Why Pharma Brands Struggle With Digital Ads

Pharmaceutical companies dominate the airwaves in the U.S., but face a much tougher challenge on the Web.

Turn on a TV during daytime hours, and the odds are strong you’ll see the work of a pharmaceutical advertising agency. Ads for prescription drugs are everywhere during peak viewing hours for older viewers, and only slightly less omnipresent during evening hours.

The numbers bear this out: Pharmaceutical companies are spending about $6 billion on TV ads annually. With an aging population and medical advances keeping us healthier longer, this is a state of affairs that’s likely to continue.

Yet while pharmaceutical ads are everywhere on linear TV, they are much less well-represented in the digital sphere — and there are a few reasons why progress on this front has been halting.

Paging Dr. Google

The Internet has become the public’s number one source for health information. When consumers have a troubling symptom, Google and WebMD are often the first stops. Physicians aren’t immune to the powers of the Internet either, and often use online searches to supplement print sources when developing clinical opinions and treatment plans.

Yet despite this rather transformational change, pharmaceutical advertising is still limited in the digital realm. TV and magazines still receive the vast majority of pharmaceutical ad and marketing spend.

There are two reasons why digital advertising in the pharmaceutical industry remains a relative rarity: Government inaction and federal regulations.

The Food and Drug Administration (FDA) has taken an exceptionally methodical approach to providing guidance on what is allowable and what is illegal in terms of digital pharma ads and online pharma marketing. Without clear guidelines, companies have been historically risk-averse in terms of formulating digital strategies. While the FDA is slow and deliberate when crafting policy, it sends out warning letters with much higher velocity.

Compounding this difficulty is the current rate of technological change. By the time the FDA offers pharmaceutical marketing guidance on a digital platform, two new platforms have been developed and released.

Bypassing Programmatic Roadblocks 

There’s another rather large fly in the ointment for digital advertisers: The Health Insurance Portability and Accountability Act, or HIPAA. This federal law grants US citizens privacy rights that protect the use of medical data.

For programmatic advertisers, this is a substantial challenge. By harvesting location data, search data and other personal information, advertisers can serve highly targeted ads to consumers when their intent to purchase is at its apex. This, obviously, is a very powerful tool.

It’s also a tool that’s constrained by regulations in some instances, however. If a pharmaceutical advertising agency wants to initiate an automated ad campaign, they must proceed with caution. 

HIPAA outlaws the use of first-party data to link a consumer with a medical condition. This means that a pharmaceutical advertising agency cannot use such data to identify a consumer as a high cholesterol sufferer, then serve her an ad for Lipitor.

While this is a significant limitation, it isn’t a complete deal-breaker. Advertisers often use indirect targeting based on related conditions. They also white-list the sites their ads appear on and use audience proxies (such as medical websites) when creating automated campaigns. Agencies can target content (serving Viagra ads in an article about erectile dysfunction, for example) but can’t target specific consumers. These strategies help them stay on the right side of compliance.

Is indirect targeting based on third-party data or related conditions as effective as standard programmatic approaches? That’s unlikely. Yet it can be quite effective, especially when compared to linear TV ads, which offer only the most crude form of demographic targeting.

And, as digital advertising tools continue to evolve, indirect targeting may improve to a point where it is nearly as effective as using first-party data. 

One thing is certain: Digital spaces remain under-utilized within the context of pharmaceutical marketing. As today’s Gen X and millennial consumers age, pharma brands won’t be able to rely on linear TV and print magazines to reach their audiences — and brands at the vanguard of this transition will be in the strongest competitive position.

The Takeaway

If you’d like to see what a tech-focused pharmaceutical advertising agency can do for your products, contact BIGEYE today. We’ll help you harness the full power of advertising and marketing across every medium.

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Rise of the Chatbots: Bringing AI Into Pharma Marketing

Looking for a low risk, low overhead, but high impact way to introduce AI into your pharma marketing? Then consider the chatbot.

Customer service is one of the most obvious applications for automation — and companies have been ruthlessly efficient in its deployment. Newer tech-based firms, in particular, have opted for near-total customer service automation, at least for routine queries. Most consumers are no doubt familiar with the lengths one must go to in order to get an actual carbon-based life form on the other end of a phone or computer interaction.

While dealing with endless irrelevant computer-generated questions is tiresome now, consumers are about to get some relief. AI and natural language processing (NLP) are growing exponentially smarter. Soon, consumers will have difficulty discerning silicon-based vs. carbon-based customer assistance. As chatbots and other automated programs grow more capable, brands will also be able to extend their functionality into the realm of pharmaceutical marketing.

How Chatbots Can Help Brands Incorporate AI Into Pharma Marketing

AI is playing a critical role in pharmaceutical industry product development. Major companies such as Pfizer and Google are using AI to help with early disease diagnosis. Artificial intelligence is also used to accelerate timelines for new drug discoveries. AI is also positioned to play a critical role in the emergence of personalized medicine, where tailored therapies are created based on a patient’s genetic profile.

