Big Pharma: Modern Robber Barons
• Roughly 8 percent of the U.S. population has diabetes or only 80 out of the thousand viewers you bought and paid for. Money is being wasted on advertising to 920 non-diabetics.
• Let’s say 20 percent—or 16 of the remaining 80 prospects—surf away during the commercials, and 16 more go to the john or the kitchen. That leaves you with 48 of your original 80.
• Finally, let’s say that 5 percent—or 4 more—have DVR’d the show and will fast-forward through the commercials at a later time, while another 4 are very happy with their diabetes medicine and have hit the mute button so that they can yak in peace with others in the room.
In actuality you are reaching just 40 prospects—not the thousand promised by that glib ad salesperson from the network.
Your actual cost per qualified prospect is not $25/M, but more like $25/40 or 62.5¢ each ($625/M)—which is precisely the cost of a direct mail package—a far more efficient and cost-effective medium to tell this kind of story.
(Check out the takeaways to see 8 advantages of direct mail over TV.)
Quite simply, the drug makers are so rich they don’t need to play by the rules of advertising or the rules of anything else. And their lazy agencies happily book the same commercials in the same time slots night after night and collect their fat 15 percent commissions.
Is It Fair to Equate Big Pharma to the 19th Century Robber Barons?
I have been downloading stories about the drug business for the last five years and have been stunned to discover that this is an industry of rapscallions, reprobates, rogues, scallywags, scamps, scoundrels, thieves and thugs. Below are the fines and settlements paid out during that time by Big Pharma for its misbehavior: