DTC in Perspective: DTC Advertising turns 30
Yes, DTC is 30 years old, not 18 as some say, thinking it started in 1997 after FDA liberalized television regulations. The FDA started to allow it in 1985 after lifting the moratorium on doing prescription drug ads. DTC spending was at a trickle in the late 1980’s and started to take off with a print boom in the early 1990’s.
In 1991 spending was only $55 million but steadily grew through 1996 to $595 million. Most was in print but some branded television reminder ads also started to appear. The FDA recognized the folly of allowing drug companies to state the brand name on television without allowing the indication. Consumers saw television ads screaming Claritin, Claritin, Claritin without mentioning what it was intended to treat. Drug companies used print to tell what it was for, and TV reminders became the Hamburger Helper of brand name awareness to supplement the full story told in print.
In 1997, FDA issued a guidance allowing drug companies to do branded with indication television without being forced to scroll the whole package insert. This led to the feasibility of the 60 second ad we know and love today. The spending floodgates opened rising steadily each year to reach over $5 billion in 2006.
Then the spending started declining steadily to the mid $3 billion level by 2013 largely due to big brands going off patent and a slow down of new drug launches. Some industry experts felt DTC could be on the outs. Some drug company executives spoke out against it saying it has caused image issues, and DTC was threatened with moratoriums, tax penalties, mandatory pre-clearance. For the past three years we have seen a strong rebound driven by many new brands heavily using DTC. We could see $5 billion again very soon.
So why does a 30 year old industry still feel so unsettled? What still needs to be learned? Are we now all experts or still relative novices? DTC, unfortunately, will always be unsettled. This is because many influential people in government, medicine, consumer watchdog groups, the media and insurance dislike it. The arguments are many and we all know them. DTC overstates benefits, it raises prices, takes money from R&D, causes doctors to waste time explaining drugs seen on ads, and creates demand for over treatment.
Given the drug companies are on the presumptive Democratic nominee’s enemies list, DTC will be unsettled for the foreseeable future. Thirty years of advertising has not mellowed the critics. Threats to DTC will remain a fact of life from outright bans, moratoriums on new drug advertising, forced reporting of ad expenditures versus research, taxes on advertising, restrictive FDA policy, public pressure and a media quick to vilify drug companies.
Is there now a marketing maturity through accepted principles and understanding how best to do DTC advertising? I would say we have a come along way since the early 1990’s but still have a ways to go to reach maturity. Health care is such a dynamic industry and changing in consumer behavior and technology faster than we can absorb. We all know how social media exploded while FDA was puzzled how to regulate 2015 media with 1970’s regulations. We have gotten great experience making television and print ads, are getting good at point of care media, and have volumes of good ROI data. Our DTC marketers are no longer pulled from the detail forces of drug companies, and most have solid consumer advertising backgrounds.
The next five years will create massive opportunities for DTC marketers. We have the multicultural explosion still barely recognized in DTC advertising. We have Internet spending lagging other industries but has become the main source of health information. We have consumers much more involved in how to spend their increasingly higher health care co-pays. We have a government adding millions of people to health care insurance. We have a shortage of doctors to see patients, getting less time with each patient meaning they need more help explaining treatment options to patients.
We also have a technology explosion in health records, health trackers, and other fitness wearables. We are seeing the start of remote medicine, allowing diagnosis and treatment online. We see an explosion of retail medicine through mini-clinics. We can get vaccines at our supermarkets. The consumer expects medicine to be convenient and reasonably priced.
DTC will be a part of all these trends and although television will still be a big part of most media plans, new approaches will be evaluated, tested and added to DTC media. At thirty, we can say we are entering the prime of the DTC era and our experts will need to stay busy making sense of the many forces shaping consumer advertising.
A few years ago some in our industry, the media, and in medicine were predicting the death of DTC. Instead it has resumed a strong growth trend and we have escaped a premature death. DTC works well and drug makers recognize it. There is no reason to think DTC will not celebrate 40, 50, and beyond. I am at 20 years in DTC and look forward to many more.