Pharma's DTC cuts scare ad industry

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