My predictions for 2010 (as published in PM360)
1). Pharmaceutical clients will increasingly scrutinize and question how much of their advertising money is flowing through agency-owned ad networks or ad exchanges. As the lines of media buying and selling continue to blur, clients will become increasingly concerned about the objectivity of their agencies, and rightfully so. The area of most concern is where agencies are spending the clients’ dollars with media properties, ad networks, or ad exchanges which are owned by their own parent ad agency.
2). While the clouds of recession will continue to part and the sun will slowly get increasingly brighter, 2010 will continue to see economic darwinism at its finest. Many unhealthy businesses that were hanging on through 2009 in hopes of a rebounding economy will capitulate to the inevitable forces of insolvency. A bad or outdated business model will not rebound even when the economy does. Expect further layoffs, bankruptcies, and shot-gun mergers as a result.
3.) The battle between Apple and Google will intensify as Apple launches its tablet and the arms race for quality and quantity “Apps” accelerates. In the pharmaceutical market, this will be very evident, and disruptive to the incumbents, in the race to capture physician attention on point-of-care devices.
4.) Google will not sit on its laurels in the mobile market, but rather will continue to attack Apple and other mobile players. Google will fight for market domination of its Android mobile operating system with the vigor and intensity it previously reserved only for the search market. By shedding itself of non-core businesses, or at least reducing their focus and priority on them, Google will continue to gain market share in mobile and may even surpass Apple in this market in 2010.
5.) The weaker medical journals will continue to shut down due to decreasing advertising revenue, while the stronger publications will benefit from a less-saturated market. Look for strengthening of the market-leading titles and an expansion of their businesses into other media channels. The weed-out process was and will continue to be painful, but in the long-term it is healthy capitalism at work. The market had too many print journals chasing too few physicians and a decreasing pool of print advertising dollars. We are returning to a degree of normalcy and the strong will get stronger.
6.) It is very likely that just under the wire before year-end 2010, the FDA will release long overdue guidelines for online advertising with a focus on pharma interactions with both search and user-generated content. The guidelines will probably not be earth shattering, as the FDA has and will continue to seek feedback in the form of public comments. Expectations of what will be covered and included in the guidelines will be covered widely by the media and blogosphere, making the guidelines themselves anti-climatic. However, the formalization of guidelines may be just the assurance the industry needs in order for pharma’s online spending to reach parity with other industries’ at greater than 10% of marketing budgets going to online initiatives. Of course I’ve been predicting pharma would spend 10% of its budget online since 2007, so take this prediction with a grain of salt.
7.) The Democrats will pass healthcare reform in 2010 in a form close to today’s pending legislation, though probably slightly watered down. The changes will be substantial and far-reaching, but will not be earth-shattering for pharma. In some respects, particularly the requirement for far more Americans to secure health insurance, reform may be a boost for business. Rest assured that, in any form, reform will come with higher taxes across the board. Insurance companies, employers and consumers may be most at risk as new regulation may recognize portions of health insurance as a taxable benefit.
8). Congress may debate and even act on taking a tougher stance on privacy laws as they pertain to online advertising and behavioral targeting (the act of targeting someone based on prior behaviors such as visiting a diabetes site, and then following them around the web with a diabetes advertisement) in particular. This may include a requirement for a consumer to opt-in to such targeting as opposed to offering consumers the ability to opt-out. It is not too late for industry to self-regulate on these matters, and the IAB (Internet Advertising Bureau) is making a concerted effort towards educating the public and coordinating the web publishing community. I hope I’m wrong on this one, but legislation may be inevitable.
9.) The “great shift” of media dollars from offline toward online will continue in 2010. Total pharmaceutical marketing expenditure may grow only nominally or even shrink in 2010, however, online will continue to take marketshare from off-line vehichles for the foreseeable future. This great shift is driven by the accountability and measurability of online programs.
10.) With the proliferation of mobile and continuously improving targeting techniques, 2010 may be the year where interactive media emerges as a significant compliance and adherence tool for pharma. Beyond just a branding and performance-based media channel, the interactive promise of real-time notifications, prescription reminders, refill reminders, side-effect safety profiles delivered on a timely basis, etc… is here for pharmaceutical companies eager to take advantage of it.