Heady stuff, to be certain — yet also fairly far outside of the bailiwick of your conventional pharmaceutical advertising agency or pharma marketing department.

There is, however, one AI implementation that is both effective and viable for marketing purposes: The chatbot.

Today’s chatbots have come a long way from the rather static and limited versions consumers first encountered. Part of this is due to a gradual shift away from rules-based AI (where a chatbot responds according to pre-determined rule sets) to a fully realized NLP implementation. In the latter, a chatbot can continually learn and expand its repertoire, growing more accurate and responsive over time. 

In fact, today’s NLP-based chat applications have grown astonishingly life-like, even incorporating human-sounding conversational pauses and stammers. Some chatbots even make intentional errors to increase their verisimilitude.

Serving an Automated Marketing Role

In the context of customer service and marketing, it’s not difficult to see the benefits of having an intelligent helper who sounds like a human and who is ready to assist with patient queries 24/7. This is especially helpful in an industry where consumers frequently have simple questions about dosages, interactions, and other issues. If your chatbot is capable of seamlessly handling these lines of interaction, it frees up personnel to work on higher-value tasks — one of the core advantages of automation.

That’s merely one application of chatbot AI, however. While a well-designed bot can provide consumers with information and facilitate positive experiences, it also plays another critical role: It accumulates a vast trove of data culled from thousands upon thousands of consumer interactions.

Obviously, privacy regulations govern how first-party data can be used. Yet this information is still quite valuable in terms of identifying how processes can be improved and how consumers respond to particular messages.

Teva and other leading global pharmaceutical brands have created chatbots for their internal properties and are using them for pharma marketing purposes. Teva’s Maxbot implementation, in fact, recently won several awards from the Pharmaceutical Marketing Society.

Smaller brands should also follow suit. Though these brands may not have the internal resources to develop a chatbot, the right pharmaceutical advertising agency may be able to develop a chatbot solution that fits the bill.

The Takeaway

At BIGEYE, we believe that technology plays a leading role in the success of a modern pharma marketing campaign. If you’re looking for more from your pharmaceutical advertising agency, we urge you to contact BIGEYE today.  

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Learning from Five Key Pharma Industry Trends

The global pharmaceutical industry is experiencing profound changes — and understanding the impact of these changes is critical for those involved in pharmaceutical marketing.

According to a new industry report, the era of pharmaceutical firms succeeding with low innovation products and indiscriminate TV pill pushing is coming to a quick end. The successful pharmaceutical firm of the future will feature smaller and more agile sales staffs, products that truly add value for patients, and marketing efforts that are laser targeted.

Let’s take a closer look at some key trends shaping this future, and how brands can partner with the right pharmaceutical advertising agency to develop campaigns that fit this evolution.

Projecting Pharmaceutical Industry Trends

A recent report compiled by PricewaterhouseCooper (PwC) outlined the tectonic shifts altering the pharmaceutical industry. Some of these dynamics are associated with broader societal change; others are tied to new technology or evolving consumer preferences.

Highlighted developments in the PwC report include the following:

  • Chronic disease rates are growing at a rapid pace, creating a larger — and sicker — population of patients/consumers.
  • Healthcare payers are giving physicians less latitude in terms of prescription decisions.
  • The “pay-for-performance” model is also becoming more established in the industry, as payers seek to tie reimbursements to actual health outcomes.
  • Healthcare boundaries are now overlapping and an interdisciplinary approach to patient care is gaining favor.
  • Demand for pharmaceutical products in the developing world is robust, as globalization raises wages and technology increases access to healthcare. Demand for medicines, however, varies widely in global markets.
  • Governments across the globe are placing a greater emphasis on prevention rather than treatment, hoping to control costs and improve patient outcomes.
  • Regulators are assuming a more risk-averse posture.

All of these developments are collectively transforming how patients are treated, and changing the underlying business dynamics across multiple related industries. Most importantly, if you’re a leader within a pharma brand — or a pharmaceutical advertising agency — these trends provide a lodestar of sorts to help inform your industry marketing and advertising campaign strategies.

Marketing and Advertising Through the Lens of Trend Analysis

As industries evolve, advertising and marketing must evolve in parallel. In the case of the pharmaceutical industry, it’s important that advertisers stay away from a product-focused approach rooted in yesterday’s industry model.

Instead of being overly focused on follower products, brands should invest in developing innovative new products that fill an unmet or underserved market niche. PwC describes innovation in the context of drug development as products which:

cure a disease or condition; prevent a disease or condition; reduce mortality or morbidity; reduce the cost of care; improve the quality of life; are safer or easier to use; or improve patient compliance and persistence.”

