The latest from DTC Perspectives

Planning for Uncertainty

Planning DTC efforts for the next few years has become an exercise in multiple scenarios. First, we have the massive health care reform we are promised by President Obama. Next, the expectation of declining media rates makes the decision to buy upfront or wait for spot prices a tough one. Third, the FDA is tinkering with risk disclosure requirements making creative ads more difficult. Finally, promotional budgets are getting cut as drug companies look to protect the profit line.

These four major uncertainties have an infinite number of offshoot issues. So, how does one deal with developing and executing a DTC plan? For 2009 the job is a bit easier than the out years. The health care reform plan may be passed later this year but will not be implemented until 2011 or 2012. The media rate declines are real as long as the economy stays weak, but premium media properties will maintain their pricing power. Therefore do not expect bargains by waiting for highly viewed shows. The FDA draft risk guidance makes it imperative to start copy development way in advance of launch but DTC as we know it will still be acceptable to FDA. Budget cuts will be a fact of life but not draconian for 2009. As long as ROI is good, drug companies will keep spending.

Uncertainty breeds opportunity. The best marketing departments will use these tough times to be ready for a promotional world that is more restrictive, if not in 2010, then likely in 2011 or 2012. That means testing of how to reach consumers with more detailed and more targeted ads. It also means exploring a new type of risk heavy television ad that may be required in a few years. Marketers should be ready to deal with media budgets that will be 10-20% less in 2 years. I am not saying budgets will be cut that much but smart marketers will test plans with those levels.

Drug companies should all be spending a lot more time and manpower considering the “what if” scenarios. In fact I would dedicate a senior DTC marketer at each company to write an uncertainty plan for each brand. The best drug companies will be the fastest to react to change. That will take the top talent thinking about it well in advance. DTC will be here when the reform dust clears but in what shape needs to be discussed, debated and dealt with at the DTC marketing companies this year. I guarantee it will be a frustrating exercise requiring lots of assumptions but if done right will provide competitive advantage. There has never been a more interesting time to be a DTC marketer.