The New York Times is reporting that GlaxoSmithKline is both a) no longer going to use physicians to flack their drugs to other physicians, and b) will no longer tie “compensation of sales representatives to the number of prescriptions doctors write.”
This is perhaps the worst news I’ve seen yet for advertising.
How so? Well, first off, the doctors selling to other doctors was an instance of person-to-person word-of-mouth sales. No news, radio, tv, internet purchases as such. In other words, these were pitches that were unmediated and direct. And they weren’t generating enough sales to earn back their expense (presumably either fixed amounts or a cut of the sales, to the doctors doing the talking).
But the other thing is… The holy grail of Facebook, Google, Twitter, and Big Data in general is that they’ll allow very targeted ads. You won’t see “junk” anymore – you’ll only see items you should have a demonstrated interest in.
Tell me, can you think of something more targeted than doctors talking to other doctors about medicines? What does this tell us about the effectiveness of such an approach?
Nope, we’re not in an internet bubble… We’re in an advertising bubble. The evidence that advertising simply isn’t cost-effective at generating sales keeps adding up.
UPDATE: I originally heard about this story at KUOW’s The Record. Listen to Natalie Mizik, a professor of marketing at the University of Washington, and you can just hear how ineffective the whole thing was for GSK.