Why pharma and digital may be a doomed relationship

Online advertisers are starting to wonder what exactly they are paying for?  In theory, digital marketing is “vastly more efficient” than conventional advertising, because online ads on social media or websites can be tightly targeted at specific audiences. But while more ad dollars will be spent online than on TV for the first time this year, some advertisers “smell a rat.” About 70 percent of marketing executives say they’re dissatisfied with the state of digital marketing , according to the Interactive Advertising Bureau.

The chief brand officer of Procter & Gamble, the world’s largest advertiser, even “came close to accusing the digital industry of perpetrating a massive con” at the IAB’s annual conference in January.

The problem is that no one really knows if online ad campaigns are effective. “An ad can flash up on a screen for a fraction of a second and be counted as a view, or ‘impression,’ at which point the media owner and agency take their cut.” Never mind that 37 percent of ad impressions come from bots, according to the Association of National Advertisers. Yet web advertising giants like Facebook and Google refuse to commit to shared standards for audience measurement, “as TV companies did years ago.” Tech titans got rich exploiting advertisers’ naïveté. “That may be about to change.”

However, pharma ads and marketing is quite different.  Nobody is going to see a DTC ad on TV and run to their doctor to ask for an Rx.  Research consistently shows that people are going online for health information yet the share of digital spending for pharma remains flat.

Pharma’s digital spending is hard to measure.  Display ads are often separate from search and there is no “bucket” for website development.  Too many agencies are convincing clients to use programmatic buying for ads, but in our analysis these buys provide very poor metrics.  Online ads can be effective, but only if the message is relevant to the audience on THAT site.  I recently asked a couple of pharma digital agency executives if clients were testing and optmizing ads and the answer was a loud “no”.  “It’s hard enough getting clients just to commit to digital let alone developing a flight of ads to test” said one VP.

Can digital ads be effective for pharma?  Yes, but it requires a commitment to digital and an understanding of how patients are making health care choices. As digitization penetrates more fully, it will dampen revenue and profit growth for some, particularly the bottom quartile of companies, according to research, while the top quartile captures disproportionate gains. Bold, tightly integrated digital strategies will be the biggest differentiator between companies that win and companies that don’t, and the biggest payouts will go to those that initiate digital disruptions .

Fast-followers with operational excellence and superior organizational health won’t be far behind. But can forward thinkers convince pharma managers?

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