The latest from DTC Perspectives

Spending Down But Not Out!

DTC spending for full year 2008 is now officially in the books. Nielsen says down 18% from $5.3 billion in 2007 to $4.3 in 2008. It is a disappointing but not an unexpected result. Need we remind ourselves that the economy imploded 4Q and spending reflects that situation. I assume some of the decline was because of cuts in media rates which allowed more GRP’s for less dollars. The actual GRP number is probably down only single digits.

The key issue is what will happen in 2009 and 2010. I assume we will see a flattening of spending declines in 2009 and my guess is down around 7% for 2009 and probably up modestly in 2010 as we see a general recovery. I get the sense we are nearing the end of the crisis so we could see strong demand for media in 2010. In the drug world, media buys will be influenced by DTC regulations and national health policies. I assume, however, that DTC will be fine, despite a lot of bluster to end or heavily control it.

There are some interesting findings in the 2008 numbers. For the pundits who annually predict the end of network television you are wrong again. Nielsen says network spending did not decline at all. What we see is that brands are maintaining network television while cutting in cable, magazines, magazine Sunday supplements, and some specialty media. Magazines were down 19%, supplements 37%, and outdoor down 26%.Another casualty of the economy was Hispanic media down 83%. Nielsen does not measure Internet or Point-of-care. My guess is Point-of-care is doing all right because of its general excellent ROI. Internet, a small part of the usual DTC budget is probably seeing declines because of its susceptibility to being victims of budget cuts.

I am sure we will have a spirited debate at the next DTC National on mass versus targeted. Of course the real debate is over allocation between the two, not in choosing one over the other. I do know that the annual call for the funeral of mass media is continually wrong. I also know that targeted opportunities must be continued for that is the eventual future of media. The critics of mass media will say pharma just does not get it and question the competence of drug marketers. They will insult the skills of marketers but they need to persuade not attack. I am only interested in what works so everyone needs to bring their facts not their emotions to the debate.

We will return to DTC growth by 2010 but in the meantime we need to do more with less. I think the clouds are beginning to part and the sun is starting to peek through. At least for this week I can smile a bit despite the 18% decline.