DTC ads growing more effective
Some things get better with age. Direct-to-consumer (DTC) advertising appears to be one of them, according to new research by Ipsos PharmTrends. Over time, drug comparties have developed a better understanding of patients, their attitudes and habits. They’ve learned to use DTC advertising more wisely and appropriately, says Fariba Zamaniyan, director of Ipsos PharmTrends, a syndicated service that tracks consumer purchase behavior of both prescription and nonprescription drugs. Strategies have become more focused and targeted; executions have improved. Media plans have become more powerful and effective.
Some findings:
- DTC awareness levels are higher for brands that launched DTC in 2001 and beyond, compared to the early DTC years.
- For DTC launched before 2001, the average first year ad awareness was 56.0 percent.
- Comparatively, for brands introduced in 2001 and 2002 that used DTC, ad awareness during the first year was 69.9 percent.
The effect of DTC in encouraging consumers to talk with their doctors and ultimately, fill prescriptions has also improved in two different ways. First, the proportion of prescription brand buyers claiming to have asked their doctors for branded prescription drugs because of DTC is higher for themost recently launched brands than for brands launched earlier. Newer brands (such as Clarinex and Nexium) have a higher percentage of requests due to DTC (10.9 percent, net average of leading DTC Rxs with a DTC launch after 2000) than older brands such as Lipitor and Pravachol (3.9 percent, net average of leading DTC Rxs with a DTC launch before 2001). The exceptions were Prevacid and Singulair, which had 6.2 percent and 5.9 percent respectively of its buyers requesting the drugs because of DTC.
Second, DTC advertising is impacting consumer/patient persistency levels, generating more scripts among self-reported ad aware vs. not ad aware prescription brand buyers. Newer DTC launches, such as Nexium and Advair, have prompted on average one additional script fill in their first year of DTC among those buyers who selfreported they were aware of advertising for that drug in any medium (television, radio, print, etc.).
On the other hand, older products on average experienced about half as much additional script fulfillment among those who were aware of DTC advertising for their respective brands. The exception to this pattern was Singulair, one earlier brand that matched the success of later brands in generating higher consumer persistency levels among DTC influenced patients/consumers.
Before 1997, television DTC with both brand names and indications (the conditions they are designed to treat) was not permitted in the marketing and promotion of prescription drugs, in 1997, U.S. Food and Drug Administration guidelines were changed. Since then, TV DTC promotional campaigns have fewer restrictions, changing how drug manufacturers market their products to consumers. Beginning in 1999, the FDA guidelines mandated coordinated TV, magazine, Web site and toll-free numbers in all campaign executions. FDA interventions such as this ensured better integration of multiple media vehicles and as a result, encouraged development of more effective and consistent campaigns that made information easily accessible to patients and consumers. In the early days, DTC advertising reflected a lack of drug company and ad agency experience in this area.
Co-pay concerns drive patient PPI switching
Concerns about high co-pay costs lead 25 percent of patients each month to ask their doctors or pharmacists to re-evaluate their PPI prescriptions, according to the new "Impact of Co-Pays on PPIs" study from Market Measures/Cozint, East Hanover, N.J. About half of these re-evaluations result in a switch to a lower-cost alternative. When switches do occur, patients are able to save about $22 per prescription.
The vast majority of the time, patients must take the initiative to start the discussion about lower-cost alternatives. In about 80 percent of cases, patients begin the co-pay conversation with their health care providers. When faced with patient concerns, pharmacists are willing to explore PPI options with lower co-pays. In fact, when patients raise a co-pay issue, pharmacists are unlikely to support the value of a higher-cost product. Almost 40 percent of pharmacists tout the benefits of lower-cost PPIs in response to patient questions - and encourage switching to less expensive options.
Findings in the study, fielded in September 2002, are based on Internet surveys with 639 patients and 298 pharmacists, representing 197 chain and 101 independent stores. Qualifying pharmacists had a conversation or contact about a PPI product during the past week - with, for example, a patient or family member, a physician or office staff - that resulted in a re-evaluation of a third- or fourth-tier product. Qualifying patients were required to be taking PPI therapies currently or to have received a PPI prescription within the past six months.
Typically, in the PPI class, co-pays of $35 or more motivate patients to push back on cost issues, and ask their physicians or pharmacists to re-think their original prescriptions. Patients consider co-pays of $16-$18 acceptable for PPIs. Sensitivity to higher copays is greatest among patients who are filling multiple prescriptions each month. Those who are taking another medication with a first-tier or secondtier co-pay are most likely to question their health care providers when faced with a higher-tier PPI product.
