Does Traditional Media Advertising Impact Consumer Sentiment in New Media?
Advertising spending is experiencing a sharp decline, most likely the largest in history. However, despite the economic recession, pharmaceutical marketers increased their DTC investment. In fact, DTC advertising expenditures increased 1.9% to $4.51 billion in 2009. Television spend was up 0.6% to nearly $3 billion, while radio advertising spend exhibited the greatest increase, rising 112% to $46.3 million. Online advertising generated strong growth – increasing 30.8% to $117.4 million. (Source: Direct-to-Consumer Advertising: Review and Outlook 2010, Canon Communications Pharmaceutical Media Group)
The top six brands cumulatively spent more than $100 million in TV advertising last year, led by the cholesterol drug Lipitor. The second highest was the erectile dysfunction drug Cialis, followed by Abilify, an add-on treatment for depression, and Cymbalta, a drug for major depression disorder.
However, an interesting report from Nielsen IAG recently surfaced demonstrating that drugs with the largest DTC TV ad budgets in 2009 did not have the highest level of brand associated recall when surveyed about ads they were confirmed seeing. Essentially, “the results indicate several brands are not getting their money‘s worth” (Stern, http://www.allvoices.com/).
These brands consistently had heavy TV advertising in 2008 as well, with 2009 only having a marginal increase in spending, Nielsen reports. Harris Interactive reports that pharmaceutical DTC advertising also has low trust among Americans – only one-in-five consumers trust the claims supported by pharmaceutical advertising.
Despite the differentiation in DTC advertising expenditures, recall, and lower levels of consumer trust compared to other categories, a slightly different story is illustrated on the social web. HCD Research has collected data on various pharmaceutical brands spanning the past 3-4 years throughout various social networks, blogs, micro-blogs (e.g. Twitter), forums, and news sites. The data was collected to understand the volume and context of brand mentions across the social web. Using indexing algorithms and natural language processing, we classified brand mentions into positive, negative and neutral, and plotted the results on a weekly basis. Week on week, the results were indexed to 100 and compared.
Interestingly, brands that had the largest number of GRPs consistently flighted over a two-year period showed the strongest positive growth in the number of positive mentions. While these brands are not recalled as much as the smaller ad spenders, the results suggest that there is a positive correlation between the social web and TV DTC advertising (while controlling for other media expenditures). For the most part, the variability in the data is associated with news events. However, a 3-week rolling average was created to smooth the results for the purposes of this analysis.
Figure 1: Example brands Abilify and Crestor. An index of number of positive mentions (across all pharmaceutical brands measures) is plotted over time. Strong statistical relationships are seen for brands that have continuous national TV GRPs, with R-square values of 0.85 and 0.84 for Abilify and Crestor, respectively.
While the effects of DTC TV advertising have a strong correlation with the number of positive social mentions, there are also statistical relationships that are seen with lower DTC advertising spending brands, however, these relationships tend to be weaker.
Figure 2: The examples of the brands are Flomax and Gardasil. These brands ranked in the top three in terms of the Nielsen recall index; however, the social media index overall is smaller. In addition, weaker statistical relationships are seen for these brands, with R-square values of 0.42 and 0.54 for Flomax and Gardasil, respectively.
While there may be other factors that explain the correlations that are not considered in this analysis, these results suggest that TV advertising has a longer-term positive return on the context in which people talk about a brand on the social web. Further exploratory research on the reach of each social medium, the viral nature of these mentions, as well as introducing other exogenous variables can help build the case for how TV advertising yields an effective payout on earned media. Presumably, as more consumers and professionals use social media as a trusted source of information, this data can be applied to media mix models to better inform longer-term contribution to ROI.