PwC claims that a mere eight new medications meeting those criteria were launched in 2018. In the absence of innovation, patient outcomes suffer. Yet this also creates an exceptional competitive opportunity for brands capable of innovating.

Other core imperatives for today’s pharma marketing and ad departments, according to PwC, include:

  • Recognizing how payer, provider, and pharmaceutical value chains work together.
  • Developing the capability to effectively market specialist therapies, which will become more important in the coming years. 
  • Introducing products with multi-nation launches and live licensing.

Deeper, cultural changes are also critical. Brands need to foster a modern marketing and advertising culture capable of supporting a knowledge-based commercial organization. 

Such initiatives are certainly ambitious, especially in an industry where firms have been able to make margin by developing low innovation follower products and pairing them with tired, yet tried-and-true, marketing techniques. Yet ambition and innovation are exactly what’s called for, given the massive structural changes that will alter the shape of the pharmaceutical industry in the coming years.

The Takeaway

If your pharmaceutical advertising agency isn’t pressing you to think three moves ahead, it’s time for a re-evaluation. The pharmaceutical industry will experience a sea of change in the coming years, and brands that begin adapting early will be in the best competitive position.

At BIGEYE, we have the right combination to help pharma brands win: Domain expertise, a sophisticated suite of technological tools, and a full range of pharmaceutical marketing services.

Contact us today to learn more about BIGEYE, and what a forward-thinking pharmaceutical advertising agency can do for your brand.

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Why Direct to Consumer Pharma Ads Remain a Global Anomaly

Direct to consumer prescription drug ads are everywhere in the US — and almost unseen everywhere else. Here’s why.

In the U.S., consumers are bombarded with ads for pharmaceuticals — so much so, in fact, that the very form has become a cliché (think about “active seniors” pursuing their favorite activities while a narrator rattles off a list of side effects). If you work for a pharmaceutical advertising agency that isn’t based stateside, it’s an entirely different world, however. 

The U.S. is the only large market where direct to consumer pharmaceutical advertising is permissible. Only one other country (the ‘tiny by comparison’ New Zealand) allows the practice — and that nation has seen repeated efforts to ban consumer prescription drug ads.

Let’s take a closer look at why direct to consumer drug marketing works, and any changes that could lie ahead.

The Power of Direct Advertising

While direct advertisements for pharmaceuticals are now inescapable, the truth is that they’ve only been around for 22 years. The practice of marketing medications to consumers was made legal under the Clinton Administration in 1997, immediately unleashing a torrent of new advertising on the public in a previously unseen category.

The rationale behind this move was simple: When people suffering from a certain affliction would see an ad for a product that treats their symptoms, they would ask their physician about the product, opening up an important dialogue about their health in the process.

However, the reality hasn’t always proved so simple. When direct advertising certainly works in terms of generating brand awareness and sales, some physicians have raised objections about the role it plays in patient health.

In a Food and Drug Administration survey, 65% of physicians reported feeling that direct advertising sent confusing messages to patients; a smaller number of physicians reported feeling pressure to prescribe as a result of direct ads.

This has occurred against a backdrop of massive expansion in direct pharma advertising dollars. According to a Journal of the American Medical Association study, total direct pharma ad spending grew more than 360% from 1997 to 2016.

The reason for that ad spend is simple: It results in sales, and lots of them. Another federal study showed that for every $1,000 pharma companies spend on direct advertising, they add 24 new patients. Pharmaceuticals supported by direct consumer ads add patients at a rate seven times higher than drugs without ads.

Alternative Approaches to Direct Ads

One alternative to direct pharma advertising that has gained traction in recent years is the Disease Awareness Campaign (DAC). This model eschews product-specific direct ads in favor of a less commercial advertising approach that aims to heighten awareness.

Gilead, one of the world’s leading drug developers, has used the DAC approach in support of its new hepatitis C treatment. The ads encourage people to seek testing for the disease without getting into the merits of Gilead’s product. 

Ultimately, it is unlikely that we see a move to significantly restrict direct pharmaceutical advertising in the US. In fact, it seems likely that other nations may follow the lead of the U.S. and New Zealand and loosen regulations. The European Commission, in fact, has undertaken hearings to explore that possibility, though any approved ads would likely be much less promotional in nature than what is seen in the U.S.

If you’re running a pharma brand or a pharmaceutical advertising agency, perhaps the best approach is one of moderation. Take advantage of the reach and efficacy of direct advertising, but make sure it’s done in a way that stresses awareness and maintains a sense of professional ethics. 

Ultimately, drug companies, physicians, and patients all need to pull in the same direction to create better health outcomes.

The Takeaway

At BIGEYE, we believe that a great pharmaceutical advertising agency offers its clients three things: Domain expertise, advanced technological tools, and a sophisticated understanding of the existing marketing landscape.

Don’t hesitate to contact us today to learn more about what BIGEYE can do for you.

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