Wednesday, June 24, 2009

Marketing Mix of Leading Pharma Advertisers in 2008

Fourteen (14) pharmaceutical companies made it into AdAge's 2009 list of Top 100 National Advertisers (based on 2008 ad spending data). They are, in descending order of total ad spending:
  1. Johnson & Johnson
  2. GlaxoSmithKline
  3. Pfizer
  4. Bristol-Myers Squibb Co.
  5. Eli Lilly & Co.
  6. Bayer
  7. Schering-Plough Corp.
  8. Merck & Co.
  9. Wyeth
  10. AstraZeneca
  11. Novartis
  12. Boehringer Ingelheim
  13. Abbott Laboratories
  14. Sanofi-Aventis
The list is based on "measured media" spending across 19 media and includes estimates of "unmeasured media," which includes direct marketing, product placement, and most notably, paid Internet search, which some analysts estimate is about 40% of the total Internet ad spend of companies in general.

NOTE: P&G, which is primarily a packaged goods company and one of the biggest ad spenders in the US, is not included on this list even though it may market a few pharma products. It was also not included in last year's analysis (see "Marketing Mix of Leading Pharma Advertisers").

The total spend for these 14 pharma companies in 2008 was $6,993,000,000 measured vs. an estimated $5,697,500,000 unmeasured. That represents 12.4% of the total spending in 2008 of the entire group of AdAge's TOP 100 National Advertisers. NOTE: Not all of this represents direct-to-consumer (DTC) advertising. Magazines, for example, include B-2-B publications (ie, medical journals focused on physicians).

I plotted the media mix for pharma advertisers vs. non-pharma companies in the list and came up with this (click on the image for a larger view):

Compare this to last year's data (see "Marketing Mix of Leading Pharma Advertisers") and weep:

Internet display ad spending still represents a very small portion of pharma's measured media spending (2.4% in 2008 vs. 3.1% in 2007). Non-pharma companies allocate twice as much of their budgets to the Internet than do pharma companies.

Two pharma companies -- Abbott and AstraZeneca -- stand out from the pack in terms of the percent of their budgets allocated to Internet advertising in 2008 (see figure below; click for an enlarged view).


  1. Intesting analysis - I like the visuals. It may also be interesting to consider how much of this spend was for OTC compared to Pharma products.

    To be clear, both require a significant investment in marketing spend. However, each require a very different strategy and set of tactics and potentially different allocation of marketing resources.

    So I took the top 5 in the list of 14 you have above and calculated a poor-data-person's ratio OTC sales to Pharma sales, based on the companies 2008 annual reports. I applied that ratio to the total ad spend. Based on that, J n J still is the biggest spender in Pharma, but by something like a billion dollars less than what is listed above. Also based on that crude analysis, GSK may actually be spending more on Pharma ads on TV (all TV outlets combined) than J n J.

    Of course, someone out there must have a better dataset than my back of the envelop calculation. But I thought I'd add my thoughts on this.

  2. Shwe,

    Thanks for your analysis.

    I understand that Bob Ehrlich -- publisher of DTC Perspectives -- has a new publication for OTC. Perhaps he will publish some interesting data we can use for comparison.


  3. I think the data bodes well for DTC and physician-targeted DOOH-health TV networks. Eventhough the outdoor sector barely hits the radar. I think pharma has an unrecognized opportunity to retask readily available Broadcast-TV DTC creative to extend their messages and product promotions to place-based medical TV networks. I mean, what more targeted media channel can you spend DTC budgets on than a narrowcast TV network that directly promotes your product, and has the ability to educate patients at a time when key health questions and decisions are being considered. I also think the place-based medical TV networks is a tremendous opportunity for the top 14 companies to promote the public health relevancy or ajacency of their products (e.g. a :30 second spot on speaking with your HCP about diabetes, hypertension, HIV, cancer, arthritis), improving health literacy-dialogue with your HCP. Its basically a 2-fur-1.


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