored the biggest increase-to $31.7 million from $773,000. And while spending on Cialis grew to $126.5 million from $45 million, that boost came in part from Lilly's buyout of its partner on the drug.

Results? Well, industry watchers liked Lilly's "Depression Hurts" campaign for Cymbalta; Medical Marketing & Media deemed it the best overall consumer campaign. And Cymbalta sales growth reached a whopping 60 percent, giving Lilly a $2.1 billion infusion to the top line, $1.8 billion of that in the U.S. alone.

Meanwhile, Cialis chalked up a 20 percent hike in U.S. sales to $485 million. But the Byetta push was more successful, yielding a 48 percent boost in U.S. sales to $636 million; worldwide sales were slightly higher at $650 million. Lilly's share of that amounted to $330 million, because it sells the drug in partnership with Amylin Pharmaceuticals.

Where Lilly isn't spending money: Lilly backed off on advertising its number-one seller, the antipsychotic med Zyprexa. Concerns that the drug caused excessive weight gain in some patients-even leading to diabetes-were expected to depress sales. Plus, the company was fighting lawsuits from patients and state governments over its marketing of the drug. Lilly still managed to grow Zyprexa's U.S. revenue, though: the drug brought in $2.2 billion in the U.S., a 6 percent increase. The company offset falling demand by increasing prices.

Merck - Top 13 Advertising Budgets

Tracy Staton — Tue, 23 Sep 2008 16:27:51 -0400

Company: Merck
2007 Ad Spending: $751.8 million
2006 Ad Spending: $1.02 billion

Breakdown:

Magazines: $125.4 million
Newspaper: $13.6 million
Outdoor: N/A
TV: $212.2 million
Radio: $300,000
Internet: $24.5 million

Where Merck is spending money: The company slashed its ad spending by about $250 million in 2007. But it still managed to increase media support for the cholesterol drug Zetia to $105.9 million from $93.64 million, a 13 percent hike. The company's biggest ad push was for Gardasil--its vaccine for human papillomavirus, which causes cervical cancer and genital warts. Merck allocated $101.4 million to the shot, up 137 percent from the previous year's $42,740.

That's one reason Gardasil led a big increase in Merck's vaccine division's revenue. The HPV vaccine brought in $1.5 billion worldwide, up from $234.8 million in 2006, when the shot was first approved in the U.S.

Global sales of Zetia grew by 25 percent to $2.4 billion. But Merck doesn't get all that revenue; the drug is part of a joint venture with Schering-Plough, along with a sister product, Vytorin, that combines Zetia with the Merck statin Zocor. The entire Merck/Schering-Plough joint venture added $1.83 billion to Merck's revenues, according to financial statements.

Where Merck isn't spending money: Merck almost got out of the image-advertising business, slashing its corporate brand budget by 78 percent, from $172 million to $38.6 million. And the company cut back its spending on the allergy and asthma med Singulair by 27.5 percent, to $82 million. Osteoporosis treatment Fosamax also saw the knife, with a 49 percent cut to $32.7 million. Singular still managed $4.3 billion in global sales, up from $3.6 billion the previous year. Fosamax, on the other hand, saw its sales drop slightly to $3.05 billion.

Wyeth - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:24:13 -0400

Company: Wyeth
2007 Ad Spending: $1.078 billion
2006 Ad Spending: $1.051 billion

Breakdown

Magazines: $94.7 million
Newspaper: $9.1 million
Outdoor: $400,000
TV: $296.4 million
Radio: $19.8 million
Internet: $14.7 million

Where Wyeth is spending money: While other companies spent big on direct to consumer advertising, Wyeth took the more indirect approach. The company spent $16.7 million promoting KnowMenopause.com, a website educating women about menopause and the company's HRT drug. It also shelled out $13.7 million on Yourtimeforchange.com, a website that discusses depression and treatment options (Yourtimforchange.com is no longer on the web).

Web aside, $59.6 million was spent on promoting Wyeth's biologic Enbrel, which treats rheumatoid arthritis, among other ailments. The most money by far ($114M) went to Advil advertising. Wyeth also boosted the vitamin brand Centrum's budget 44.5 percent. The biggest jump, however, was for the hormone replacement therapy Prempro, which saw a spending increase of 249 percent.

Where Wyeth isn't spending money: Enbrel advertising dropped 14.7 percent in 2007. Like many other drugmakers, Wyeth's image advertising dropped significantly, falling 63 percent.

Johnson & Johnson - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:20:16 -0400

Company: Johnson & Johnson
2007 Ad Spending: $2.409 billion
2006 Ad Spending: $2.401 billion

Breakdown

Magazines: $ 402.1 million
Newspaper: $ 50.9 million
Outdoor: $ 4.8 million
TV: $ 879.4 million
Radio: $ 34.8 million
Internet: $ 49.2 million

Where J&J is spending money: J&J spent $50.2 million promoting its epilepsy drug Topamax. The drug--which was originally scheduled to go off-patent in September--won extended market exclusivity for one year based on a new pediatric indication for the med. The multi-purpose biologic Remicade saw $14.3 in advertising spending. Overall, J&J spent $49.2M on Internet advertising--far more than any other drug company.

