DTC Mar ke
ting
at the Cros
sroa ds
Richard Meyer
Internet Marketing
Consulting in Health
October 2009

Healthcare is under scrutiny
• America is 37th in the world in terms of healthcare performance
• We rank 18th out of 18 in industrialized countries
• 62% of all bankruptcies were directly caused by medical bills
• 18% of our GDP was spent on healthcare in 2008
• 75% of healthcare dollars are spent on mostly preventable chronic
diseases.

Including intense media scrutiny

But the outlook for the drug industry
remains positive
• The global market for pharmaceuticals is expected to grow 4 to 6%
in 2010 – exceeding $825 billion
– The forecast also predicts 4-7% growth over the next five years
• The total pharmaceutical market is expected to reach $975 billion or
more by 2013
• The $137 billion lost to patent expiries (Lipitor, Plavix and Seretide, for
example) over the next five years will still be a challenge.
The outlook reflects “a greater resilience
to economic slowdown [in the US],” as
well as growth in emerging markets, like
China.

Even with a projected rise in sales, the
drug industry is under a lot of pressure
Generic
Prescrip(on
drug
Pa(ent
compe((on
prices
co-­‐payments
Physician
Increased
costs
budgets
of
prescrip(on
drug
development
Tougher
FDA
Healthcare
legisla(on
Empowered
Power
of
pa(ents
Insurers
Hos(le
news
Ineffec(veness
of
media
tradi(onal
marke(ng

Many challenges remain,
especially for DTC marketers

The recession has led to a loss
in trust in business
Consumers don’t trust business

Insurers and pharma take most of
the blame for healthcare woes

Yet prescription drugs represent only
10% of each healthcare dollar spent
Costs
of
each
healthcare
dollar
Research;
2%
Equipment;
4%
Other;
12%
Dental
Care;
4%
Hospital
Care;
Admin
Costs;
31%
7%
Physician
&
clinical
services;
21%
Nursing
Home
Care;
9%
Prescrip(on
Drugs;
10%

With all of these environmental
factors, did I mention that…
R.I.P.
Tradi4onal
Marke4ng

Old media is in a steep decline
According
to
Forrester
Research,
48%
of
consumers
now
believe
that
they
have
the
right
to
decide
whether
or
not
to
receive
adver(sing
The
drop
in
tradi(onal
media
is
driven
by
con(nued
migra(on
of
consumers
to
digital
alterna(ves
for
news,
on-­‐demand
entertainment,
and
informa(on,
which
requires
less
(me
than
tradi(onal
media
counterparts

People are flocking to social media
With over half of the U.S. adult population consuming
online video, it has evolved from an emerging format
to a form of mainstream media.
Manhattan Research 2009

Traditional Segmentation
doesn’t work anymore
DTC Marketing at the Crossroads Demographics are dead, long live Tribes
A small--but growing and passionate--
group of people are changing the face The message to marketers is clear: No
of society. They may never grow larger single demographic, or even handful
than 3 million people, or roughly 1% of of demographics, neatly defines the
the U.S. population, but those people nation or a market.
have unmet needs that they are
passionate about. And 3 million
passionate people are by far enough to
make or break a business.
"The average American has been There is no such thing as the
replaced by a complex, “average American consumer”
multidimensional society that defies
simplistic labeling."

Because people are clustering
into Tribes (or microtrends)
People
are
now
connected
via
the
Internet
by
choices
such
as;
-­‐similar
aUtudes
-­‐beliefs
-­‐lifestyles
-­‐aspira(ons

With the growth of connections via the
Internet comes a more empowered
patient

As empowered patients gain more
power DTC marketing is being cut
Reasons DTC Marketing Spending is decreasing in 2009 According to
US DTC pharma marketers.
Budget cuts
48%
Shift to targeted direct-to-patient
16%
Shift to Health Care Professional
14%
Shift to more persistence & adherence programs
9%
Shift to Integrated, nonpersonal promotion
7%
Source:
Cegedim
Dendrite,
2009
Direct-­‐to-­‐Consumers
Industry
Checkup

Senior executives are now asking
“What is the real value of DTC marketing?”
A DTC marketer’s worst nightmare?

DTC ad spending is projected
to be down again this year

Even DTC marketers feel that DTC
marketing is less effective
Effec4veness
of
DTC
Marke4ng
in
2009
According
to
US
DTC
Pharma
Marketers
45%
More
55%
Effec(ve
Less
Effec(ve
Source:
Cegedim
Dendrite,
2009
Direct-­‐to-­‐Consumers
Industry
Checkup

And the hard reality is…
• Only 28% of DTC
campaigns generate more
than 1000 patients*
• Only 18% of traditional TV
campaigns generate a
positive ROI.
• Marketers are being asked
to show proof that their
marketing is working (hard
ROI)
*Nielsen
DTC
study,
February
2008

And with all this going on
More
people
are
self
diagnosing
and
less
are
going
to
their
doctors.

