The latest from DTC Perspectives

DTC INSIGHTS Alert: "Reported" Ad Spending Shows No Growth in Q1

The “reported” spending for DTC advertising was off slightly in the first quarter of 2008 (declining less than $1 million on a base of roughly $1.3 billion), according to Nielsen Monitor-Plus data.

Even with no ad-spending growth in the quarter, however, the results marked a turnaround for DTC marketing from last year's fourth quarter, when reported spending declined 15.2%. That marked the first time in 10 years of DTC that reported spending dropped in a quarterly period. 

The spending in Q1 2008 as reported by Nielsen Monitor-Plus was $1.2927 billion, compared with $1.2935 billion in the year-ago quarter.

The two top media channels struggled in the Q1 period, with DTC advertising on network TV falling 3.3% (excluding pharma corporate advertising) and print DTC in consumer magazines down 2.5% (again excluding corporate ads). Network TV captured almost 34% of all measured DTC advertising in the period.

Among brands, a decline in spending by the leading sleep remedies was offset by major campaigns from five “new” brands (they did not advertise in Q1 2007, all of which had reported spending of more than $20 million): Veramyst (GSK), Celebrex (Pfizer), Mirapex (Boehringer Ingelheim), Chantix (Pfizer) and Symbicort (AstraZeneca).

The sleep treatments Lunesta (Sepracor), Ambien CR (Sanofi-Aventis) and Rozerem (Takeda) trimmed DTC spending in the Q1 period by 42%, 33% and 74%, respectively. The aggregate total spending cuts for the three leading advertisers was more than $80 million, according to Monitor-Plus data.

DTC INSIGHT:
Given the current economic climate, the Q1 reported spending data should be viewed as a positive development for media companies and ad agencies that are heavily focused on DTC advertising trends. The big decline in DTC advertising in last year's Q4 is beginning to look more like an anomaly rather than the start of a downturn. DTC INSIGHTS continues to forecast a 0 to 3% growth rate for reported DTC spending in 2008.

MORE INFORMATION: The June issue of DTC INSIGHTS will publish a more detailed analysis of the Q1 spending trends. For information on subscribing, send an e-mail to Mark@DTCPerspectives.com.