SOURCE: Cutting Edge Information

Cutting Edge Information

May 17, 2011 09:13 ET

Pharmaceutical Brands Find Tougher ROI on Direct-to-Consumer Advertising

Branding Campaigns Reaching Point of Diminishing Returns Sooner in Recent Campaigns, New Research From Cutting Edge Information Finds

RESEARCH TRIANGLE PARK, NC--(Marketwire - May 17, 2011) - Direct-to-consumer (DTC) advertising remains a key piece of successful marketing efforts. However, product teams are growing less confident of DTC's return on investment potential for pharmaceutical brand value.

According to "Pharmaceutical Brand Lift: Marketing ROI and Budget Allocation," DTC demonstrably contributes to the bottom line, but companies have found that greater investment sometimes does add brand value as in past campaigns. The result is greater hesitancy to put dollars into larger campaigns.

Companies report earning 16% more than if they were to discontinue DTC and keep all other spending levels the same. However, if given additional theoretical marketing dollars to spend, none of the companies surveyed for the study would invest in greater DTC advertising. Instead, they would put the money into other brand-building tools.

"Direct-to-consumer advertising allows for a wide reach quickly, and companies must continue investing in it to keep pace," said Adam Bianchi, chief operating officer of Cutting Edge Information. "At the same time, pharmaceutical brand managers see a wider selection of tool and tactics to drive brand growth and effectively communicate with physicians and patients."

Surveyed companies reported allocating 24% of their budgets to DTC advertising. In comparison, patient adherence and provider support have smaller budgets. But executives involved in marketing decision-making said that adherence and support programs yielded a higher return per dollar than DTC.

The different channels are all required for a successful brand. "Planning and achieving a balanced and targeted marketing mix for each brand is the key," Bianchi said.

The new study examines the brand impact and return on investment for nine marketing activities. Developed with input from 28 pharmaceutical and biotech companies, the study includes benchmarking data from established markets as well as emerging markets. Executives involved in the research highlighted several current goals:

  • Boost brand value and the company's bottom line with benchmarks for specific marketing activities, tools and channels.
  • Track hard-to-find ROI data for specific marketing activities.
  • Determine effectiveness of both traditional marketing activities and newer tools, including Internet-based media.
  • Discover where marketing and brand executives will put future investments.

For more information, visit or call 919-403-6583.

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    Eric Bolesh