Direct-to-Consumer Advertising and Online Search
Beginning in 1997, the Food and Drug Administration (FDA) allowed television advertisements to make major statements about a prescription drug, while referring to detailed drug information on the internet (FDA 1997; 2015). The hope was that consumers would seek additional information online to fully understand the risks and benefits of taking the medication. To better understand the effects of the policy, we analyze direct-to-consumer advertising (DTCA) and search engine click-through data on a set of drugs over a three-year period.
Regression analysis shows that advertising on a prescription drug serves to increase the frequency of online search and subsequent clicks for that drug, as well as search for other drugs in the same class. We find the relationship between DTCA and search is stronger for younger drugs, for those drugs that treat acute conditions, those drugs that are less likely to be covered by insurance, and those whose searcher population tends to be older. These findings suggest that DTCA motivates consumers to search online for drug information, but the magnitude of the effect is heterogeneous and potentially associated with clicks on websites that are more promotional in nature.
The opinions expressed here are those of the authors and not necessarily those of the Federal Trade Commission, any of its Commissioners, or the National Bureau of Economic Research. Weijia (Daisy) Dai provided extremely valuable research assistance. We are grateful to Dan Hosken, Chris Adams, Peter Cramton, John Rust, Michel Wedel, Gordon Gao, Andrew Mulcahy, Abby Alpert, Catherine Tucker, Lisa George, and participants at the University of Maryland marketing seminar and the 3rd Biennial Conference of the American Society of Health Economists for constructive comments. All errors are ours.
Matthew Chesnes & Ginger Zhe Jin, 2018. "Direct-to-consumer advertising and online search," Information Economics and Policy, .