Pharma Spending moves slowly toward Digital.

The pharmaceutical industry is one of the largest US advertisers. Despite shifting regulatory hurdles and economic malaise, direct-to-consumer (DTC) ad spending on prescription drugs increased in 2009, largely on the strength of blockbuster brand promotion in traditional mass-market media.

“The internet is helping 175 million US healthcare consumers become more involved in managing their health,” said Victoria Petrock, author of the new report “DTC Pharmaceutical Marketing Online: A Slow Shift to Digital.” “Yet even as the largest companies and brands improve their internet marketing savvy and launch integrated online programs, internet pharmaceutical activity remains a small component of total US online ad spend.”

eMarketer estimates online healthcare and pharmaceutical advertising, including DTC and over-the-counter remedies, will reach $1 billion this year but account for only about 4% of total US online ad spending through 2014 in spite of relatively robust annual growth rates.

The economic downturn in 2009 and a shift to lower-cost digital media alternatives contributed to a 3.4% decline in last year’s online spending, according to eMarketer estimates. The drop was also fueled by the uncertain regulatory environment.

“There was a significant falloff in DTC search marketing last year after the FDA issued 14 warning letters to several pharmaceutical manufacturers,” said Petrock. “The effect of the FDA’s letters was dramatic.”

comScore reported that from March 26—when the FDA issued its letters—through June 2009 paid search ads by pharma firms fell 84%.

After the fallout from the FDA episode, search spending eventually resumed, according to comScore and other sources. However, it was not enough to head off an overall decline in online healthcare and pharmaceutical spending in 2009.

“Though the marketing mix is slowly shifting toward digital tactics, DTC advertising will remain rooted in traditional media over the next several years,” said Petrock. “Clearer guidelines from the FDA and new technology and measurement tools will move more spending online, but online tactics must also be able to prove their worth.”

For more information at http://www.www.emarketer.com