Digital Advertising for Regulated Industries
August 24, 2017
Digital platforms offer a unique suite of tools that businesses can use to introduce their brands to qualified audiences and drive online and offline sales with the utmost efficiency. However, marketers can only deploy a few of these offerings when advertising in a regulated field like the pharmaceutical or financial industry. Marketing a pharmaceutical drug or a financial service is different from marketing retail or consumer product goods. There are rules outlined by local laws and regulatory bodies such as the Federal Trade Commission (FTC), Food and Drug Administration (FDA), Financial Industry Regulatory Authority (FINRA), and the Federal Financial Institutions Examination Council (FFIEC) surrounding messaging, creative and targeting that brands must abide by, due to the immense impact that pharmaceutical companies and financial institutions can have on an individual’s wellbeing and standard of living.
These restrictions have not prevented brands in regulated industries from increasing their investments and driving successful returns on digital platforms. eMarketer reports that U.S. financial services advertisers spent 19.5 percent more on online advertising than they did in 2015, while healthcare and pharma advertisers spent 20.5 percent more on digital ads in 2016 than they did a year prior. Pharma and finserv giants are spending millions to reach the right people directly, recognizing that digital channels present marketers with an opportunity to find a more qualified audience than traditional advertising. For example, a marketer promoting osteoporosis medication can eliminate unnecessary waste by serving its ads only to people on Facebook over the age of 50, while a consumer banking company promoting credit cards aimed at college students can eliminate people over the age of 23.
Check out the following recommendations to learn how pharma and financial services brands meet their business goals while upholding their respective industry’s guidelines. Please note that the following is a non-exhaustive list of recommendations, and that brands promoting pharmaceutical drugs and treatments, and financial services and products, should ensure that they are complying with the most up-to-date state and local regulations associated with the regions in which their ads are served.
Nielsen reports that spending on direct-to-consumer pharmaceutical ads increased 9% in 2016, and has become the most common type of healthcare communication. Pharma marketers should familiarize themselves with the three main types of direct-to-consumer ads, and the corresponding FDA regulatory requirements associated with each type. According to the U.S. National Library of Medicine, help-seeking ads, as outlined by the FDA, provide information about a medical condition and as the name implies, encourage patients to contact their doctors without mentioning a product. Reminder ads name a drug, dosage form, and possibly cost but not its uses. Therefore, brands are not required to include any mention of risks since no product claims are made in this ad type. However, the FDA does not allow reminder ads for drugs with serious risks. The third and most common (and therefore most regulated) ad type is a product claim ad, which names a drug and makes a claim regarding its safety and efficacy. The FDA dictates that product claim ads must not be false or misleading, present a fair balance of information regarding risks and benefits, include facts that are material to the product’s advertised uses, and include a brief summary that mentions every risk described in the product’s labeling.
To protect people from misleading ads, the FDA keeps a close eye on pharma ads online. The New York Times reports that in 2015, the FDA came down on a Kim Kardashian selfie on Instagram in which she promoted a morning-sickness drug without mentioning its potential side effects. Kardashian deleted the photo and reposted it with the drug’s side effects. That’s not to say that you can’t use influencers, you just have to ensure that your ad immediately discloses itself as branded content and includes all disclaimers about the risks and side effects of your drug in addition to its benefits. Your ad should not mislead the consumer in any way. Marketers should also note that for international campaigns, there may be local laws prohibiting the use of influencers. For example, in some countries like Canada, only licensed healthcare professionals can engage in this type of paid promotion.
Another area to be conscious of is the tone of your brand’s messaging. Pharma brands should refrain from using the second person point of view. This comes as no surprise as an ad that says “You need this drug now” can make consumers feel uncomfortable or watched. This regulation is unique to the pharma industry, as ads that call out the individual are rampant during retail summer sales, for example.
Messaging is an equally important consideration for financial companies, as it’s important to provide people with adequate information to make informed financial decisions. Policing financial services ads is equally challenging for ad platforms themselves. But digital platforms such as Google, armed with AI technology and human capital, carefully comb through ads to ensure that content promoting deceptive or harmful financial products is not reaching people online. For example, Google will reject ads promoting short-term loans that require repayment in full in 60 days from the date the loan is issued, or ultra high-cost personal loans. Similarly, ads for mortgage-related or foreclosure-related sites and apps can be disapproved for guaranteeing loan modification or foreclosure prevention, charging an upfront fee, asking users to transfer or surrender property titles, asking users to bypass the lender and make payments directly to the company or other third party, or encouraging users not to contact their lender, lawyer, credit counselor, or housing counselor.
Due to the complexity of financial products and services, disclosures are critical; depending on the product, marketers are required to include all the necessary disclosures in the actual ad or visibly in the associated link on which consumers can easily click through. To ensure that your ad is not disapproved by digital platforms, finserv brands should reference and comply with the Truth in Savings Act and the Truth in Lending Act, as outlined in the American Bank Association’s social media guidelines. Google typically disapproves ads that fail to disclose associated fees; disclosures can’t be posted as roll-over text or through another link or tab. They must be clearly and immediately visible without needing to click or hover over anything. Google may also reject a finserv ad that fails to include links to third-party accreditation or endorsement where affiliation is asserted or implied. An ad may also be disapproved on Google if it fails to provide legitimate contact information for a brick and mortar location for the brand promoted.
Financial companies promoting personal loans must ensure their ads provide information about the quality, features, fees, risks, and benefits of loan products, to ensure that consumers are armed with the knowledge they need to make informed decisions about whether to undertake the loan. An ad for personal loans could be disapproved if it fails to disclose the minimum or maximum period for repayment, the maximum annual percentage rate (including interest rate plus fees and other costs for a year, or a representative example of the total cost of the loan, including all applicable fees).
