Healthy Skepticism Library item: 14746

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Liebman M.
Listen Up, Publishers Say - Journal Advertising Sells!
Medical Marketing & Media 2000; 35:(3):89-94
http://www.rxpromoroi.org/add_reading/listenup.html

Full text:

Executive Summary
All major pharmaceutical companies use journal advertising. In the industry mind set, journals create product awareness, not new prescriptions. But studies supported by the industry contradict that common belief by showing that advertising does, indeed, sell drugs. An information program now is underway by the Association of Medical Publications (AMP) to set prescription drug marketers straight on the benefits of the medium. Will marketers change their current thinking?

Often medical journal publishers sound like Rodney Dangerfield: “I don’t get no respect”. Backed by solid evidence, publishers feel that they offer prescription drug advertisers the best promotional medium for reaching an audience of prescribing physicians. However the industry does not back medical publications with the investment clout it puts into other promotional efforts.

In 1992, the pharmaceutical industry spent $279.6 million for advertising just in the multi-specialty category of 65 medical publications. In 1999, the industry expenditure was $278.9 in 62 journals in the category, according to data from Journal Advertising Report (JAR). Despite rising space rates during eight years, revenue was flat. This is explained by data showing 59,785 advertising pages were published in multi-specialty publications in 1992, while in 1999 the total was 42,362, or 29 percent fewer pages.

Using the same time frame, there were about 36,000 sales representatives in the industry in 1992. That number almost doubled to 70,000 by the end of 1999.

The expenditure in 1992 on direct-to-consumer advertising was negligible at $151,000. In 1998 it was $1.3 billion, and last year it likely exceeded $1.7 billion.

Advertising revenue in medical publications has not increased while expenditures for other promotional activities have sky-rocketed. The industry’s total promotional spend increased from $5.5 billion in 1995 to an estimated $9.8 billion this year to cover increased consumer promotion and sales force size. During that time, multi-specialty journals’ share of the budget has dropped from 5.1 percent of promotional spend to 2.8 percent. Considering all medical/surgical publications, specialty and multi-specialty, the promotional share for print advertising went down from 6.21 percent in 1995 to 4.77 percent in 1999. Wonder why journal publishers are concerned?

“Promotion is up but our share is down. In 1999 the number of advertising pages was below the total for 1992,” said Ken Sylvia, immediate past president of the Association of Medical Publications (AMP). The AMP consists of 18 independent and association publishing companies which produce and distribute more than 85 titles, including the most popular clinical and non-clinical publications.

“The pharmaceutical industry has enjoyed double-digit growth that we haven’t participated in,” Sylvia said at an AMP executive session. “Launch campaigns run for a shorter time, maintenance units are smaller, insertions are less frequent.”

Though the journal industry is mired in a no-growth position, ironically, all marketers support journal advertising. It’s as comfortable as apple pie and as common as white bread, which may be the problem.

AMP insists that journal advertising is far more nutritious. Journals do a great job in educating and selling physicians, but publishers have not been as effective in educating industry marketers, according to Sylvia, who is co-publisher of Womens’ Health in Primary Care.

To position journal advertising based on performance, the AMP is developing an extensive research, information, and promotion program. It has asked its membership to support the program and received contributions and pledges for an impressive sum in the face of flat revenues.

The resulting campaign directed to the industry is designed to show that journal advertising does more than provide reach and create awareness. It provides data that show advertising sells, a concept widely accepted in consumer marketing but only occasionally in the professional arena.

To initiate and develop the campaign, AMP conducted an advertising agency review and selected Sandler Communications, New York, to handle it. The first step was to undertake a client ‘perception’ study to determine more specifically where journal advertising stands in the minds of industry executives.

The study, conducted by Hoboken, NJ-based Innovative Media Research, questioned 125 drug company marketing executives, including 50 on the level of group product manager or above, and 75 ad agency account management executives and media directors.

In response 94 percent said medical journal advertising was the most frequently used promotional vehicle. Both medical journal advertising and representative sales calls scored 9 out of a possible 10 as the top promotional “tools” used to announce a new product or indication.

Budgets are mostly flat
And now for the down side. In terms of ability to increase prescriptions of currently marketed products, the responding executives put medical journal advertising in seventh place in effectiveness, with a rating of 5.5 out of a possible 10. In the opinion of those polled, that’s a drop of 40 percent in ad effectiveness for current products compared to new ones.

For the near future, only 23 percent of company executives see an increase in spending for journal advertising. It ranks number 16 on a list of 18 promotional activities likely to get an increase in budget. (Number one in budget increase is Internet advertising and promotion.)

Sixteen percent of advertisers predict a budget decrease and 58 percent expect journal spending to remain the same. Not impressive when physicians provide the prescriptions or product “push” in response to DTC advertising’s “pull.”

Advertisers need more information about the medium, they say. Specifically,
• Return-on-investment information, studies of how journal advertising increases sales compared to and working with other promotional media.
• Readership information and promotional message retention. That includes studies of high prescribers and how they act and react compared to other physicians.

