Newspaper's nosedive not a surprise

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For the first three quarters of 2007, pharmaceutical firms' spending on newspaper advertising plummeted, to $57 million from $84 million for the same period in 2006. Why is newspaper spend drying up?

Stu Klein

EVP, general manager,

Alchemy

The decline in newspaper spend in 2007, on the surface, appears to mirror both the decline in DTC spending (especially in Q3) and the decline in ad revenue being suffered across the newspaper industry.  Within DTC, as brands' strategies evolve year-to-year, the decision to incorporate newspaper media is driven by the immediacy of the medium.  If a brand has urgent news, there are few media that can disseminate the message more rapidly than newspapers; if a brand's strategy is focused on brand-building, then papers are typically inefficient for this purpose, as sustainability of the message is difficult to achieve in this medium. Ironically, of the major ad spending industries, pharma, with its traditional target of 50+, is the one industry where newspapers should be performing strongly, as this demographic is one of the few that still relies on newspapers for their daily source of news.


 

Meg Walsh

Managing partner, president of consumer and e-business, 

CommonHealth 

Historically, pharma has used newspapers to deliver corporate messages and brand news to the public, Wall Street and thought leaders, since they reach a mass audience and have short lead times. However, only 3% of DTC spending was doled out for newspaper advertising. In 2007, we saw a massive overall decline in newsworthy brand dissemination and corporate advertising spending.  We've found that as consumers increasingly personalize their information needs, using RSS feeds and customized news pages like iGoogle, both newspapers and the pharma industry will need to adapt to this evolving news-gathering environment and find innovative ways to get the messages out.


 

Anne Devereux

CEO, LyonHeart,

CEO, TBWA World Health

While newspaper spend may have declined by a third, parallel expenditures in the online space escalated at an even higher rate. This trade-off makes complete sense: Print as a DTC media vehicle was historically intended to provide a greater depth of information than TV and to ensure that the complex information could be processed and understood. Recently, as consumer trust of online information has increased, Americans now turn to the internet as their primary source for health information, and use the internet in the same way that they used to use print. Further, newspaper as a specific vehicle was historically used as an indirect way to reach investors. With scrutiny on DTC ROI (ensuring every insertion drives acquisition or retention) those investment-related strategies are being abandoned for lower cost/higher return media options.


 

Jason E. Klein

President and CEO,

Newspaper National Network LP

Pharmaceutical spending in newspapers has had extremely wide swings in the past few years.   Spending peaked in 2006 at $120 million with a 15% gain, plus we have seen gains again in 2008 led by the cholesterol category.  No other medium can provide the quick turnaround and broad reach and impact of newspapers, particularly given the hurdles in producing a television commercial.  Campaigns have often been fairly substantial covering the top 25 to 40 markets with multiple insertions. In the fourth quarter of 2006 five brands—Bristol-Myers Squibb/Otsuka America's Abilify, GlaxoSmithKline's Advair, Merck's Propecia and Pfizer's Viagra and Lipitor—spent almost $60 million per TNS Media Intelligence.

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