On digital channels, you have a limited amount of real estate and consumer attention to tell an impactful story about your brand. That’s not easy when you also have to disclose a significant amount of information to meet a regulated industry’s advertising guidelines. The Federal Trade Commission mandates that consumers should be provided with clear and conspicuous information to make informed decisions, despite space constraints and limitations on social media platforms. According to the FTC’s guidelines, hyperlinks should not be used for product cost or certain health and safety issues and if used, hyperlinks should be placed close to the triggering claim and labeled to inform the consumer of its importance and relevance. The FTC also recommends checking that your ads are mobile-optimized to ensure that disclosures are clear and conspicuous, regardless of the device on which they are displayed.
Thankfully, marketers have a number of ad units to drive their business objectives online. In 2016, Facebook introduced the option of adding scrolling ISI (an auto-scrolling line of text) to video ads, giving pharma marketers the real estate they need to disclose all types of safety information about a drug. Regardless of where the brand is activating, marketers need to work closely with their platform and marketing partners to ensure that their creative passes FDA criteria.
Once a pharma or finserv brand has secured a number of approved assets (as vetted by lawyers and approved by the platform they’re advertising on), marketers in any industry can A/B test content at low levels of spend to determine which creative possibilities resonate the most with its target audience. Creative pre-testing is your brand’s answer to a focus group, since a healthcare or pharma focus group will most likely not be an option without legal concerns. Testing different digital videos, for example, allows you to strategically scale spend against top-performing variations, and can inform your creative strategy for other channels. Let’s say you sell allergy medication and are planning to buy TV spots during March Madness. As TV advertising costs run high, you could run different video assets on Facebook, Instagram, Twitter, Snapchat, Pinterest and/or YouTube to identify a top performer to use in your March Madness TV ad buy. According to SocialCode data, campaigns that pre-test content are 20-25% more efficient.
One of the main reasons marketers invest in digital and social platforms is that these channels connect brands with qualified audiences. Each platform inherently has a valuable audience that marketers want to reach, as well as the targeting tools to hone in further on their target demographic. A marketer promoting a women’s daily vitamin can invest in Pinterest, as the platform skews heavily females. This is especially useful as women make the majority of healthcare decisions in their households. But there are many regulations around targeting people with direct-to-consumer pharma ads. You cannot hypertarget people, for obvious reasons. Similar considerations exist in the financial industry. There are a number of FFIEC rules marketers should familiarize themselves with. For example, brands promoting financial products and services must ensure that their targeting strategy does not violate the Equal Credit Opportunity Act or Fair Housing Act. In fact, mortgage lenders must display the Equal Housing Opportunity logo on their Facebook page. There are, however, several ways to reach the people who would be most interested in buying YOUR products, without breaking any rules.
Video retargeting is one of the most powerful tools a brand in any industry can use on Facebook, as it allows people to self-qualify themselves. By watching one of your videos to completion, I, as a consumer, am indicating to you that I want to learn more about your product. Instead of making generalizations about who your audience is (i.e. millennial moms), an effective strategy would be to broadly target everyone on Facebook and Instagram over the age of 25 with a video, and retarget video viewers and engagers in subsequent campaigns to further drive brand awareness, recall, and preference. Last year, a pharmaceutical brand drove 20% lower cost-per-video views and 85% higher video completion rates by deploying a video retargeting strategy. This strategy is especially useful for certain medical conditions in which the whole family is involved; by broadly targeting all adults on Facebook, you’re opening up the opportunity for a daughter to learn about a drug that her 60+ father may be in the market for.
Another aspect of targeting that marketers should understand is that due to laws around health record privacy, marketers cannot use customer data to retarget people with pharma ads. This includes features like CRM lookalike targeting. However, brands can target organizations affiliated with diseases. For example, a pharmaceutical company producing a drug that alleviates multiple sclerosis symptoms can target people who like or engage with the National MS Society page on Facebook. By targeting organizations on Facebook, brands can reach people who are in some way interested in learning more about drugs pertaining to this disease. Additionally, marketers who want to promote their product to healthcare professionals can take advantage of Facebook (and Instagram’s) job title targeting feature. On LinkedIn, advertisers can also target healthcare professionals, leveraging company targeting + function, as well as professional groups focused on different medical areas.
However, depending on the exact product or service your brand is promoting, marketers have access to a broad set of tools such as interest or income targeting on Facebook. For example, one of SocialCode’s various financial services and insurance clients is allowed to utilize income targeting to reach people in a certain income bracket and lookalike targeting to serve ads for one of its credit card products to people resembling their website visitors or current customers. It is worth investigating with your brand’s legal council where this is permissible, as these targeting tools can drive significant efficiency. SocialCode works with a Fortune 500 financial services company that exemplifies the tenets of an effective brand in a regulated industry. The brand integrated a partner’s first-party data with SocialCode’s audience-profiling technology and found that the people currently converting from the campaign were more likely to be Gen Xers making more than $50,000 a year and based in the East Coast, among other qualities. Based on this analysis, SocialCode’s ad team created a separate audience of people with these characteristics to target. As a result of these manual audience optimizations, the brand was able to drive 40% more efficient online conversions for its partner.
But targeting regulations are not unique to these two industries; each industry has its own challenges online. For example, alcoholic beverage producers must deploy age targeting to ensure that they’re only reaching people above the age of 21.There may be numerous hurdles in the advertising world, but brands can utilize the aforementioned creative, targeting and messaging considerations to drive brand objectives with utmost integrity. The increase in digital spend we see across each of these industries indicates that the benefits of advertising online far outweigh the challenges of treading carefully around rules and regulations.