If AMP provided the desired ROI and other information, would spending for journal advertising increase? Yes, said 39 percent of 196 executives answering the “what if” question, up from the 23 percent who answered before. Forty-four percent of executives said they would consider increased spending rather than simply maintaining the same budget if provided with more information. A hard core 17 percent still said no.

There’s a paradox here. The information that advertisers want, at least a major part of it, is available from PERQ/HCI, the research organization that has undertaken the most extensive media research in the prescription drug industry. PERQ/HCI Chairman Marshall Paul reports that 32 of the largest pharmaceutical companies buy one or another type of ad effectiveness studies that show the role of advertising in communicating drug information to physicians, the manner in which this information is absorbed, and the resulting actions taken.

How advertising works
According to PERQ/HCI research, advertising exposure leads to campaign recognition, product recall and “message penetration.” That appears to be well accepted by marketers. Studies by PERQ/HCI find that message penetration leads to an alteration in prescribing intention Ñ when the patient with the right indication comes along, a change in prescribing behavior is considered and, at a point, a prescription written for the advertised product.

Of course, penetration can vary with the type of message presented and the drug being advertised. Marshall Paul reports that in a study of 38 campaigns, a unique product advertised leads to an average message penetration of 64 percent. For a product with competition in its class, advertised with a unique message, the correct message association was made by 42 percent of physicians. When the product ad had a so-so generic message, the recall was only 13 percent.

There are factors which make advertising ineffective. In a study of 60 ads, 15 of them or 25 percent were found to produce an unfavorable response. Problems with the advertising message was the most frequent offender. Improper funding and poor campaign executions were also negative factors in other campaigns.

Journal advertising is one element in a media mix. How it works with other components was reviewed by PERQ/HCI in studies involving 1,885 contacts with targeted physicians. Five percent of physicians learn of products without promotion — through journal articles, corridor conversations, etc. Not enough to make a market.

Journal advertising alone is very successful in delivering a memorable message, with a penetration of 34 percent. Detailing alone accomplishes only 16 percent correct message recall, less than half of journals alone. Typically, detail messages are individualized therefore not consistent, and often not presented in full, or repeatedly, as are advertising messages in print.

Studies show ROI
The best results in message recall, 57 percent of physicians, are achieved by a combination of advertising, detailing, and use of a sales aid.

Twenty-two drug companies commission PERQ/HCI to perform studies of return on investment (ROI) for professional advertising. An analysis of 45 campaigns shows that, overall, unique product advertising brings a return of $3.05 and competitive established products bring a return of $2.46 for every $1.00 spent in advertising.

Fourteen campaigns advertised drugs facing competition that were on the market from one to four years. Print advertising brought a return of $2.43 for every $1.00 spent. In seven campaigns analyzed for drugs on the market for four or more years, the return was $4.62.

Study results show that advertising improves the ROI from detailing 75 percent of the time by 30 to 40 percent. Marshall Paul said that “advertising magnifies the detailing effort at a fraction of detailing expense. In effect, detailing provides the power in the marketing effort and advertising provides the efficiencies.”

The participating companies have supported the ROI testing program for the past six years, Paul said. This suggests that they support the approach. Yet marketing executives do not seem to be aware, or do not accept, the results of these studies. What’s the problem?

The AMP has to buck a trend in which advertising may be seen as effective but hardly unique or exciting.

Its initial effort is an advertising campaign directed to company and agency executives now appearing in five of the marketing and advertising publications and through direct mail. The first ad states, “one surprising benefit of medical journal advertising [is] soaring Rxs.” It continues, “advertising alone proven to increase Rxs.”

Determining who must be made aware of measured advertising benefits on a company-by-company basis is another task AMP faces. This is especially needed with the big turnover in product management and marketing staffs, with new recruits lacking a background in media effectiveness in the pharmaceutical industry.

Because Marshall Paul specializes in the prescription drug industry, some executives question the results of the studies. But, all of the PERQ/HCI studies do not reach conclusions favorable to a company’s advertising campaign. Twenty-five percent, or 15 of 60 studies, showed individual campaigns to be ineffective. “We should state that advertising is effective, but sometimes the way we use it is ineffective,” Paul said.

But that has not changed the perspective. These executives would like to examine studies from other sources.

As a result, companies underspend in support of journal advertising,” Paul says. “About two-thirds, or certainly more than half, of companies under-advertise.” ROI data often are not used appropriately and different studies are not necessarily compatable, he says.

Journal advertising may produce a good ROI but often mid-level executives do not understand or follow the promotional response curve, according to Paul. “They don’t ride the curve and keep pushing until they obtain maximum response. They look for something new rather than reinvesting. They find it more important to do something new.”

There seems to be one more widely acknowledged problem facing the AMP in its communications task. Top executives often are not convinced that advertising works. They feel that it is detailing that counts. Are they likely to change their opinion?