Pharma Ruling Could Hurt TV Ad Spending

Under the pharmaceutical industry’s new ad code, the removal of 15-second spots that help consumers recall a drug could shift some ad spending from television to radio, print and the Internet, agency sources said. But while there will likely be changes in the media mix, agency executives say that ad spending in the category will be maintained and might even go up.

Drug companies spent an estimated $131 million on 15-second spots on network TV last year, according to the Television Bureau of Advertising, a nonprofit trade group. Add cable, which accounts for 16 percent of overall drug spending, or $6.5 billion in ’04, and it is much higher.

Advertisers consider the 15-second “reminder” ads an important tool to build brand recognition for new drugs. They are also favored by advertisers because they are not required to list any side effects if they only mention a drug’s name and not what it does.

When AstraZeneca launched Nexium in 2001, it used a 15-second ad as part of the media mix to reinforce awareness. Nexium sales went from nearly $600 million in 2001 to $2 billion in 2002, according to the company’s annual report.

“It is going to be very difficult to do the kind of reminder ads we have seen in the past,” said Andrew Schirmer, managing director of McCann HumanCare, a division of McCann Erickson, New York, which handles drug accounts.

Schirmer predicts advertisers will likely shift some ad dollars away from TV because drug makers are required to list risks and benefits in 60-second spots, so there is a greater chance that brand messages will get lost.

“I may just heavy up my print run … because I have to make up for the loss of efficient brand building that I had with 15-second reminders,” Schirmer said.

The Food and Drug Administration has never liked reminder ads because they are not long enough to list risks and benefits. “When you are speaking to consumers, [15-second spots] don’t provide any opportunity to give information on disease awareness,” said FDA deputy commissioner Scott Gottlieb.

The ads were also a sticking point as the drug industry struggled to develop a code. “There has been a tug of war between the CEOs who are trying to protect their company’s image and the marketing gurus who are trying to protect the company’s bottom line,” said Ken Johnson, svp of Pharmaceutical Research and Manufacturers of America, the industry’s main trade group, which developed the new code.

Critics of the code say the group did nothing more than rubberstamp regulations that were already on the books. “To put out a guideline that reiterates existing law and regulations is a stunt,” said Dr. Sidney Wolfe, who heads the consumer group Public Citizen’s Health Research Group.

In the end, TV may not receive the lion’s share of drug ad dollars, said one exec at a media agency that represents a major drug company. “Having said that, there’s still a lot of money in TV, and I don’t think you’ll see a wholesale shift overnight.”

Mike Drexler, CEO of Publicis Groupe’s Optimedia, which handles media chores for Sanofi-Aventis, makers of Ambien and Allegra, said the guidelines would “probably have a relatively small effect on overall ad budgets. If anything, I think they will require some changes in crea-tive approaches.”