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TV ad spend squeeze

For years, pharmaceutical companies in the US have been spending a small fortune on TV ads; the trump card in direct-to-consumer advertising

For years, pharmaceutical companies in the US have been spending a small fortune on TV ads; the trump card in direct-to-consumer (DTC) advertising. However, things are set to change and a number of pharma firms, including Pfizer, AstraZeneca and TAP Pharmaceuticals are taking a long hard look at the budget blown on TV advertising at a time when return on investment (RoI) for marketing activities is under increasing scrutiny.

Pfizer is reportedly re-evaluating its TV advertising strategy for Viagra after prescriptions for the drug dropped only slightly when the campaign had to be withdrawn under a Food and Drug Administration (FDA) ruling last year.

AstraZeneca (AZ), one of the most prominent TV advertisers in the US - particularly for Nexium and Crestor - says it is still committed to the medium but is re-assessing its level of spending.

David Brennan, executive director of AZ North America, said that the company changed its advertising strategy to include more online activity and had concerns over the depth of message it is possible to get across on TV in just 30 seconds.

TAP Pharmaceuticals has also pulled its TV ad schedule for heartburn treatment, Prevacid, which cost around $90m, to focus on print media. According to a statement from the company, the decision is part of its plan to increase efficiency of marketing activities.

Taking a hard line

With an increasing emphasis on RoI, marketers are taking a much harder line when it comes to advertising spend in general.

This is a likely catalyst in some pharma firms' decision to reduce, or withdraw, TV advertising spend. However, another more potent accelerant is likely to be the criticism levelled at the industry by regulators and the public, in particular following safety concerns over Vioxx and Celebrex, which had been widely advertised on American television.

At the FDA's request, Pfizer pulled all consumer ads for Celebrex late last year, after officials said that it would be inappropriate to advertise medicines that were `shrouded in controversy' to the general public.

Separately, the FDA took issue with Pfizer over its TV campaign for Viagra, saying it was misleading in that it suggested that the drug was more effective than clinical trials had proven. It also failed to address side effect issues, the FDA added.

However, figures from Atlanta-based NDCHealth reveal that new prescriptions fell just 3.8 per cent after the campaign came off air.

Experts believe that TV ad spend is likely to fall in the short- to medium-term as marketers use other media, including print and the internet, to deliver product messages.

Pharma companies are concentrating more than ever on relationship marketing and believe that they can achieve deeper dialogue through print and electronic media.

2nd September 2008

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