Though J&J spent a substantial amount on prescription drugs, consumer product advertising was the name of the game in 2007. Neutrogena ($165 million), Tylenol ($152 million), Aveeno ($126 million), and Listerine ($111 million) made up the company's top four ad campaigns. J&J also spent $80 million on image advertising, though that was down from $100 million in 2006.

J&J boosted it's Internet advertising budget 41 percent in 2007 to 49.1 million. The company also embraced outdoor advertising--that budget increased 470 percent to $4.8 million. National radio spots were up 71.9 percent to 9.2 million. Overall, company sales rose 14.6 percent to $61 million.

Where J&J isn't spending money: None of J&J's top five ad campaigns included spending on prescription drug advertising. Remicade was the only prescription drug that had an increased budget in 2007 (there was no budget for the biologic in 2007). Topamax dropped 16.2 percent and Zyrtec dropped 17.8 percent. Newspaper advertising fell a whopping 98 percent to a paltry $149,000 from 7.4 million.

GlaxoSmithKline - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:17:50 -0400

Company: GlaxoSmithKline
2007 Ad Spending: $2.457 billion
2006 Ad Spending: $2.505 billion

Breakdown

Magazines: $387 million
Newspaper: 13 million
Outdoor: $900,000
TV: $742.4 million
Radio: $14.2 million
Internet: $29.4 million

Where GSK is spending money: The biggest advertising price tag was attached to Advair, GSK's blockbuster asthma medication, which rung up $127M in advertising spending (photo). The company spent $107.8M on advertising for the osteoporosis med Boniva, which features celebrity spokesperson Sally Field (video). That's a 7.4 percent increase from 2006. Other big campaigns included Requip for restless leg syndrome and Parkinson's, Avodart for enlarged prostate and Valtrex for genital herpes.

On the consumer products side of things the company ramped up advertising for the OTC diet drug Alli to $90 million (the drug was not approved for OTC use in 2006). Spending on the Aquafresh brand soared 213 percent, from $19.4 million to $61 million.

Overall, GSK's sales grew 6.9 percent to $45.5 billion and earnings increased 5.6 percent to $10.6 billion.

Where GSK isn't spending money: GSK spent 1.9 percent less on advertising in 2007 than it did in 2006. And although Advair still topped the company's budget, spending on the drug dropped 34 percent, from $194 million to $127 million. The company significantally cut back on ad budgets for Imitrex (down 50 percent), Vesicare (down 42 percent) and Coreg (down 68 percent). GSK also cut its image advertising budget by almost 68 percent in 2007. Ad spending was cut in most media categories, with the exception of Spanish language media, radio spots and Internet advertising.

Bristol-Myers Squibb - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:14:17 -0400

Company: Bristol-Myers Squibb
2007 Ad Spending: $796.3 million
2006 Ad Spending: $690.6 million

Breakdown

Magazines: $158.3 million
Newspaper: $6.8 million
Outdoor: $1 million
TV: $201.4 million
Radio: $200,000
Internet: $7.8 million

Where BMS is spending money: By far, BMS spent the most money on advertising Plavix ($174.8 million), the company's blockbuster anti-clotting drug, which was up 16.7 percent from 2007. Spending on company image advertising ($51M) and and the recently-approved rheumatoid arthritis drug Orencia ($35M) rounded out BMS's top campaigns.

The company focused on a key media area in 2007. Television ad spending was up in all categories: network TV (11.8 percent) spot TV (320 percent), syndicated TV (48 percent) and network TV (206 percent). In addition, B-to-B magazine ad spending was up 863 percent. BMS's ad budget grew 15.3 percent in total, and sales were up 12 percent to $19.3 billion.

Where BMS isn't spending money: The ad budget for psychiatric drug Abilify was down slightly from $101 million to $98 million. And the money that BMS dedicated to television commercials was taken from newspaper, radio and internet advertising budgets, all of which fell in 2007.

Bayer - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:11:42 -0400

Company: Bayer
2007 Ad Spending: $861 million
2006 Ad Spending: $683.4 million

Breakdown

Magazines: $102.5 million
Newspaper: $16.1 million
Outdoor: $900,000
TV: $330.6 million
Radio: $18 million
Internet: $5.3 million

Where Bayer is spending money: Almost all of Bayer's top products enjoyed a budget boost, but the largest increases went to Bayer's contraceptives Yaz ($75.8M) and Mirena ($39.5M), which were hiked 253 percent and 209 percent, respectively.

Most of Bayer's consumer products were up as well. Aleve--the company's biggest campaign--was up 42 percent to $87 million, and Bayer's image-advertising came in third behind Yaz with a $74 million budget. One A Day, Ascensia, Alka-Seltzer and Midol rounded out Bayer's ad budgets that saw increases in 2007.

