Direct-to-Consumer Advertising

In the past few years, the medical device industry has seen a surge in increased direct-to-consumer (DTC) marketing efforts. Partially spurred by the observation that direct-to-consumer advertising has been quite effective and lucrative for the pharmaceutical industry, device companies are now trying their hand at this marketing approach.  By the same token, the device industry is forewarned by the regulatory red flags that have been raised because of some pharmaceutical companies’ direct-to-consumer tactics.

Though there has been a noticeable increase in direct-to-consumer device advertising, only 27% of companies examined in this study have engaged in DTC advertising. Of these respondents, annual direct-to-consumer expenditures ranged from $2.5 million to $100,000. As Figure 2.5 illustrates (figure is available in accompanying download), the remaining 73% of companies do not use DTC campaigns in their marketing efforts. There are a number of reasons why this figure remains high. For one, it is not advantageous for many devices to be advertised directly to consumers; however, some devices, such as hearing aids, lend themselves more to consumer advertising. Another issue that hampers the wide application of DTC advertising is the limited marketing budgets that many devices are working with in the first place.

Overall, the medical device industry has seen a significant increase in consumer advertising. Some industry estimates note that direct-to-consumer advertising spending grew from almost nothing in 1996 to upwards of $50 million in 2005. This increase is significant, especially since device companies have typically invested most of their advertising dollars – approximately $1.5 billion annually – in advertising in specialized trade journals that reach physicians and other healthcare specialists.