Lessons from the Left Coast: What Hollywood Can Teach Pharma about Marketing

—Maureen Winigrad, VP, Marketing & Strategy

Blockbuster-envy, high-development costs, sequels, the profitability of independent films–when marketers begin comparing pharma with Hollywood, the similarities keep coming. So what can our industry learn from Hollywood? The answer is a lot.

It is difficult to come up with two industries that have a higher public profile than pharmaceuticals and film, and the similarities between them have been hiding in plain sight for most of us. One person making the connection is Art De Vany, Ph.D., professor emeritus of economics and mathematical behavioral sciences at the University of California. Dr. De Vany sees similarities in the financial models of both industries, citing high upfront costs, deferred income, low marginal cost, and a reliance on innovation–with the corresponding phenomena of copycats in both industries. (Please see the table below that shows the similarities unearthed by Dr. De Vany.)

The “Studio Brand”– Nice to Have But Not a Prerequisite for Success
Knowing that Disney or Dreamworks is behind a film is enough to draw a certain, not-insubstantial number of filmgoers that associate specific studios with the type of film experiences they enjoy. This clearly provides an advantage for major studios whose brands are widely established. In the pharmaceutical industry, the role of the “major studios” is played by giants such as Merck, GlaxoSmithKline, and Pfizer. Their corporate brands, already firmly in place in the minds of physicians and consumers, are constantly reinforced with image advertising that paves the way for acceptance of the companies’ new products.

Although the big pharma companies enjoy clout similar to big Hollywood studios, emerging pharmas, including midsize companies and small biotechs, are not necessarily at a disadvantage. They are the “independent studios” of our industry and, like indie filmmakers, they can be nimble enough to capitalize on new technologies and viral marketing to build trust and generate pre-FDA approval interest for their brands.

Getting Ready for “Opening Weekend”
No industry has been better able to capitalize on not having a product ready for market than the movie industry. Hollywood marketers know they must start promoting their products well before even one frame is shot. If they do their work right, they create demand powerful enough to fuel an opening-weekend take that can top $100 million.

Drugs and the movies have predictable, marketing-driven development, launch and post-launch lifecycles, and early-stage marketing is particularly important in both industries. The giants of the film industry understand that they can’t wait for the finished product before they begin prerelease market activities, and their budgets reflect that thinking. But independent filmmakers have, by necessity, blazed a different trail–using innovative and inexpensive viral marketing techniques to turn low-budget films such as The Blair Witch Project, produced for about $60,000, into box-office gold, which in this case equates to worldwide revenue of more than $248.6 million**.

Building Buzz
Prerelease activities for films include audience testing, previews, the launch of one or more Websites associated with the film, promotion and advertising in trade magazines, the placement of interviews with the director and stars in print and on TV, and so on. These all add up to the movie’s title (its “brand”) becoming part of the public consciousness long before any member of the public has seen the film.

While the pharmaceutical industry is much more restricted than the film industry in the amount of prerelease marketing buzz it can generate on behalf of its products, there are critical early steps that can be taken to ensure that we, and the market we want to serve, are ready. Probably most important is using market research to understand our customers’ needs, behaviors, and attitudes. This is an essential step to ensure that a brand will resonate with audiences and increase the likelihood of launch success.

This past summer we expected, but still marveled at, the incredible box-office takes of the third Pirates of the Caribbean ($956.6 million**) and Spider-Man 3 ($885.4 million**). But recently we saw the indie dark-comedy Little Miss Sunshine take in a not-too-shabby $96.0 million** (and still cranking)–proving it doesn’t take Capt. Jack Sparrow or Spidey to fill seats.

No matter how entertaining those films are, their success was boosted with some serious pre-release marketing muscle. And, no matter how effective a new drug is, it will have better likelihood of achieving brand greatness if the market is well-prepared to welcome it.

Life-Cycle Similarities: Hollywood vs. Pharma
Blockbuster envy
High development and production costs
Deferred income
Low marginal cost

Hollywood Movies
Audience research
Studio brand
Preproduction
Audience testing
Movie websites
Premiere
Opening weekend
Independent studios
Critics
MPAA ratings board
Titanic (total worldwide box office of $1.8 billion)**

Hollywood Movies
Market research
Corporate brand
Clinical Trials
Market research
Product website
Launch meeting
Launch date
Small and midsize pharmas, biotechs
Key opinion leaders
FDA
Lipitor  ($13 billion in worldwide annual sales)*

**Source: worldwideboxoffice.com; * Source: healthcare.seekingalpha.com/article/30382

 

Original publication date: September, 2007; VIEW on Marketing
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