Pharma ad budgets stay flat, even as spending jumps across the board: Report

Print 11 December 2015
Emily Wasserman / FiercePharmaMarketing

Ad budgets are set to expand next year, with industry watchers predicting a 3% to 5% jump in spending for 2016, according to a new report from media investment group GroupM cited by MediaPost.

But things might shake out a bit differently in the land of Big Pharma. Spending on pharma ads and expenses is expected to fall by 1.7% in 2016, although companies will shell out $21 billion on promotional efforts, according to Schonfeld & Associates' annual Advertising Ratios & Budgets. That 1.7% decline compares with a 2% drop in ad spend last year, creating a relatively flat trajectory for pharma promotional spending.

Digital outlets such as mobile, OTT video and social media will fuel the overall increase in ad spend, a trend that pharma has already picked up on.

Auxilium ($AUXL), for example, rolled out a digital campaign last year for its ED med Stendra, running spots online that talked up the drug's speed to action. The campaign featured black-and-white ads with flirty couples and taglines such as "This time he was ready ... before they got home."

Images from Pfizer's "Get Old" campaign--Courtesy Pfizer

Pfizer ($PFE) is also hopping on the digital bandwagon, unveiling its digital-first "Get Old" campaign in 2012 to appeal to an older demographic. The campaign has grown by leaps and bounds since then, helping boost the company's brand and deliver on then-new CEO Ian Read's objective that Pfizer "be respected" by consumers.

In the ad business overall, television spend, on the other hand, will either stay the same or drop off in 2016, according to GroupM's forecast. But pharma still relies on TV ads for its bread-and-butter ad dollars, and things will likely continue in the same vein next year. Pfizer, a serial top spender, was the talk of the town last year with its new Viagra DTC ad, which featured a woman talking up the real-world benefits of the med. And the company has also sunk dollars into promoting its off-patent pain pill Celebrex with "Body in Motion" TV commercials.

Even though some see pharma ad spending as coming in flat for 2016, there's still some light at the end of the tunnel for drugmakers rolling out new campaigns, Carol Greenhut, president at Schonfeld & Associates, said earlier this year.

"Like the rest of the economy, pharma saw a big slowdown and is now gradually picking up," Greenhut said over the summer. "It's a very healthy industry in terms of advertising and especially in all the new channels including social media. As we go forward, that will grow even more."

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