Run a Google search for “rheumatoid arthritis” and you get some two million organic results and dozens of sponsored links. Some of these advertise prescription drugs like Celebrex and Enbrel. Others promote alternative cures or treatment centers specializing in the joint condition. All have one thing in common: They’re trying to reach older people who the product’s marketers assume are savvy enough about the Web to direct their own research processes.
They’re not wrong. Twenty-six percent of U.S. adult Internet users say they search online for health information “frequently,” while another 40 percent say they do so “sometimes,” according to a July Harris Interactive poll.
Pharmaceutical ad budgets are keeping up. eMarketer research indicates pharma and health care industry online advertising will reach $975 million in 2007, an 18.9 percent growth rate, and that next year their investment will grow another 22.1 percent. Even those substantial estimates may lowball the actual marketing investment, as buyers and sellers of drug advertisements are also buying via specialized newsletters, microsites and other environments not always tracked by the research firms.
When you factor in those media placements, “online pharma spending in 2007 will be over $1 billion,” according to Charlie Silver, CEO and Chairman of RealAge.
RealAge, a health information property, was purchased this week by Hearst Magazines for an undisclosed sum. (Analysts pegged the deal at just under $100 million.) With the acquisition, Hearst is trying to catch a wave of change now underway in how drugs are marketed online. According to Silver and other ad buyers and sellers in the health vertical, pharmaceutical advertisers have come to see relationship-driven approaches as the future of their direct-to-consumer (DTC) advertising efforts. As a result, they said, drug marketing campaigns — online anyway — are coming to resemble a combination of traditional marketing campaigns and customer relationship management programs.
Niche Beats Reach
RealAge, which has been featured widely on news and talk programs, has built its name by offering a 150-item questionnaire that promises to tell visitors their actual age by analyzing a collection of factors ranging from one’s cholesterol level and flossing habits to average driving speed and pet ownership. Those with ailments or specific medical interests can then receive care recommendations or subscribe to content-specific newsletters that RealAge pairs with sponsor messages.
“We educate our users on how to take action to relieve a certain condition, and we position the pharma advertisers as a solution,” said Silver.
Acid reflux drug brands Nexidia and Protonix are among the sponsors of heartburn content on newsletters published by a firm called MedTrackAlert, a RealAge competitor that offers dedicated newsletters for sufferers of 26 diseases. The strategy, as with RealAge, is to provide marketers with venues to advertise specific-use drugs in hard-to-isolate segments of the online population.
It’s working, to a point.
“We’ve had very productive and strong relationships with [drug brands aimed at] some of these larger chronic diseases,” said Ted Smith, president and co-founder of MedTrackAlert. But he added when it comes to drugs for more common maladies, big online media plays, and especially search, are still top of mind for advertisers.
“This is really early still in direct-to-consumer online. The majority of DTC dollars are… being spent offline,” according to Smith. “By the time they get their dollars online there’s so much pressure online that it all gets sucked into search and other venues. Where you see better media buying is when you get into disorders that are less common.”
Despite their accelerated investment in online advertising, pharma companies’ spending on the channel only amounted to 3.4 percent of all their advertising in 2006, according to data TNS Media Intelligence provided to eMarketer. By 2011, it predicts that number will still only account for 5 percent.
Yet as that money flows online, Google and WebMD may be only limited beneficiaries.
Sources say advertisers are getting savvier about sifting audiences online and measuring engagement where they find them. For instance, Smith said in the 2008 RFPs MedTrackAlert has been getting, marketers are asking for more information on engagement metrics like average session times and pages per visit. “Those are metrics we didn’t see this time last year,” he said. “That’s encouraging.”
Drug companies are not only relying on independent health publishers like RealAge and MedTrackAlert to guide consumers through their research processes. Many are building their own programs online, creating Web sites and loyalty programs and even seeding the Web with video.
It’s all part of what Silver calls “a cascade of relationship building” that’s driving the bulk of experimentation now underway in pharma marketing.
An upcoming MedTrackAlert study highlights what many marketers have already guessed: Consumers are more likely to act on messages about the mechanism or symptoms of a disease than on those about price or effectiveness. As a result, marketers are steadily moving to provide counsel rather than sell product.
“The industry is going though a growth phase of trying to understand how a social platform like the Internet works differently than TV or print,” said Smith. “If you look at users and what they value, they tend to value a slightly more educational message.”
According to Mike Rutstein, EVP and director of consumer healthcare for ad agency DraftFCB, drug-focused Web properties run by pharma marketers have “gone from being a brand-centered site to being much more of a portal for disease management.”
“The marketers are getting better than bringing their drugs to life online,” he said. “Once you have a deeper appreciation of what’s wrong with you, you can see what’s right about the product.”
Guiding people through their disease research processes is something marketers have realized the Web can do much better than a TV spot. Rutstein said drug brands are pouring money into creating involved online experiences with substantial production values. One example out of DraftFCB’s Chicago offices is MyAlli.com, a destination site for GlaxoSmithKline’s prescription weight loss pill Alli. Visitors to the site can enroll in something called Myalliplan, a “tailored online action plan” that includes a personal page, weight loss tools and calculators, an online journal and recipe resources.
Said Rutstein, “Because [the Web] has become such a destination, companies are shifting some of their media dollars away from general TV, and you see a lot of these microsites online that are taking the place of TV… Companies are doing a better job of making the complex simple and more approaching.”
Regulation Stifles Social Media Strategy
Speaking of approachability, one area that has the pharma and healthcare industries’ collective gauze in a bunch right now is the hot-everywhere meme of social media and community online. If creating stickier sites is a trend, then hosting communities where symptom carriers can interact with one another is a holy grail.
Yet while some drug marketers have hosted forums or other community services, you’re not likely to stumble onto an official Facebook group for Levitra anytime soon. That’s because the industry is so heavily regulated, both in terms of how it can promote its pills and how it must report consumer feedback.
“Community is a hot topic right now for every major drug company,” said DraftFCB’s Rutstein. “People who are sufferers of conditions want to hear from and talk to others. The challenge is how to do this in such a way that can acknowledge some of the legal and regulatory concerns.”
For instance, he said if a consumer visits a drug maker’s community-driven Web site and describes an awful side effect, the pharmaceutical company behind the drug in question must report that to the FDA.
There are exceptions to the sector’s community-shy tendencies. Myalliplan.com has a discussion forum, for instance. But by and large, said RealAge’s Silver, “They’re a little slower than less-regulated industries.”