Up to 20% of pharma brands moving digital media spend to point-of-care

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Between 10% to 20% of pharmaceutical brands are shifting their spending away from digital media to digital point-of-care hosted by doctor's offices or hospitals, according to a new analysis conducted by ZS Associates.

ZS surveyed brand marketers, point-of-care companies, media buyers, and other industry experts, who reported that this trend toward point-of-care has been taking place over the last two years.

The drug industry's spending on digital ads was was flat in 2016, at $515 million, according to Kantar Media, even though total direct-to-consumer spending rose 4.6% to $5.8 billion in 2016. And so this reported shift in digital ad spending may be one reason why investors have suddenly become so interested in the point-of-care market.

See also: Infographic: What's next for the point of care market

PatientPoint received $140 million in funding in June, one month after Outcome Health announced a $500 million capital infusion. Earlier this year, Time Inc., publisher of stalwart consumer titles like Fortune and Time, launched its own point-of-care magazine under the Time brand. (WebMD later filed a lawsuit alleging that a sales executive for its own point-of-care magazine took trade secrets with her to Time.)

Publishers have long provided magazines, brochures, and other materials supported by pharmaceutical ads in waiting rooms and exam rooms at doctors' offices. An estimated $500 million to $600 million is spent each year on this kind of marketing.

The point-of-care market has an estimated compounded annual growth rate of 10%. That rate, according to ZS, will likely rise to 15%, creating a potential $850 million market by 2020.

See also: Pharma's $6 billion annual ad spend targeted by media publishers

But now Outcome Health, an industry darling with startup savvy, is facing allegations that some employees inflated the results of marketing campaigns and shared that information with drugmakers that advertise with the company.

The Wall Street Journal first reported the news on October 13. It cited unnamed sources, including advertisers and former employees, who claimed that three executives have been placed on paid leave as a result of the allegations. The employees reportedly told advertisers that ads had run on screens that didn't exist in some doctors' offices. In addition, some employees allegedly padded data about campaign performance.

According to a statement from Outcome Health, the alleged incidents occurred between 2014 and 2016. “The company also strongly denies having a practice of misreporting campaign information to customers,” it said.

The Journal's investigation was published at a time when the effectiveness of digital ads across all industries is in question and has prompted marketers like Procter & Gamble to rethink some of that spending. One reason why drugmakers may be shifting their digital spending to point-of-care is the tactic's perceived effectiveness.

See also: Outcome Health raises $500 million in financing round

A recent study, conducted by Kantar Media for the Point of Care Communication Council, found that 31% of patients are more willing to fill a prescription after seeing healthcare advertising in the doctor's office, while 84% are more likely to discuss an ad with a doctor. 

Such data is considered the holy grail for pharmaceutical marketers trying to devise new ways to sell products at a time of intense payer scrutiny and increasingly limited HCP access for pharmaceutical sales representatives.

“There's nothing like Seinfeld anymore, so TV doesn't work. It just makes more sense for a brand such as Viagra to focus on urologists' offices than ads during NFL broadcasts,” Alicesa Vongluekiat, Health Media's SVP of marketing, told MM&M in September. “Online advertising is problematic. With ad bots and fraud, you sometimes don't even know who's clicking on ads.”

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