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Issue of Doing Business in a Regulated Environment Growing?

April 7, 2009

I read an interesting note from my colleagues at Edelman’s healthcare practice today. Last week the US Federal Drug Administration issued 14 warning letters about digital advertising by healthcare companies, specifically paid keyword advertising (the text ads that come up in search results, often knows as ”sponsored links’).

All the warnings were consistent with one of the golden rules of pharma marketing: if you make a claim, even if it’s just the brand name and the indication, you must include fair balance. The companies receiving the warning letters last week were running text ads for their products without providing risk information.

Trends in FDA enforcement of Regulation regarding Direct-to-consumer Advertising, 1997-2006 (from NEJM 357;7 August 16, 2007)

Trends in FDA enforcement of Regulation regarding Direct-to-consumer Advertising, 1997-2006 (from NEJM 357;7 August 16, 2007)

While you could click on the sponsored link and find the balanced info, there isn’t space allowable within search advert itself (approx 140 characters) to include the fair balance. In the absence of concrete guidelines, the marketers probably assumed having the risk information one-click-away was sufficient. We now know that’s not how the FDA sees it.

However, there remains a lot of gray areas, which marketers love to explore and test the bounds of. For example, can you buy the keyword “lung cancer” and run a reminder ad for a relevant product? With the risk-aversion that lack of clarity around guidelines brings, you either end up with marketers who do nothing or a move to promoting ‘unbranded’ properties to avoid confusion, or potential censure?

Regulations on business/industry marketing are a touchy topic in Asia (more on that in a follow-up post). The FDA letters may get healthcare marketers to rethink what words they buy for search marketing, especially if their web assets/brand are already high on organic search?

This is where firms that come to search and optimisation with a focus on audience, issues and conditions – as opposed to brand and category – have a real opportunity to stand apart. This is one of the reasons I did my Google Advertising Professional qualification at the end of last year.

I believe that for the foreseeable future, rather than trying to take regulations to marketing across Asia head-on, companies will seek more creative, yet still compliant (in ethics and execution) ways to market – especially via online channels, where the regulations are applied in a much lumpier way.

I predict there will be a lot of developments and pushing the bounds in this area, both globally and in Asia. I think it will be fascinating – watch this space.

HT again to my colleagues at Edelman Healthcare for sharing this key development.

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