"Clearly, patients play an important role in driving co-pay discussions and ensuring their doctors or pharmacists are providing the treatment options that offer the highest benefit at the lowest cost," says Elizabeth Rountree, executive vice president at Market Measures/Cozint. "In spite of the important role they play and the potential savings they can realize, fewer than half of PPI patients actively seek copay information, with most of them depending on their health plans for copay guidance. The majority of PPI patients - about 75 percent - have not even considered raising the issue of co-pays to their health care providers, with many believing that physicians or pharmacists have no control over cost."
Cost-driven switching varies by brand. Nexium, Prilosec and Prevacid show the highest levels of switching, with about one-fifth of prescriptions for these products changed to lowercost branded alternatives each month. Protonix and Aciphex have cost-driven switch rates of only 14 percent and 13 percent, respectively.
When patients think that their PPI brand is too expensive, they do not react by trying to stretch or postpone their prescriptions. Instead, they either fill it anyway or ask about other, lowercost brands. Patients say that their physicians are most influential in steering them toward lower-cost alternatives, while their health plans are least influential.
Although cost is important to PPI patients, effectiveness remains the most critical factor when considering a PPI treatment. When patients discontinue or switch PPI therapies, it’s primarily because the drug did not achieve the desired effect. Few patients switch treatments just because of cost considerations.
When asked what factor has the greatest influence over their willingness to pay a higher co-pay for a PPI product, almost half of all patients cite efficacy. Another 28 percent say that the severity of their condition is most important in impacting their decision to tolerate a higher co-pay. About 10 percent of patients, however, report that nothing would motivate them to remain on a higher-priced PPI, when lower-cost options are available.
Today, close to 90 percent of liMOs offer three-tier co-pays. With multi-tier plans now the norm, it’s critical for pharmaceutical companies to understand how a drug’s co-pay position - and its resulting cost to the patient - drives the ultimate prescribing choice.
Wipes and accessories revolutionizing household cleaning
Wipes have been the biggest force for growth in the household cleaning market in the last five years. According to "The U.S. Market for Household Cleaning Wipes and Accessories," a newly published Packaged Facts report available at MarketResearch.com, Americans spent over $872 million on wipes and accessories like mopping systems in 2002. Convenient cleaning products seem to be set to take over the entire industry, spurred by the demand among time-pressured Americans for quick ways to spiff up their houses.
The Clorox ReadyMop has set the benchmark for the explosive growth of the wipes and accessories market. Introduced in 2002, the ReadyMop came out as the best new performing non-food brand that year and earned over $200 million in sales. Product breakouts like this are rare, but given the overall popularity of wipes in the U.S. the staggering performance of the ReadyMop is put into context.
"The convenience of wipes has changed Americans’ concept of cleaning," says Don Montuori, acquisitions editor for Packaged Facts. "Mopping a floor is no longer a drawn out process that involves a bucket of increasingly dirty water. The new breed of mop and electrostatic broom mean consumers can clean a floor with a minimum of effort, making people likely to do so more frequently. The growth potential here is truly staggering and we’re predicting that this entire market could be worth close to $4 billion by 2007."
Yanks still most popular team
With the 2003 baseball season under way, a new Harris Poll finds that the New York Yankees are the nation’s most popular baseball team, followed by the Atlanta Braves. These two teams have a substantial lead over all other clubs, as they have done in every survey like this conducted by Rochester, N.Y.-based Harris Interactive since 1993.
Apart from the Yankees and the Braves, the next most popular teams are the New York Mets, the Cleveland Indians and the Minnesota Twins. Other teams which make it into the top 10 are, in descending order: the Boston Red Sox, the Chicago Cubs, the Los Angeles Dodgers, the San Francisco Giants and the Cincinnati Reds.
Along with the two Canadian teams (whose support is predictably low as the survey was limited to residents of the United States), the teams with the smallest numbers of fans are the Tampa Bay Devil Rays, the Chicago White Sox, the Kansas City Royals and the Florida Marlins.
This is the first time Harris Interactive has conducted this survey since 1999. The most dramatic change since then has been the rise of the New York Yankees and the decline of the Atlanta Braves. In every survey between 1993 and 1999, the Braves topped the Yankees, usually by quite a wide margin. This is the first of these polls to show the Yankees ahead.
