DTC Advertising Booming in Emerging Markets, but ROI Underperforms in the U.S.

RESEARCH TRIANGLE PARK, NC--(Marketwire - Jul 12, 2011) - The return-on-investment for Direct-to-Consumer advertising in the United States lags behind other promotional methods, such as patient adherence and physician support programs, despite past success, according to a new benchmarking study by Cutting Edge Information.

New data from "Pharmaceutical Brand Lift: Marketing ROI and Budget Allocation" show that pharmaceutical marketing executives allocate 24 percent of their budgets to DTC advertising in the U.S. but attribute only 16 percent of revenue generated as return on the DTC investment. However, in the emerging markets where DTC is allowed, companies see substantial returns on advertising. Part of this discrepancy likely comes from the history of DTC.

"Healthcare consumers have become jaded to, or at the very least, often disregard this type of advertising," said Eric Bolesh, research director at Cutting Edge Information. "DTC is still quite new in many emerging markets, however. The freshness of the message leads to greater effectiveness and better ROI."

Cutting Edge Information found that in the U.S., other tools such as patient adherence and provider support programs are outperforming the percentage of total brand revenue generated by DTC advertising. Survey data (information available at http://www.cuttingedgeinfo.com/research/marketing/brand-lift/ ) show that provider support programs generate an average of 26 percent and patient adherence programs generate 22 percent of brand revenues compared to DTC advertising's 16 percent.

In emerging markets, DTC advertising generates a similar average of 15 percent of brand revenue, but patient adherence programs and provider support programs generate only nine percent and eight percent, respectively. Continuing medical education (18%) and product samples (16%) have more traction in emerging markets.

"Pharmaceutical Brand Lift: Marketing ROI and Budget Allocation" examines the brand impact and return on investment for various pharmaceutical marketing budget strategies. The study provides benchmarking data for established and emerging markets developed with input from 28 pharmaceutical and biotech companies.

The study is designed to help companies meet goals identified by benchmarking partners, including:

• Boost brand value and the corporate bottom line with benchmarks for specific marketing activities.
• Determine the effectiveness of both traditional marketing activities and newer tools, including Internet-based channels.
• Track hard-to-find pharma marketing ROI data for various activities.
• Discover where marketing executives can best make future investments.