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What's the average ad budget when introducing a new product?
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While the required ad budget for a new product will vary considerably from one therapeutic class
to another, the physician audience (core versus specialists) is the major factor that should influence
the print spend level.
Ads for new products, new indications and new information are more quickly recognized than ads for more
established products. This is true within both the primary care (core) markets as well as the specialty
markets. New product interest and promotion coordination probably play important roles in creating
attention to these new campaigns. Companies need to take advantage of this unusual interest especially
since many have found that impressions formed in the first six months are critical. Importantly, they
need to incorporate words like "new," "unique" and "only" in headlines to attract attention.
In the summary chart shown below, we see that within the Primary Care Market, the average print
budget ($3,544,000) for the 111 new products that were studied resulted in an ad recognition score (norm)
of 64%, while the product recall norm was 53%. While the average ad spend within the Specialty Market
category for new products (54) was significantly less ($388,000), ad recognition (71%) and product recall
(58%) were considerably higher. Since the journal target audience for a Specialty Market, such as
dermatology or oncology, is much smaller than that of a Primary Care Market, like arthritis or analgesics,
the lower ad expenditure needed to reach the Specialty Market is not surprising.
It is important to note that the average budgets presented for new products in either the primary care
or specialty markets are not necessarily the estimates that one should follow. To achieve acceptable
ad recognition and product recall figures, and to maximize profits, some markets require expenditures
that are significantly higher than the averages…some can get by with less.
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Click for a larger image
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Do's and Don'ts
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Do's
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Take advantage of the high degree of interest usually associated with a new product introduction.
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Incorporate words like "new," "unique" and "only" in the headline of promotional material.
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Make sure that you have correctly identified your target audience.
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Recognize that for a given spend level, there are differences in ad recognition and product recall from one drug class to another.
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Plan for the proper balance between detailing and support promotion so that the effectiveness of detailing is matched by the efficiency of advertising in leveraging the detailing effort.
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Design a media schedule that places ads where they get the greatest exposure. Greater frequency in lead journals is more important than schedule depth, once reach and frequency goals reach diminishing returns.
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Dont's
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Don't underfund an ad campaign by stringing it out so that spend levels are below monthly thresholds.
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