February 14, 2024

How the New Media Landscape Is Rendering Traditional Media Agencies Obsolete

remote pointed at a TV

For pharmaceutical companies, especially those launching new blockbuster products, conventional wisdom has always dictated that DTC (linear) TV be part of the promotional mix. Dating back to 1997, when the FDA relaxed the guidance on consumer-centric promotional advertising, pharma has romanticized linear television, and rightfully so as it produced results. Just think back to all those award shows, live sporting events and TGIF episodes that you tuned-in to over the years, with pharma ads dominating the ad breaks.

Now, however, the tide has shifted. Less than half of the country still maintains a linear TV subscription, and it’s predicted, only 25% will be linear TV subscribers by 2025. Pharma has slowly but surely shifted their media plans accordingly, redirecting linear funds to streaming.

But it’s not that cut and dry as the streaming landscape is incredibly frothy at the moment. The streaming business model is not a proven one, and aside from Netflix, streamers are struggling to grow subscribers and prove they can be profitable, while at the same time developing, licensing, or buying content that is getting increasingly expensive to produce.

This is no small feat and major media companies are all looking to either merge or transact. Just last week Disney (ESPN), Fox, and Warner Bros. Discovery (TNT, TBS) announced they would be partnering on a yet-to-be-named streaming sports service. This is just the start of what is sure to be the biggest shakeup in media since the advent of streaming. Understanding how to navigate this complex landscape will be tantamount to success for media agencies but right now there are two main problems with the way linear TV is planned and purchased.

Firstly, the media agencies employed by pharma, especially at launch, are agencies whose core value proposition revolves around advantageous linear rates. These rates are achieved via large volumes of linear inventory bought for pharma and non-pharma clients alike. Sometimes this inventory is even left over from larger buys, e.g. CPG or automotive – meaning it’s not bought specifically for a pharma brand’s target audience.

Secondly, the streaming landscape is going to remain highly volatile for the next two years and because of their dissatisfaction with the strike, content availability and rising prices, consumers are canceling their streaming subscriptions at record pace. According to a July 2023 survey by Whip Media, over 24% of Americans canceled their subscriptions with Paramount+, Peacock and Apple TV+, respectively.

For clients working with media agencies, it’s high time you reconsider the core specialty area of your agency. If it’s linear TV rates, the ship has sailed on that skill set. In 2024 clients should be seeking agencies that are highly digital in nature, programmatic savants, expert industry analysts and future prognosticators. To use a “Gladwellian” term, they are mavens in the truest sense. They represent a specific archetype of a person with the ability to connect with others at scale, accumulate knowledge and information, then deploy these ideas to the masses.

As consumers (both patients and HCPs) cancel linear subscriptions, they are spending between 60 and 120 additional minutes per day, on social media. This is especially true of vertical video platforms where content is passively consumed, especially at the end of the day as entertainment. If this sounds a lot like TV, that’s because it is, and some analysts, this one included, are referring to vertical video as another TV-like channel.

The key takeaway here is that the media agencies who combine a high aptitude for untangling these new trends, especially as they relate to patients and doctors – then restructuring the buying paradigm to be nimbler and more proactive, will be the agencies best suited to shepherd clients into the new media landscape.  

Contact us to speak with our media experts so you can learn how to take advantage of these trends, to best position your brand for success in the new media landscape.