DTC in Perspective: Nielsen Says Record 2016 DTC Spending
The final 2016 spending was released recently showing $5.66 billion versus $5.18 in 2015. DTC Perspectives has received some detail on these numbers and we ran some analysis explaining the growth. In 2014 spending was $4.33 billion so the last two years has seen growth of 31%. The 2016 number was a record and we expect $6.0 billion to be reached in 2017.
DTC spending has grown historically when new brands launched DTC programs. That certainly happened in 2016. Total spending rose about $500 million in 2016. That rise can be largely explained by new brand spending. There were 12 new brands that launched significant DTC efforts in 2016 accounting for about $730 million in media. That is about 13% of the total. There were some huge spenders among new brands. Cosentyx, Entresto, Rexulti, Taltz, Tresiba, Viberzi, Trintellix, and Entyvio all spent more than $50 million in their launch year.
Adding to the new brands were brands in their second year adding to their spending. Trulicity and Breo Ellipta each added over $100 million to their 2015 total. Adding new brands and newer brands increasing spending resulted in an increase of over $1.2 billion versus 2015. With a net rise of $500 million that means some brands must have reduced or cut spending entirely.
Several key spenders withdrew entirely from DTC advertising. Tanzeum, Auvi Q, Spiriva, Duavee, Levemir and Afrezza withdrew entirely accounting for $210 million in reduced media. Large cuts in budgets were seen in Cialis, Latuda, Jublia, Onexton, Belsomra, Crestor, Anoro Ellipta, Kerydin, and Osphena. These cuts reduced spending by $500 million.
There is a diverse portfolio of brands advertising. There are 58 brands with significant budgets of more than $25 million. The top 20 brands dominated and spent 55% of total media. While most DTC brands do both television and print there are many that have small budgets used for print, point of care and internet. There are 84 brands with budgets large enough to do at least print and some targeted web and point of care.
On a company basis Pfizer is the dominant spender at $1.2 billion up about 10%. Notable was Novartis spending $250 million up from less than a million in 2015 from new entries Entresto and Cosentyx. Diabetes drug Trulicity gave Lilly a 40% rise. Opdivo powered BMS to a 15% rise in spending.
We do not have the data yet on splits by media type but sources tell us that there is no significant change in the share by medium. That means television remains dominant and no major brand launches a DTC effort without using television as a large share of the media plan. Nielsen does not report on point of care but the industry remains a growth driver.