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This article originally appeared in the August 11, 2006 issue of DTC Perspectives, an e-newsletter from DTC Perpsectives, Inc. REPRODUCED WITH PERMISSION.

Waste in DTC Advertising

By Bob Ehrlich, Chairman, DTC Perspectives, Inc.

A new book will be coming out in September that is based on a five-year study of ad spending. It concludes that 37% of ad spending is wasted. That is not a surprise since the ad industry maxim is that 50% is wasted, we just do not know which half. The authors of What Sticks, Rex Briggs and Greg Stuart, are very pragmatic in outlining how that waste can be reduced, not to zero, but much better than 37%. We were impressed enough with their advice to have Rex Briggs speak at our upcoming October DTC conference. In fact one of the 30 cases they studied was for Nexium, a leading DTC spender.

Basically, Briggs and Stuart call for a much more comprehensive involvement from the client side in setting advertising objectives and creating action standard measurements for each media program. I have consulted with numerous pharmaceutical companies and have found the objective setting process weak in many cases. Most have overall ROI objectives, but few have the detailed sub-objectives for each type of media used. Clients and agencies need to spend a lot more time upfront on what each part of the media mix will accomplish, not just in GRP or impression terms but strategically. Once the strategies are firmly debated and agreed to, then a quantitative success measure for each media element should be set.

I have frequently written that most media plans are too television heavy and that at least 10% should be redirected to direct/Internet/point of care or other media. Briggs may say even more should be redirected. My point here is that the average big brand is wasting millions and that the traditional media process is broken and needs fixing. Why is there a problem in setting objectives and measurement? It is largely because none of us really want to firmly set measurable objectives. We all like to believe that we are successful, and therefore, we like wiggle room in evaluating results. No agency will ever agree that they aired a bad commercial, yet we all can cite bad ads. No client wants to say that their DTC program failed, yet we know many have negative ROI. Human nature, therefore, is the biggest reason we have waste. Not only can setting firm objectives and accountable action standards reduce wiggle room, they can also create organizational tension. The specific measurements will show some departments are better than others. In most big companies it is better to get along than create clear accountability that might make some departments look bad. Hopefully, this new book, What Sticks, will inspire both clients and agencies to create some new processes for advertising and media planning. Clearly it is needed, and a little organizational tension is probably a good thing.

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