{"id":5806,"date":"2016-01-27T18:51:00","date_gmt":"2016-01-27T18:51:00","guid":{"rendered":"http:\/\/www.pharma-mkting.com\/is-direct-to-consumer-tv-advertising\/"},"modified":"2019-02-21T01:15:16","modified_gmt":"2019-02-21T01:15:16","slug":"is-direct-to-consumer-tv-advertising","status":"publish","type":"post","link":"http:\/\/ec2-54-175-84-28.compute-1.amazonaws.com\/pharma-mkting.com\/blog\/is-direct-to-consumer-tv-advertising\/","title":{"rendered":"Is Direct-to-Consumer TV Advertising a Losing Proposition?"},"content":{"rendered":"
\n<\/a><\/div>\n

2014 was a banner year for TV direct-to-consumer (DTC) advertising in that it saw the highest percentage spent on TV since at least 2001 (see chart and read “Pharma Ups Its Investment in TV DTC Advertising<\/a>“).<\/p>\n

A few weeks ago I said “Forgettaboutit! The numbers are not yet in for 2015, but if it’s anything like 2014 — and judging by personal experience — the drug industry will be spending even MORE money on TV DTC ads.”<\/p>\n

UPDATE (3 Mar 2016): The numbers for 2015 are here (see charts and “Annual Spending on Direct-to-Consumer Drug Advertising Nearly at an All-Time High<\/a>“). My prediction was correct: Since 2011, the portion of DTC spending on TV has was 69% in 2015 versus 61% in 2014.<\/p>\n

The Top 10 TV DTC Rx advertisers spent $876.3 million in 2015 (see insert below). The question is: Is it worth it?<\/b><\/p>\n

My answer: No!<\/b> How do I know? Click on “Read More” after the insert below for my analysis of TV DTC ROI (return on investment).<\/p>\n

\nTV DTC Advertising Spending<\/a><\/div>\n

<\/p>\n

<\/a>Analysis of TV DTC ROI<\/b>
\nAccording to Beth Snyder Bulik writing for Fierce PharmaMarketing “However, it [the money Johnson & Johnson spent advertising Invokana on TV in 2015; $101.2 million] might have been money well spent. U.S. sales of Invokana spiked upward with J&J reporting $348 million in fourth-quarter revenue for the brand, up 80% when compared with the $193 million in U.S. sales for the same quarter of 2014” (“New brands, stepped-up spending drive big TV-ad outlay for diabetes in 2015<\/a>“). <\/p>\n

J&J spent $66 million more on Invoking DTC advertising in 2015 than it did in 2014 ($102.2 – $35.2). If we assume all that increased DTC ad spend accounted for the $155 million in increased Invokana sales in Q42015 v. Q42014, then the ROI would be ($155 million)\/($66 million) = 2.3 (J&J made $2.30 for every dollar spent on TV). Pretty good.<\/p>\n

BUT WAIT!<\/p>\n

We must assume that marketing to physicians (lots more $ is spent on this marketing) and other forms of DTC advertising (e.g., print) also played a role in increasing Invokana sales. I think it would generous to say that DTC TV ads were only responsible for 40% of the increase in sales; i.e., $62 million. That would mean the TV ad ROI is more like ($62 million)\/($66 million) = 0.9 (J&J made only $0.90 for every dollar spent on TV; negative ROI); i.e., a losing proposition!<\/p>\n

\n<\/a><\/div>\n

This is not to say that all DTC TV ads have a negative ROI. But, for some brands – and Invokana may be one of them – DTC TV advertising may not be the best way to spend your advertising dollars.<\/p>\n

P.S. Perhaps the Invokana ads themselves are to blame. The people in them look like zombies!<\/p>\n","protected":false},"excerpt":{"rendered":"

2014 was a banner year for TV direct-to-consumer (DTC) advertising in that it saw the highest percentage spent on TV since at least 2001 (see chart and read “Pharma Ups Its Investment in TV DTC Advertising“). A few weeks ago I said “Forgettaboutit! The numbers are not yet in for 2015, but if it’s anything […]<\/p>\n","protected":false},"author":2,"featured_media":12093,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[12],"tags":[115,289,306,307,164],"topic":[],"acf":[],"yoast_head":"\nIs Direct-to-Consumer TV Advertising a Losing Proposition? - Pharma Marketing Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/ec2-54-175-84-28.compute-1.amazonaws.com\/pharma-mkting.com\/blog\/is-direct-to-consumer-tv-advertising\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is Direct-to-Consumer TV Advertising a Losing Proposition? - Pharma Marketing Network\" \/>\n<meta property=\"og:description\" content=\"2014 was a banner year for TV direct-to-consumer (DTC) advertising in that it saw the highest percentage spent on TV since at least 2001 (see chart and read “Pharma Ups Its Investment in TV DTC Advertising“). 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