Companies like Google, Yahoo, Nielsen, and HealthCentral hope guiding the FDA's forthcoming online ad and social media regulations helps move pharma ad money online.
It's no surprise that pharma brands have been reluctant to enter the social media sphere. Indeed, it's been repeated over and over at this week's Food and Drug Administration hearing on pharma marketing online. It also comes as no surprise that several online media and services firms hoping to score pharma marketing dollars -- from Google to Nielsen -- have been there to help guide the FDA's future online regulations.
Pharma marketers are intimidated by social media for several reasons: lack of control over brand messages, fear of violating the FDA's cloudy regulations, and the threat of class-action lawsuits brought as a result of consumers using social tools to report adverse drug effects.
These marketers are struggling to determine how to monitor social media -- in part to report adverse effects of their drugs and products as required by the FDA. However, their hesitance to acknowledge social conversations by monitoring them, creating Twitter accounts, or responding to consumer comments in forums, also is hampering their desire to buy online advertising and other online marketing services.
That's led an array of online media firms, ad agencies, and marketing services firms to Washington, DC, in the past two days to participate in a discussion hosted by the FDA intended to assist the agency in crafting clear rules for this highly-regulated advertiser sector.
"Most pharma and medical device companies are unwilling to advertise" in social media sites alongside user generated content, said Christopher Schroeder, CEO of health site HealthCentral.
According to the Interactive Advertising Bureau and PricewaterhouseCoopers, pharma and healthcare advertisers spent the smallest amount on Web ads in 2007 and 2008 compared to other advertiser verticals, accounting for 4 percent of online ad revenues in both years. In contrast, pharmaceutical marketers represented the second largest ad vertical across all media based on ad expenditures in 2007 and 2008, according to Nielsen. Automotive is the largest.
In addition to simply running ads adjacent to online conversations, pharma marketers also worry about the time and effort it takes to monitor user generated media to watch for mentions of their brand names and reports of negative side effects of their drugs. They also question how often they'll need to revisit Web sites where they've spotted relevant postings.
In 2008, Nielsen's BuzzMetrics measured 500 randomly selected healthcare messages online. According to hearing speaker Melissa Davies, research director, healthcare, at Nielsen's Online division, only four messages -- less than 1 percent -- mentioned an adverse event. Clearly it's in Nielsen's best interest to promote its BuzzMetrics social media monitoring service, along with its finding that pharma brands don't have a lot to worry about if they do start monitoring social media.
Google and Yahoo stopped by the hearing yesterday. Both firms suggested that search ads for pharmaceutical products have become less transparent since the FDA sent warning letters to 14 pharma companies in April accusing them of failure to include drug risk information in online ads. Many advertisers, as a result, have been running sponsored search listings with generic messages that do not mention drug brands by name. Google reported lower click-through rates on pharma ads since the FDA letters were sent.
It's clear media and marketing services firms are pushing for the FDA to establish clear guidance on how pharma brands should handle online advertising and social media because they expect to benefit from more pharma dollars moving online. Now, as expressed by many hearing speakers, it's up to the FDA to move quickly to develop regulations that are relevant to the evolving technologies and cultures of the Internet.
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.
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