US pharmaceutical companies spent an estimated $3 billion on direct-to-consumer (DTC) advertising in 2005.

A recent study shows that the DTC’s effects on sales are negligible.

Did the industry flush $3 billion down the drain? If you know much about advertising, you know that measuring ROI in advertising is extremely difficult. The study is a clever look at teasing meaning out of the incredibly complex pharma marketplace. Looking at the effect on sales, while important, ignores many of the other possible effects on consumer awareness and motivations.

Recently, pharma companies have been shy about advertising online in venues that do not have enough space to meet the FDA’s requirements for ‘fair balance’. But a recent report suggests that 61% of American adults now look online for health information. This audience isn’t going away, and neither are the ads, effective or not.

Only two countries allow DTC advertising (the US and New Zealand). You have to wonder, if the effect on sales is negligible, what else could have been done with that $3 billion?