Other notable changes since 1999 include:
- the New York Mets moving up from 12th place to third place;
- the Minnesota Twins rising from 11th to fifth place;
- the Chicago Cubs dropping from third to seventh place;
- the San Francisco Giants rising from 26th place to ninth place;
- the Baltimore Orioles falling from ninth place to 18th place.
It is noteworthy that winning the World Series or winning a pennant does not catapult teams to the top of the list, although it surely helps. Last year’s World champions, the Anaheim Angels, are only in 16th place, and the San Francisco Giants, the runners-up, and are in ninth place.
In addition to being attracted to champions, baseball fans seem to be drawn to specific players, and the players’ superstardom translates into support of entire teams. For example, St. Louis ranked higher when Mark McGwire was breaking the home run record, and San Francisco has moved up recently due to the unprecedented success of Barry Bonds.
Although the top two teams (the Atlanta Braves and the New York Yankees) both won the World Series in the ’90s, they also consistently field good teams, receive a lot more television exposure, and, most importantly, have huge stars and even bigger payrolls. The smaller cities with fewer stars, lower payrolls and less media exposure generally seem to rank lower in the poll, regardless of how they fare during the baseball season. Not surprisingly, seven of the top 10 most popular teams in this Harris Poll are also on the list of the top 10 highest payrolls.
These are the results of The Harris Poll, a nationwide survey of 943 adults who follow professional baseball. This sample is part of an overall nationwide cross section of 3,278 adults who were surveyed online between March 27 and 31, 2003.
High-tech companies jumping off branding bandwagon
A new study on worldwide strategic branding practices within high-technology firms finds that 60 percent of the companies surveyed have implemented long-term brand identity strategies, down significantly from a benchmark study conducted five years ago. The new study - a joint project by San Francisco-based research firm Socratic Technologies and Mexicobased brand marketing consultancy Nelson & Company - was initiated to determine what changes have occurred since their initial 1997 study and how high-technology companies now define and approach branding as a corporate initiative.
Nearly 1,100 technology marketers from around the world responded to the online study hosted by Internet sites frequented by high-technology decision-makers. "Our second wave of research clearly shows that fewer hightech firms in all major regions of the world are establishing long-term brand identity strategies," says Bill MacElroy, president, Socratic Technologies. "Further, it appears that a ’brand divide’ exists between small and large technology companies. While 84 percent of large tech companies have a long-term brand strategy in place, only 43 percent of small companies and 66 percent of medium-sized companies have a strategy in place. The ’brand divide’ seems consistent across most study measures."
More than half of all respondents defined brand primarily as "name, identity, logo, and recognition" while a much smaller number offered broader definitions of brand, which encompassed the entire customer experience.
A series of brand-building support responses help further define the ’brand divide.’ Nearly 80 percent of large companies support brand-building while just 61 percent of small companies do. Asked if they spend a lot on brand, 54 percent of large companies said yes while only 20 percent of small companies were in agreement. Nearly 70 percent of large companies but only 46 percent of small companies agreed that brand management is an essential practice. And, only 39 percent of small companies agreed that there is a brand culture at their company versus nearly 60 percent of large companies who agreed they have a brand culture.
"The fall-off in use of brand strategy and the significant divide between small and large companies may be linked in part to the continuing technology recession that places focus on survival for small companies and spending discretion for large companies,"says Bob Nelson, president, Nelson & Company. "Many technology companies may view branding as a luxury they can afford only during good times. We found that CEOs make nearly 60 percent of small-company brand decisions but only 38 percent of CEOs at large companies make brand decisions, delegating that responsibility to the vice president or director of marketing level. When asked, though, if senior management completely understands branding, only 22 percent of small companies and 40 percent of large companies said yes. The study may show that CEOs at small companies are concerned primarily with staying alive and do not understand or support brand. Small companies are much more likely to say their focus is elsewhere, they don’t have the money or resources, or they are too small or new to place any emphasis on branding," Nelson says.
Over 60 percent of all respondents said they do not measure branding ROI. That number increases to 73 percent for small companies but drops to 44 percent for large companies. An increase in sales was the principal metric for most companies followed by awareness. Small companies favored impact on sales and large companies used win!lost ratio and awareness as key metrics.
Other study findings affirm the apparent technology "brand divide." Small companies rely primarily on feature messages to communicate while large companies place emphasis on specific brand messages or a combination of messages. Small companies do not believe their brand is stronger than competitors while large companies reported that their brand is much stronger. Large companies also are predominately global in scope while small companies are principally local or national. Size and money and organizational structure were noted as key barriers to achieving global reach.