Brave New World in emarketing?

With the increasing short- and long-term pressures on pharma and the strategic focus on new business models, one would expect that new channels would be at least one of the key new tactics.

By Anonymous (not verified) on May 9, 2009

With the increasing short- and long-term pressures on pharma and the strategic focus on new business models, one would expect that new channels would be at least one of the key new tactics. This would certainly be the case in the US, as this market has been one of the original leaders in the Internet space, and has arguably been hit harder than the European pharma companies in the recent downturn.

So I was really interested to learn more about the hard e-numbers for the US market, which were published in Medical Marketing & Media's "Pharma report 2009" (http://media.haymarketmedia.com/Documents/7/pharmareport09_1634.pdf)

The good news? Well, online spending is increasing in 2008 vs 2007...only 2 of the top 20 are decreasing their digital marketing spending (vs 9 who reduce overall spending).

And yes, as expected, Merck is leading the space - in fact, it spends about double the amount of the next company, Johnson & Johnson. Then we have a small peloton of 3 players, 80% behind Johnson & Johnson. One of them is a usual suspect: GSK (sales rank 2). But the other 2 are medium-sized players: Boehringer (sales rank 13) and Shire (18). The industry leader, Pfizer, spends 40% less than these online....

The bad news? Even the most advanced company, Merck, spends only about 6% of its total promotional budget on ebusiness...J&J is just under that, and the leader is in fact...Shire, with close to 9%. For Pfizer, it is under 1%.

Of course, these data do not capture everything. Digital marketing is relatively novel still and perhaps more difficult to measure than say, salesforce. The reported numbers may not take into account the investment in internal resources, which is increasing everywhere, and may not fully capture all spending across different platforms - websites, SEM, affiliate marketing, social media, email marketing, e-adherence programs etc.

Nevertheless, for an industry which needs to adapt fast to the fast-paced external changes and whose fast expanding stakeholder portfolio is moving online fast, it seems that big pharma continues to move slowly. Too slowly.

At any rate, they can learn from other industries like FMCG, where about 10% is spent online (and most observers say that even that is way too low vs the potential of the medium). Big Pharma can even learn from some of their bold medium-sized competitors, like Shire and, arguably, some innovative small companies (which were not on the radar screen of this report).

So, what's the bottom line? The time to make a transformational change in the marketing mix in favour of digital is NOW. Wait until everybody else makes the move and you are too late. Lead in this space and you will prevail. Your customers and shareholders will applaud it!