Launching a new drug: How much to spend on DTC?

HERE”S THE DEAL: Determining how much to spend for the launch of a new drug is a challenge we all face and you have to be ready to shift funds from channels that are failing to provide the lift in brand awareness to channels that hit the bullseye on your objectives.

The biggest request we get from clients is guiding them through the process of allocating total DTC spend along with channel allocation. There are no magic formulas to determine how much to spend and where the money should be spent but what we continue to find is that a lot of clients don’t do their due diligence.

Before you begin

Every healthcare condition is a unique micro-market with its own market characteristics. You should have an in-depth knowledge pf the following:

1ne: How big is the market (not in dollars but in people).

2wo: An in-depth knowledge of the market segments. Where do they get health information? Are they communicating with each other on social media? What percentage are decision-makers versus caregivers?

3hree: What are your competitors doing on and offline to reach patient segments?

4our: A TESTED message that leads to more action of a patient saying “I want to know more”.

Determining the spend

Now comes the hard part. How much should you spend?

You should first start with market sales trends and forecasts for your product once you launch. One of my favorite tools is Nielsen BASES simulated test marking tool. In summary, you enter some data on your market and spend and Nielsen will give you sales projection dollars. It’s not 100% accurate but it’s been my experience that it’s within the bullseye.

What channel to spend your DTC dollars

This where the day-long meeting’s start and arguments begin. If you have a broad audience TV is still the best channel for awareness BUT it’s essential that you measure reach and frequency against sales targets. The biggest mistake I see is that too much money is allocated to keep running the spots so that you actually start getting a negative ROI.

Digital..the elephant in the room

Too many clients still spend way too much on paid media with the mistakes of not developing better creative and measuring each against metrics like time on site and pages viewed.

Clients also tend to spend a LOT of money on Google search when online health seekers trust organic search results versus paid search results. Again you should be measuring every paid search term against online metrics.

Finally, there is your product website. Too many pharma digital agencies have gotten too big and as a result, they recommend you spend a lot of money on website development which is not wrong but your site is designed for users not marketing people.

Usability testing is non-negotiable and should be used to guide everything from site navigation to content. In addition, you need to review your website on a regular basis to delete content that’s not being used. New content should be added as you learn what your audience’s information needs are (social media monitoring).

Measuring your spending is always the key but DTC managers need to ensure they have the right amount of money to execute versus a shortage of money which is guaranteed to lead to failure.