And you wanted
to get into DTC
marketing !?

What trends are empowering
patients?

Internet use for health is
increasing steadily
Since
2005,
the
number
of
pa4ents
using
the
Internet
to
research
prescrip4on
drug
informa4on
has
doubled
to
102.3
million.

More consumers relied on the internet
for health information than their doctors
in 2008

Online health inquiries do have an
impact on decisions and actions
• Six of 10 e-patients say their most recent search had an impact on
their own health or the way they care for someone else:
– 60% say the information found online affected a decision about
how to treat an illness or condition
– 56% say it changed their overall approach to maintaining their
health or the health of someone they care for
– 53% say it led them to ask a doctor new questions, or to get a
second opinion from another doctor.
Fully
42%
of
all
adults,
or
60%
of
e-­‐pa4ents,
say
they
or
someone
they
know
has
been
helped
by
following
medical
advice
or
health
informa4on
found
on
the
internet.

Patients are BLOGGING about
their health experiences

And diagnosed patients are using
social media

And use of social media for
health is increasing every year

OK, so people are using social media for
health information, but can it work
for DTC marketing?

It depends on your company
Risk Adverse
Willing to manage
risk

The reality is
• People are having the conversation about your brand, company
and treatment options.
• Do you want to be part of the conversation ?

For example:
Twitter Mom’s on Gardasil

And the buzz around
Enbrel via Twitter

Google Wiki another voice
for patients & consumers

Should you care?
Yes,
because
pharma
is
not
a
trusted
source
of
health
informa4on
How Americans search for health information
On the Internet

CPG marketers have heard the call
and are shifting dollars to new media

And the increases are broad

What are pharma marketers
waiting for?

But the really big question is?

Is pharma willing to embrace
open branding ?

Right now, most drug companies
are closed brands

More importantly…
Can marketers persuade executives
to embrace open branding?

To make the case,
start with the realities of marketing today
Failure
Success

Marketing as we know it
is no longer sustainable
in its current form.
Bob Gilbreath, Chief Marketing Strategist, Bridge Worldwide
“The Next Evolution of Marketing”
Pharmaceutical marketing is in trouble, not only because it is not
as effective as it should be but also because the cost of
marketing has spiraled out of control and has reached the point
where most pharmaceutical companies are finding it
unaffordable.
Improving Return on Investment in Pharmaceutical Marketing-Spectrum 2008

Its ironic that, as sales decrease and new
drugs become harder to develop, more
companies are choosing to cut marketing
at a time when they really need marketing
to drive business.

The realities of today’s marketplace
1. Increased internet penetration has led to more empowered patients and
empowered patients are consumers of healthcare.
2. Engagement is not a fad. It’s the way today’s consumers do business and
evaluate treatment options and brands.
3. Consumers/patients are sharing their experiences with your products via
word-of-mouth and social media.
4. A new, tougher FDA, with few guidelines on new media, emphasizes risks
that are within corporate guidelines.
5. Segmentation of your audience by demographics alone is not relevant.
Segmentation by psychographics (tribes) means personally relevant
patient messages.
6. Lack of credibility and trust are hurting your marketing efforts.

Traditional media is no longer
sustainable for pharma
• Price and reimbursement controls
• Changing practices - limited time
• Public scepticism of the pharmaceutical industry and its impact on
communication
• Legal issues facing pharma company communication strategies
• Adverse event reporting

Empowered patients are changing
everything, you need to…
 Monitor social media buzz and quantify threats to your
brand.
 Develop a process for responding quickly to
misinformation about your product/brand as well for
accurate information that maybe taken out of context.
 Don’t use push messaging channels; act as an
aggregator for the brand/disease state/product to bring
people together.
 Inform and educate patients about ongoing clinical trials
with your product and post results in easy to understand
language.
 Reach out to develop consumer KOLs
 Use internal resources (medical people, KOLs) to answer
patient questions within FDA guidelines.

Because patients are sharing
their experiences
 No matter what you do or say, patients share their
health experiences on the Internet.
 Act as brand aggregator to bring people together
 Don’t get in the middle of the conversation
 Listen to what is being said, and what is
driving the conversation.
 Ask “what can we do to reach influentials ?”
 Can you get patients to BLOG about your
product?

