How much to spend on DTC TV

Question mark in a empty living room.

SUMMARY: By far, the biggest question I get as a consultant is, “how much should we spend on DTC ads?”. It’s important to understand that no formula can be applied across all health conditions and products. It varies by the size of your audience and the number of diagnosed and undiagnosed patients.

DTC marketers will do a lot of research on brand messaging, but what’s really important is what action your target audience will take due to being exposed to your message.

Under no circumstances should ANY DTC marketer believe that a patient is going to ask their doctor about/for your product as a result of seeing your DTC TV ad. There are too many barriers between awareness and conversion.

In all likelihood, your audience is going to go online. They probably will go to your website, social media, and other third-party health sites. That’s a lot of noise and confusion, so you need to insist that your agency does both usability testing, which includes measuring the brand favorability.

Therefore, it’s important to understand that TV ads are just one rung in the ladder towards delivering on brand objectives. How much you spend on TV ads is directly proportional to the size of your audience. Market research, upon launch, should be measuring awareness of your brand with your target audience weekly. Your web analytics could also be used as an indication of awareness. There is s direct correlation between web traffic and TV ads for new pharma products.

What about online paid media?

This is another maze for most DTC marketers. First, remember impressions don’t mean a damn thing. Second, there is way too much fraud in programmatic display ads so don’t waste your budget.

The best way to develop great online ads is by spending money on creative that delivers a brand message where your audience is online. There should be several executions of your online creative, which should also be developed by where it’s going to be used.

76% of marketers fail to use behavioral data for online ad targeting.

Search is another area where marketers tend to waste money. Online health seekers prefer organic search results, not ads. Your agency can tell you how many searches for certain terms are related to your product.

Measuring paid online media is actually simple. Set up a dashboard in your analytics program to measure time on site, bounce rate, and pages viewed by paid media. Don’t use overall traffic numbers as they can be deceiving.

Once your brand has launched and new Rx’s are starting to drive sales DTC marketers should not take credit unless they can show that the new Rx’s were driven by DTC and not HCP marketing. I always recommend that market research conduct research with new patients to determine why they became customers.

We recently found that pulmonologists were responsible for switching patients to a new inhaler and that DTC had minimal impact on asthma patients. Regardless of what you believe, a physician’s recommendation still holds a lot of weight with prescription drugs.

So are you telling us TV is a waste of money?

No, not at all. TV is great for awareness, but today, patients do their homework before deciding to ask for your brand. I can’t overemphasize the importance of your digital marketing to convert patients. Brands that spend the money on digital marketing insights and usability along with patient-driven content see a greater ROI than brands that “just develop a website.”

Another issue is cord cutting. A new report by Parks Associates reveals that it’s likely 43% of all broadband households in the U.S. paying for traditional TV will switch to streaming options within the next 12 months. The main reason? Cable is too expensive. There’s big incentive for TV subscribers to cut the cord in favor of Virtual Multichannel Video Programming Distributors like Hulu + LiveYouTube TVSling, and more, with cost being just one of the reasons.

As TV viewership declines and more consumers jump to streaming services like Netflix, media companies have only a couple of options to generate the advertising revenue that Wall Street expects: They can raise prices, run more commercials or do a little of both.

The overall DTC environment is changing rapidly. Your agency can help you transition from vanity ads to ads that can be measured towards your goals but first fall out of love with TV.