Thursday, June 30, 2005

Pharma eMarketing at Tipping Point?

Last week's ePharma Summit was held at the new Borgata Hotel and Casino in Atlantic City, NJ. This venue, it turns out, was appropriate as many presenters and diehard attendees -- of which there were disappointingly too few -- seemed to be gamblers of one sort or another. Some gambled at the tables in the casino and some are gambling that pharma e-marketing will take off in 2005.

David L. Stern, Vice President of Marketing for Metabolic and Endocrinology at Serono, Inc., speaking at the conference declared that "pharmaceutical e-marketing is at the tipping point." He noted that one of the challenges for pharma is the segregation of e-marketing from other forms of marketing. "Marketing is marketing," he said.


e-Marketing indeed is a challenge for the pharmaceutical industry and I have long claimed that the percent of the pharmaceutical marketing budget spent in the "e" space has remained below 5% since 1998 when I first got involved with pharma e-marketing in the heyday of the dotcom boom (
see "What Stands in the Way of the Mainstream Use of the Internet by Pharmaceutical Companies?").

Stern and other presenters called for breaking down the "marketing silo" mentality of pharma companies and the integration of e-marketing with other forms of marketing.


The problem is that after years and years of consultants and e-marketers inside and outside pharma telling brand managers that the Internet is different, special and the greatest thing since sliced bread and, by the way, better than TV or print, they are now saying essentially "why can't we all just get along?"


I agree that the Internet is different. It is more interactive, more measurable, and more targeted than print or TV. e-Marketing uses special marketing techniques and requires a special knowledge that many "traditional" marketers may not have.


But, it is not better -- at least not better for achieving every marketing goal. TV, for example, is much better at reaching large numbers of consumers. Pharma product managers may have the mistaken notion that the Internet is an awareness medium like TV and print and they may hold it up to the same ROI standards used to measure traditional awareness media. Early proponents of the Internet may be partly responsible for perpetuating this view. However, the Internet is a poor awareness tool - it's nearly impossible to reach a big enough audience of a particular segment online without a massive ad campaign across multiple sites. For awareness, TV beats the Net hands down.
Online media haven't offered the reach numbers to justify the bigger budgets - for media planners, it's near impossible to find x million consumers of a particular segment anywhere online (without a massive effort to connect dozens of small sites), and that's what brand managers need to move their share graphs. -- Jack Barrette (see PHARMA-MKTING discussion thread "What's the % of DTC budget spent online?").
So, is e-Marketing at the tipping point and ready to take off in 2005?

Several experts at the ePharma Summit pointed to the new DTC ad policy of BMS (see "
New DTC Principles Emerging") as validation of this view. They point out that while BMS will refrain from running DTC ads on TV during the first year after a drug launch, it's policy makes a point of not including interactive media in the ban and suggests using the Internet for more disease awareness and product advertising. See Bristol-Myers Squibb Direct-to-Consumer Communications Code.

This non-mention of the Internet is faint praise indeed.


I think some pharma e-marketers are grasping at straws and it will be an uphill battle to move the share of pharma marketing budgets out of the single digit range. This view was strengthened as I looked at the ePharma Summit audience. I counted only about 70 people at the meeting, which in the past would have up to 400 attendees!


Also, many people who had executive positions as e-marketers in pharma companies have been laid off during the past several years. These people were the first to go when their companies merged. Either no new people took their places or the ones that did don't even know what search engine optimization is.


Despite some surveys that indicate that 2005 will be a good year for DTC e-marketing (see, for example, "
DTC in 2005: Can You Teach Old Dogs New Tricks?"), I believe e-marketing will always be an extremely small (less than 5%) part of the pharma marketing budget. If you are interested in why I believe this, see "What Stands in the Way of the Mainstream Use of the Internet by Pharmaceutical Companies?" What I said then is even more true today when all forms of DTC advertising and communications are being carefully scrutinized by the FDA and other watchdogs.

IMHO

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