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Media feel pain-free despite drug dilemma

Over-the-counter competish hoping to seize opportunity

NEW YORK — Vioxx was pulled from the market. Celebrex pulled its advertising. Now Aleve, a popular over-the-counter painkiller, is coping with new questions about side effects.

But even as troubles beset three of big pharma’s biggest advertisers, the fallout for big media may not be as severe as initially feared.

Analysts say over-the-counter drug competitors are already looking to seize the opportunity, and drugmakers may end up spending more on advertising to better explain the risks.

“These two drugs, Celebrex and Vioxx, only make up 3% of total drug spending,” said Michael J. Wolf, head of the McKinsey & Co. media and entertainment practice. “The over-the-counter pain relievers are going to do aggressive marketing to make up the shortfall.”

Revenues ad up

Pharmaceutical companies spend $6.9 billion in the U.S. peddling prescription and nonprescription remedies, focusing their spending mostly on network, national cable and magazine advertising.

Pfizer spent $86 million marketing Celebrex last year; Merck spent $78 million to market Vioxx.

The three network newscasts derive nearly 30% of their ad revenue from the pharmaceutical industry, or about $110 million, according to TNS Media Intelligence/CMR.

Cable news channels derive about 15% of ad revenue from the drug companies, executives said. Big pharma has spent $1.67 billion in national magazines so far this year, up 2.6% from last year, according to the Publishers Information Bureau.

Weathering the storm

But forecasters aren’t adjusting their forecasts for the coming year, arguing the pharmaceutical industry’s perfect storm may end up a tempest in a teapot for national advertising. Indeed, some media may even benefit from increased spending.

“Until Celebrex is off the market, they may use advertising to alleviate the concerns,” said advertising analyst Jack Myers. “They may change the creative and return with a different message.”

Myers predicts network TV and magazine advertising will grow 4.0% in 2005 while national cable grows 9.2%.

Myers also said he expects pharmaceuticals to remain a huge category for the evening news as the population ages.

But network news analyst Andrew Tyndall said over-reliance on the drug companies may be alienating younger viewers who don’t yet suffer from excessive muscle pain, incontinence or impotence.

“These ads send a clear message to anyone under 50 that this program isn’t for you,” Tyndall said.

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