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Super Bowl no longer 'right moment': Lilly shifts Cialis ads, will focus on programs aimed toward adults

January 9, 2006

As the Indianapolis Colts gear up for a run to next month's Super Bowl, Eli Lilly and Co. already has decided to watch from the sidelines after two straight appearances during the big game.

In a marketing strategy shift, the Indianapolis drugmaker will forgo TV commercials for its erectile dysfunction drug Cialis during the Super Bowl and the Winter Olympics, which begin Feb. 10.

Cialis competitors Viagra and Levitra may join it on the bench, as the pharmaceutical industry trends away from broadcast TV ads and toward more targeted marketing, such as cable and the Internet.

Lilly and partner Icos Corp. say they are changing their game plan in part because Cialis, after more than two years on the market, has established strong brand awareness. But they also acknowledge new industry guidelines on "direct-to-consumer" advertising helped nudge the drug out of the Super Bowl spotlight.

Lilly produces and markets Cialis as part of a 50/50 joint venture with Bothell, Wash.-based Icos Corp. The companies launched their drug in the United States in late 2003 and debuted their first Super Bowl commercial the following February.

"It brought us instant recognition," Lilly spokeswoman Kindra Strupp said. "As we move into year three, we're comfortable focusing our efforts and attentions in other areas."

Pricey Super Bowl advertising can lead to a wealth of exposure for companies and their products. Last year, the average 60-second Super Bowl commercial cost roughly $4.8 million but reached 90 million U.S. viewers, according to Abbey Klaassen, a media reporter for the trade publication Advertising Age.

"Generally, most marketers tend to think that the Super Bowl, paying for this enormous audience, is worth it," she said. "There's no other place you can reach that great an audience."

Lilly had never run a Super Bowl commercial before it ran Cialis ads two years in a row. For the 2004 game, the joint venture debuted a 60-second spot featuring a couple sitting in matching bathtubs as they held hands and gazed into the horizon. The introduction: "If a relaxing moment turns into the right moment, will you be ready?"

Last year, the couple reappeared in another minutelong commercial that featured the song "Be My Baby."

Levitra, an NFL sponsor, also appeared in a 2004 Super Bowl commercial, one featuring former coach Mike Ditka. But the drug, developed by Bayer Pharmaceutical and GlaxoSmithKline Plc, made no appearance last year.

GlaxoSmithKline spokeswoman Nancy Leone declined to discuss plans for this year's game, citing "competitive reasons."

Viagra maker Pfizer Inc. has never pushed its drug in a Super Bowl commercial and doesn't plan to this year, spokeswoman An Phan said.

The Cialis marketing shift comes at a time the drug's sales are rising faster than rivals'. In the first nine months of 2005, Cialis sales topped $536 million, up 34 percent from the same period a year earlier. In contrast, Viagra sales increased just 1 percent, to $1.2 billion.

With awareness of Cialis now high, Lilly officials say they're ready to sharpen their focus on men over age 40 and to move beyond simple name recognition.

But they also say the shift is part of an effort to comply with "guiding principles" for advertising announced last August by the Washington, D.C.-based Pharmaceutical Research and Manufacturers of America.

Under those guidelines, ads that might be inappropriate for children should be limited to publications or programs that draw an 80-percent adult audience.

Technically, the Super Bowl fits that description, Lilly's Strupp said. But the company decided to aim for a 90-percent adult audience to ensure its ads reach the right viewers.

"We've always been very committed to making sure our ads are broadcast during times when adult audiences are viewing," she said.

Lilly and Icos quietly began implementing their new approach last summer.

The association released the guidelines in the wake of grumbling from Congress and others about the content of direct-toconsumer advertising, said Rich Thomaselli, who covers pharmaceuticals and sports marketing for Advertising Age.

The erectile dysfunction ads created some backlash, he said, noting that the Cialis commercials "had been kind of risqué."

Even before the industry adopted the advertising guidelines, Lilly and Icos had begun scaling back advertising spending. In the first nine months of this year, it spent $375 million on selling, general and administrative expenses-a category that includes advertising and marketing-about $100 million less than the same period a year earlier.

Partly because of the reduced expenses, the Lilly/Icos joint venture posted its first profit in the third quarter, earning $19.8 million. In the same period a year earlier, it lost $21.4 million.

Despite the spending cutback, Lilly and Icos promise to remain aggressive on the marketing front. The joint venture still has marketing agreements with professional golf.

This week, it plans to roll out a fresh campaign, which will include another 60-second commercial featuring a different bathtub couple, this time overlooking a broad valley and distant village. But that commercial will air only during adult-oriented programs.

The new ads also will focus more on the specific attributes of Cialis. For instance, Lilly and Icos want to emphasize how the drug's 36-hour window of effectiveness fits the hectic lives of today's couples, Strupp said. She described the ad theme as "moments of interruption."

"What we're doing is trying to help them understand that that offers a flexibility they may not have otherwise," she said.

The new campaign also will emphasize the importance of doctor communication. Strupp noted that erectile dysfunction can be an early indicator of diabetes and heart disease.

The companies also are debuting a three-minute video on their Web site, www.cialis.com, and plan to add additional video testimonials to the site from physicians, sex therapists and couples.

The marketing challenges Cialis now faces are different from those it faced when it debuted, Leonard M. Blum, ICOS senior vice president of sales and marketing, told analysts during a quarterly conference call last fall.

Blum said Lilly and Icos had to carve out brand recognition for Cialis in a market dominated by Viagra, "the most wellknown pharmaceutical brand of all time." He said the companies succeeded and now are ready for the next phase.

"We can focus in on the doctors and the patients who are really relevant to us and explain now in greater depth ... why Cialis should be the drug they consider," he said.
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