Why Does Pharma Lag In Programmatic?

Why hasn’t pharma fully embraced the programmatic revolution?

Programmatic buying can realize terrific efficiencies in digital media buying, particularly when advertisers need to scale contextual ad buys or in buying large quantities of display ad tonnage.  So why aren’t pharmaceutical marketers on board with it?

Innovation can be challenging in regulated sectors, usually because companies operating in those sectors aren’t always comfortable being the first to try a new communications technology.  Let’s face it, being the guinea pig can be expensive, but it can also be risky and potentially attract the ire of regulators.  Those same regulators aren’t always forthcoming with guidance on how to approach the latest technology innovations in the ad industry, so it’s no surprise that companies in these industries can become somewhat risk-averse when it comes to trying new things.

Pharma has its own set of objections to programmatic, which we must address if we are to be able to use it in our quiver of potential approaches to solving challenges.  Here they are:

Control Issues

A pharmaceutical company is used to having total control over its marketing messages, but it goes so much further than that.  Some control must also be exercised over the environment in which a branded pharma ad appears, as well.  Branded sponsorships and ad placements are reviewed by a pharma company’s legal team, and for good reason.  A branded ad appearing next to an article about new therapies for a condition might imply some sort of endorsement of the therapies discussed.  This can have ramifications for the company if a patient got the wrong idea.  Other objections can arise from advertising in areas where free-form responses are solicited (forums, comments, etc.) because U.S. pharma companies have an obligation to report any adverse events that are reported to it.  Can you imagine what would happen if an ad appeared in a forum someplace, someone noticed it and said “Oh, hey – I was on that medication and it gave me a terrible headache” and it went unnoticed by the brand?  Some might argue that the sponsorship would obligate the brand to monitor and report on these adverse events, and pharma companies would rather not have an ad campaign open them up to risks in this regard.

It’s for these reasons that legal reviews aim to have the most comprehensive overview of digital ads and the contexts in which they could appear.  Even with tight controls over environment using whitelists, it becomes difficult and time-consuming to try to spot potential pitfalls in campaigns seeking approval.  Programmatic companies need to help solve for these issues concerning environment – even brand safety technologies may not be enough to put concerns at bay.

Targeting Issues

Branded campaigns also have challenges when it comes to ad targeting.  When you’re talking about launching a broad-scale TV campaign that reaches a majority of U.S. households, concerns about how you’re reaching potential patients are minimal.  Could we say the same for targeted digital advertising?

Most agencies and publishers advise their pharma clients to take a measured approach to patient targeting.  Many publishers in the health category build their content in such a way as to present advertising opportunities for drug makers to reach anyone seeking information on a particular condition.  Context drives these ad opportunities, and not data.  Where does that leave programmatic, which – by and large- has thumbed its nose at simple contextual targeting and tends to favor data-driven methods?

Process and Transparency Issues

Pharma companies and their marketing departments are usually big on process.  Even if they don’t directly participate in something their agency or another marketing partner is doing on their behalf, they want to know what’s going on behind the scenes.

That can be problematic in a programmatic ad market where technologies tend to differentiate themselves from competitors through methods that are black box in nature.  What a DSP or a trading desk might consider “Secret Sauce” can be personally exciting to pharma marketers, but might ultimately be the reason that programmatic company isn’t getting business from the pharma company.  The move toward programmatic transparency is a good one that helps address concerns, but it may present its own set of issues, particularly if potential partners are undifferentiated as a result of having to open the kimono.

Tom Hespos is the Founder and Chief Media Officer of Underscore Marketing, an integrated media agency focusing on health and healthy brands.