The prospect of a new advertising money-spinner emerging in Hong
Kong - if a decades-old ban on pharmaceutical advertising is lifted -
has been overshadowed by questions about local agencies' ability to
handle the category's unique requirements.
Indeed, if the Undesirable Medicinal Act ad ban is removed, agencies
will need to quickly develop specialist category experience for the raft
of product offerings - from medication for fungal diseases to STDs,
baldness and dermatology - which will be allowed to advertise. And much
of it is likely to be educational in nature.
While there is some dispute over the category's potential spending
power, estimates that first year spend could top HK$400 million
(US$51 million) demonstrates the sheer scale of the challenge
awaiting agencies. Grey Healthcare managing director Candy Wan expects
the average client budget of $5 million will rise
considerably.
But higher investments will mean greater pressure to excel.
DraftWorldwide regional director Greg Paull said client Merck Sharp and
Dohme spent US$94 million on advertising for Propecia, a product
to treat male pattern hair loss, and achieved sales of $98
million last year. "This is an investment into creating a lifetime of
valuable customers. In the pharmaceutical category, some products
require significantly more investment, given their lifetime of
usage."
But having spent the last few years honing their skills to the younger,
trendier telecommunications and technology markets, are Hong Kong
agencies equipped with the know-how and understanding to service this
specialised sector and its generally older target audience? Market
Catalyst's Conrad Chiu says that Hong Kong is still a market with a
traditional FMCG culture.
"The lack of expertise is not just limited to healthcare. Hong Kong has
been moving towards the service economy, which requires new
knowledge."
However, Ian Thubron, chief executive of M&C Saatchi Hong Kong and
China, argues that with the "proper tools, even men can write tampon
ads". The real challenge for agencies, he says, will involve
understanding the problems and needs of the target audience. Using
research properly, understanding consumers, developing key insights will
all be highly relevant. Hong Kong is increasingly a
churn-it-out-without-too-much-thought marketplace, and that's not going
to help develop insightful and compelling campaigns for this new
category."
At Grey, staff receive training on-the-job, but Wan cautions that
agencies will need to sharpen their skills to deal with this specific
category.
"Agencies tend to treat OTC products like FMCG. They focus on the brand
image and build trust," says Wan. "With pharmaceutical clients, you need
special training and a medical perspective. The department of health has
no understanding of advertising, and right now agencies are good at
producing ads for consumers, but they lack a medical perspective. You
need someone who really understands both sides of the issue."
But the biggest concern facing the industry is one of ethics. In a city
where there is effectively no regulation against misleading or false
claims in advertising, the Consumer Council found 84 per cent of
advertising for medication, health food and therapies last year came
with questionable claims. "Ethics is something the agencies will have to
learn quickly.
With FMCG, you're selling a dream, not the product. With pharmaceutical
products you cannot make claims that are not proven through clinical
studies," says Wan.
Motiv8 managing director, Chris Fjelddahl, says the issue is endemic in
Hong Kong. "Most agencies will communicate questionable benefits and not
rely on real facts. A lot of advertising here is using unfounded and
uncheckable claims," he says. "I have yet to see a single property ad
which accurately states how many usable square feet of real estate
you're actually buying. So, with medical products, I don't think many
agencies are equipped with the right business ethics to stick to the
real benefits of a product."
Ultimately, the lifting of the ban will provide an opportunity for
agencies to expand their knowledge base as Hong Kong becomes more of a
service economy. Says Chiu: "The challenge for management now will be to
take this opportunity and use it to improve staff knowledge, which in
turn will become an asset for the company."
