Over-the-counter (OTC) drugs may be some of the most visible products when it comes to TV and other mass-media ads. After all, who doesn’t regularly see advertising for common pain relievers, allergy medicines or weight-loss aids? But while most OTC drug marketers still sink most of their budgets in mass-media channels such as TV and print, direct marketing, particularly online, has become a very viable option as budgets slim down.
“We’re still seeing clients spend more than 90% of their budgets on TV,” says Mike Dennelly, director of digital marketing at agency G2, which works with several top OTC brands. “But the good news for direct marketers is that as TV becomes less and less effective in terms of getting people to go to the store and buy a product, targeted direct marketing is going to be increasing its share within our clients’ budgets.”
For most OTC drug marketers, this means growing an online presence. The shift from traditional mass media advertising to using the Internet certainly has been compelling, say experts, because of its efficiency and measurability.“Over-the-counter, like consumer packaged goods, has lower margins, low involvement, an infrequent purchase cycle and fierce competitive competition, especially among generics,” says Michael Maher, senior partner, director of client services at Greater Than One, which focuses heavily on the pharmaceutical vertical. “Thus, they are using online heavily because of its potential for ROI measurability.”
Online marketing allows companies to grow databases and track their data. “I think that the trend towards online marketing is continuing because it’s easier to target a specific market for a product,” says Larry Mickelberg, EVP of strategy and new business at Digitas Health. “You’re not paying for just reach, but you’re also buying actual customers.”
Essentially, when marketers are engaging OTC customers online and getting them to register, the customers are allowing companies to remarket to them in the future.
“The real value for an OTC drug with direct marketing is building a database,” says Dennelly. “The ability to reach people and have the permission to remarket to them is key.”
Direct marketing, whether it is a direct mail piece, an e-mail or a Web site, helps to establish and progress the relationship between the OTC brand and the customer.
“From customer acquisition all the way to loyalty, we’re doing programs to acquire people,” says Maher, adding that Greater Than One uses direct marketing tactics to improve targeting by finding cost-effective ways to get the right prospects to opt in to a client’s database.
“We’re using offers to try to get customers to [opt in], we’re using e-mail and various online tools including widgets or applications that customers can put in their mobile device, to engage them and keep them loyal,” he continues. “So, from acquisition to loyalty and even advocacy, we are using direct marketing every step of the way.”
Keeping customers informed with continued and progressive direct marketing helps establish a conversation between an OTC drug company and its customers. This is where integrated campaigns, combining both online and offline tactics, prove to be very useful.
“It’s really about [creating] a dynamic conversation with your customer,” says Susie Choi, SVP of client services, director at Wunderman. “We may have a direct mail piece that may refer to an upcoming e-mail or may refer a customer to our Web site. We have sent outbound communication that sets up a certain flow of communication between us and a consumer. We understand that it’s about a feedback loop and flow of conversation that ushers the consumer from one point of decision-making to the next.”
Often, she explains, marketers send the same message over and over again, which becomes the direct mail consumers throw away or the e-mail they don’t bother to read. “When a piece actually advances the conversation, that’s when you’re starting to get the consumer engaged with your product and you’re developing a relationship where they are giving you feedback as well,” she says.
Engaging customers and establishing a two-way conversation is a challenge in itself. OTC drug marketers, however, must face many other challenges when creating a campaign.
Generic OTC drugs, for example, force name brands to play the pricing game, but direct marketing can help.
“Through offers and promotions, direct marketing allows [a company] to play on that level and add value by giving away coupons before customers head into the store,” notes Dennelly. “This way, customers have something with your product name on it so they don’t look at the product next to it, which can be 60% of the cost, and go with that one.”
In addition, pharmacies and companies such as Wal-Mart have their own drug brands, which they are able to push heavily at the point of sale.
“That’s where direct marketing becomes very important,” continues Dennelly. “[A marketer] can influence customers decisions before they get to the aisle where Wal-Mart and Walgreens are promoting their own products.”
OTC drug marketers are also subject to exterior pressures from the rules and regulations of the FDA. Although regulations are not nearly as strict for OTC drugs as they are for their RX cousins, pressure still exists.
“Whereas prescription drugs have to balance between benefit and side effect information, OTC drugs do not have to deal with that,” says Mickelberg. “But, the FDA does watch closely to make sure that [OTCs] are not over-promising or over-promoting.
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