Pharmaceuticals: Why ad spending’s ailing
March 28, 2013
A number of ad categories have increased spending over the past few years following deep declines during the height of the recession.
Pharmaceuticals is not one of them.
Even as positive economic news builds, including a decrease in the unemployment rate, an increase in home building starts and a surge in the stock market, drug companies have reigned in their ad budgets.
Unlike many other categories, such as automotive and retail, pharmaceutical spending is tied not so much to the economy as to the state of the industry itself, and right now the mood is one of extreme caution.
Last year GlaxoKlineSmith reached a $3 billion settlement with the Justice Department over the marketing and development of its drugs. The government accused the British company of, among other things, advertising its drugs to treat ailments they were not approved for.
“Overall the business in the past several years has taken a more cautious approach to marketing in response to fears about regulation,” notes Jon Swallen, chief research officer at Kantar Media North America.
No one wants to be the next GlaxoKlineSmith, and in response many companies have pulled back on their advertising.
Last year spending in the category declined 3.8 percent, according to data crunched by Kantar and Nomura, from $7.6 billion to $7.31 billion.
It was the third-biggest decline for any top-20 ad category, behind only office supplies (down 10.3 percent) and media and entertainment (down 4.2 percent).
No individual pharmaceutical advertiser finished among the top 10 for 2012, according to Kantar. Pfizer was among the top seven until 2011.
Pharmaceutical advertising has dropped sharply in magazines as well as spot television, where spending plunged 30 percent last year, according to the TVB.
The other issue holding back spending is that there hasn’t been a major new drug introduction in some years. With no major new drugs to promote, pharmaceutical companies have little reason to increase spending.
In the past, rollouts of drugs such as Viagra, Lipitor and Zoloft have triggered a huge amount of ad spending to familiarize the public with the purpose and benefits of the new medications.
“Part of the reason is there have not been any big blockbuster marketing launches for newly approved drugs,” Swallen says.
“That was traditionally the catalyst during the last half of the past decade, 2005 to 2010. The category was propelled by marketing introductions.”
And with no major introductions on the horizon, the pharmaceutical ad chill could last for years to come.
It’s no longer Clear Channel. Now it’s iHeartRadio.
A rather limp second quarter for ad spending
For CBS, football and a better year
How the Rice case is impacting the NFL
Miami: Television spending is sputtering
‘Utopia,’ old order tricked out as new
Tell us, which new fall TV shows will survive?
For ‘New Girl,’ life after Jess and Nick
Millennials aren’t cutting the cord just yet
Microsoft scoops up Minecraft maker
Huh: Paid content draws more eyes on social media
Everyone can watch the Dodgers in LA after all
NBC’s ‘Sunday Night Football’ dominates
- Margie Chidley, Ricard Valero and Matthew Wakeman rise at Eleven
- David Morgan becomes ECD at Havas Worldwide Japan
- Jeff Walter rises to SVP at Rhea + Kaiser
- Four join experience design agency Sub Rosa
- Boston Globe editorial page editor Peter Canellos exits
- Stacey Libbrecht and Michael Messina rise at Starz
- Tracy Lenhart becomes VP of consumer marketing at Lifetime
- JudyAnn Hasel and Xochilt Llamas join James G. Elliott Co.
- Grant Giessinger becomes general sales manager at Clear Channel
- Mykelti Williamson joins the cast of ABC's 'Nashville'
This week’s top movies, songs and books
This week’s daypart ratings
This week’s cable ratings
This week’s broadcast ratings
This month’s new media traffic data
This week’s younger viewer ratings
Immediate opening for a media buyer/planner
Opening for a chief experiential officer
Needed: Sales coordinator for NY TV rep firm
Media buyer opening in Cleveland/Akron
TV media buyer wanted in West Covina, California