The company upped ad spending for magazines, along with newspaper, TV and local radio. Overall, Bayer's 2007 sales increased a hefty 22 percent to $44 million.

Where Bayer isn't spending money: The only big product that experienced a budget cut was the veterinary drug K9 Advantix, down 18 percent from 2006 to $18 million. The company backed off national newspaper spots and radio, as well as Internet advertising, which was down over 50 percent.

Schering-Plough - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:08:24 -0400

Company: Schering-Plough
2007 Ad Spending: $1.092 billion
2006 Ad Spending: $883.6 billion

Breakdown

Magazines: $54.4 million
Newspaper: $6 million
Outdoor: $0
TV: $426.7 million
Radio: $6.1 million
Internet: $9.1 million

Where Schering-Plough is spending money: Schering-Plough spent $122 million promoting the allergy drug Nasonex. Another $53 million went to a 325 percent increase on advertising for the asthma drug, Asmanex. Most of the company's spending--$148.6 million--went to promoting the non-prescription allergy drug, Claritin.

Schering significantly increased its advertisements in three areas. It's spending on internet ads rose 104 percent and national newspaper placements were up 262 percent. Like GSK, Schering-Plough saw an opportunity in the Spanish-language market and boosted its budget in Spanish-language magazines ads 512 percent. All told, sales increased 19.8 percent in 2007, from $10.5 billion to $12.6 billion.

Where Schering-Plough isn't spending money: Advertising for the contraceptive NuvaRing dropped 58 percent. National and local radio budgets were down 62 percent and 71 percent, respectively. The company's newspaper advertising budget was down almost 58 percent.

Pfizer - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:05:21 -0400

Company: Pfizer
2007 Ad Spending: $1.253 billion
2006 Ad Spending: $1.006 billion

Breakdown

Magazines: $225.2 million
Newspaper: $33.3 million
Outdoor: $1.2 million
T: $456.6 million
Radio: $11.3 million
Internet: $24.2 million

Where Pfizer is spending money: While many other drugmakers cut back on ad budgets, Pfizer increased it's spending by almost 25 percent in 2007. No surprises here--the company shelled out $187.3M on advertising for Lipitor, the world's best-selling drug. The budget for Caduet promotion soared 105 percent from 2006, with $89 million spent promoting the Norvasc/Lipitor combo in 2007. Lyrica also saw it's budget skyrocket 123 percent. In 2007, Pfizer won a new fibromyalgia indication for Lyrica--originally a nerve pain drug--and spent almost $74 million on promotion. The anti-incontinence drug Detrol LA and, of course, Viagra, rounded out Pfizer's top five campaigns.

Despite the significantly increased ad budget, Pfizer's sales totaled $48.4 billion in 2007--up just .1 percent from $48.3 billion in 2006.

Where the company isn't spending money: Viagra's budget dropped 35 percent in 2007, and Pfizer completely abandoned the exhaled insulin drug Exubra after it returned drug rights to Nektar in November. The company also spent almost 48 percent less on image advertising than it did in 2006.

Is Pfizer consolidating its ad-agency work?

Tracy Staton — Tue, 24 Jun 2008 10:24:35 -0400

When a drugmaker with an $800 million advertising-slash-marketing account sends out a request for information to its current agencies and to a handful it hasn't worked with before, speculation is bound to be rampant. That's what's happening with Pfizer and its recent RFI, designed to gather info from consumer shops and from doctor-oriented groups, too. Among the solicitees: Kaplan Thaler Group, McCann Erickson, Cline Davis & Mann and Euro RSCG Life.

The way the RFI was worded has prompted rumors that Pfizer wants to consolidate all its business--advertising, direct marketing, interactive marketing, public relations, et al--at a single holding company, just as Sanofi-Synthelabo did at Publicis Groupe in 2003. Pfizer itself says it's not that far along in the process yet. Another possible indicator: Pfizer Australia consolidated its biz with IPG earlier this year.

Right now, Pfizer has its business parceled out among several agencies for each discipline. Maybe its quest to streamline its operations is extending to its ad-and-marketing outsourcing, too.

- read the story in AdWeek

Pharma racks up multibillion-dollar marketing bill

Tue, 07 Aug 2007 06:59:56 -0400

Drug marketing spending is staggering when you think about it: companies shell out $5 billion on DTC ads and $19 billion on so-called "doctor education." Their return on investment here isn't too shabby either: of the $279 billion spent on prescription drugs in 2006, Americans chose brand names 80 percent of the time.

The numbers tell a story that sharpens up what's becoming an old argument. Drug companies say it's all about educating patients and keeping doctors up-to-date on the latest science and technology. Critics say common conditions fixed with cheaper drugs go undertreated, but those that require expensive brand-name meds--the meds that are most heavily advertised to patients and docs alike--get plenty of attention. These branded drugs also contribute to skyrocketing healthcare costs: even a few billion off the top of that brand-name-fueled $279 billion could help. Agreed?

- read the spending report from The Los Angeles Times

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