Mass Market segmentation is dead &
Tribes are the new segmentation
• Tribes are the new communities that
consumers want to belong to and
participate in.
• Businesses must understand these tribes
A
community
of
SSRI
users
on
Tribe.net
and decide which ones they are going
to align themselves with to reflect their
brands and attract customers over time.
The
marketer
that
a[empts
to
reach
and
influence
everybody
will
end
up
reaching
and
influencing
nobody

A tougher, more political, FDA
is now in control
 Reach out to your medical, regulatory, and legal people. Let them know
what other companies are doing and why.
 Ensure they know that the marketplace is changing and why.
 Remember they are not marketers, and they need to understand the “why”
as well as the “how”.
 Lay out a clear scenario of risk/reward (ROI) for everything, but
acknowledge that traditional ROI measurement, by tactic, may be myopic.
 Stay on top of FDA news and enforcement actions. Understand what the
FDA is saying and why and explain it to your team.
 The FDA may change (a meeting has been called for November to explore
social media & health) but this change may be slow.

Credibility issues still exist in pharma
 Consumers don’t trust drug industry messages
 The industry is taking a lot of blame for healthcare
shortcomings.
 Consumers may go to your product website, but they are
going to your competitors websites and health portals to
compare information.
 Take your message to your audience where they are online
and ensure that your key messages are consistent across
the web.
 Don’t ignore media news stories about your drug/brand.
Weigh in with transparency using medical people.
 The first step towards credibility has to be taken.
Give it time, it is a long road.

Life Cycle Management needs to play a
bigger role in DTC decisions
 What is awareness of the disease and
its symptoms with your audience ?
 Set awareness goals and when these
goals are reached, reconsider the
use of TV.
 Focus on solutions to problems, not
product benefits.
“I should have done more”
campaign for Lipitor clearly explains
 Focus on the point-of-difference for the risks of high cholesterol and
provides a solution for consumers
your product.

The days of really big DTC
budgets maybe gone forever
• All marketing people are being asked to “do more with less”
• Company executives may see marketing as more of an expense.
• Measure everything you do with DTC, but also understand that the
key metric that you’re going to be measured against is sales as
business objectives supersede engagement metrics.
• Form a tighter relationship with your agencies and make them
accountable for quantifiable metrics that can be measured (sales?)
• Don’t micromanage your agencies. You hired them because of their
expertise, let them do what they do best.
• Integrate agency people into your team so they can understand
your internal barriers and challenges.
• Good is the enemy of great. If you don’t have the dollars to do it
great, then do something else.

And with all these changes come..

Measure and optimize
continually
 Evolve your message as conditions within the
marketplace change
 Change/evolve channels to ensure effective
reach and frequency
 Online marketing has to continually be
updated to stay relevant. Ensure that you have
a plan to update all online marketing initiatives.
 Review your web analytics thoroughly to create
a decision tree of how consumers are
evaluating your brand/product.
 Eliminate web content that is not being used by
your audience. It’s about them, not your
marketing.

Use research to provide insights
instead of support
• Instead of asking questions that reveal a consumers “intent to
purchase” or “ask their doctor about your product,” DTC marketers
need to break through the clutter to find out what is genuinely
valuable to your target audience.
• Psychographics should be leveraged to develop marketing that
engages consumers
• Don’t use research to overcome your fears
• The right question to ask is “why are we conducting this research?”

Start building digital capabilities
NOW
• Don’t just put one person in Internet marketing.
• Hire someone who understands how consumers use the Internet and
who also has a great background in marketing health marketing.
• Don’t wait for the FDA to issue guidelines. Be willing to take agreed-
upon risks.
• Ensure that your web analytics are being used to tell a story and
identify opportunities for your brand/company.
• Stay on top of online marketing trends and learn from others who are
blazing trails in tactics like social media.
• Best practices: one eMarketing person per brand whose focus is
Internet marketing and only Internet marketing.
• As you have successes, share best practices within the organization
so that marketers start asking “what if….?”

If you really want to anticipate
the future…
• Start thinking... how can we leverage the new
Apple & Microsoft tablets?
• 64% of U.S. physicians own smartphones, and
this will increase to 81% penetration by 2012
• Create customized DTC materials by
physician that can be printed or e-mailed to
patients on demand
• Help physicians help patients and you will
enhance your brand.
• Think engagement... and how do we
measure engagement?
Now
is
the
4me
to
add
resources
to
build
capabili4es

Where
Do
Your
DTC
Marke4ng
Plans
Fall?

“It’s not about you”
The first sentence of the best-selling hardback book in U.S. history,
The Purpose Driven Life

My passion is DTC Marketing
• Passion is the enthusiasm you have for something. It’s the thing you
get energized just thinking about. It’s the topic you never get tired of
learning about. It’s what you never get tired of talking about. It’s
where your creativity soars. It’s being in that zone where you forget
time, space, and even hunger because you are so engaged in what
you are doing.
• My passion is connecting people with health information, ideas,
opportunities and resources in order to see them get and stay
healthy.
• It’s what I’ve been doing in some form across my career: as a
teacher, trainer, online marketer, and now author.
• I love finding and sharing information. Where someone else may get
bored or frustrated hunting down information, I relish the opportunity
to find and share what I discover because in the end every success
equals a difference in a patient’s life for the better.
• richardameyer@me.com