Will walkout scuff TV ad spending?
Pharma companies that advertise on TV have an eye on the writers' strike, which has hampered Hollywood's ability to churn out new shows and may have accelerated the ratings slide. How has the walkout affected pharma advertising?
Forecasters will probably not rely on historical trends to
determine the current strike's impact on pharma advertising. Any effect of the
last strike in 1998 appeared muted within the pharmaceutical industry by the
boon in DTC advertising at that point due to relaxed FDA guidelines. Looking
forward, it is likely that larger pharmaceutical brands targeting mass
audiences will be more affected by resulting declines in viewership, as noticed
recently among late night talk shows, than brands targeting niche audiences
where DTC promotion is not a primary strategy. Brands that decide to take
action will probably maintain their overall media strategy as opposed to
shifting or adding resources to other forms of promotion like professional
media. Brands may explore more effective media within DTC not as impacted by
the writer's strike such as print, Internet and, to a lesser degree, cable.
VP, associate media director
There's a perfect storm brewing in the network TV
marketplace. With the new C3 ratings, writers' strike and demand still surging,
advertisers are waiting to see what's going to give. In the short term, clients
will stay the course, even if it means higher scatter prices. There's enough
mid-season replacements, already-written series and reality programming to
sustain the market for a while. Advertisers must be more flexible in where they
run and in what programs. If the strike persists, the upfronts will come under
the most scrutiny: Will marketers and buyers accept purchasing ratings without
knowing the shows? Will there even be ratings to buy in Q4, and at what price?
These questions will force a re-examination of the media mix, shifting more to
media where there's a comfort level.
VP, account director
The ratings slide stemming from the move to a C3 metric and from the writers' strike is definitely a concern, for several reasons:
• not receiving the impressions paid for when they are planned to run;
• not receiving impressions in the same quality of programming that was negotiated; and
• skyrocketing cost premiums being charged for remaining inventory.
These concerns are not unique to pharma advertising, and the
decisions they lead to depend on each individual brand's situation. What is
universal, however, is the constant monitoring and continued discussions on the
value of television advertising and whether there are other, better
alternatives for future media dollars. Ultimately, the writers' strike may further
accelerate the shift of advertising dollars to alternative media.
The TV networks are not folding up their tents due to the strike. They are adding a lot of non-scripted shows to their schedules. Ratings have already been sliding, and most of these shows do not have the broad appeal that many pharma brands need to cover their targets. For marketers who rely heavily on TV, reduced ratings means buying more units to achieve the planned GRP levels. This drives up costs, because the market is priced on supply and demand. Pay attention to opportunities on cable and syndication to provide broader targeting, and fringe programming in the mornings and late night can broaden reach. This is a wake-up call that alternative approaches, including place-based and online video, must be considered and tested for the future.