Leveraging Social Media in the Pharmaceutical Industry

  • Venkatesh Shankar
  • Jiaoyang (Krista) Li
Part of the International Series in Quantitative Marketing book series (ISQM, volume 20)


Social media and social networks are the rage these days. The healthcare industry in general and the pharmaceutical industry in particular, are being reshaped by the proliferation of electronic communication through social media. Consequently, marketing practices are also evolving rapidly. Pharmaceutical marketers need a better understanding of how social media work and how they influence marketing strategy. This chapter reviews the burgeoning literature on word of mouth, in particular relating to social media and on how social media and social networks are redefining marketing strategy in this context. It provides a framework for analyzing the effects of social media on patients, physicians, and marketers. It offers actionable implications for pharmaceutical companies, provides pointers to successfully develop and implement an integrated social media marketing strategy, and highlights fruitful avenues for future research.


Social Medium Opinion Leader Social Contagion Pharmaceutical Firm Traditional Marketing 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. American Medical News (2010) 86% of physicians use Internet to access health information. Available at
  2. Ansari A, Koenigsberg O, Stahl F (2011) Modeling multiple relationships in social networks. J Market Res 48(4):713–728CrossRefGoogle Scholar
  3. Aral S, Muchnik L, Sundararajan A (2009) Distinguishing influence-based contagion from homophily-driven diffusion in dynamic networks. Proc Natl Acad Sci 106:21544–21549CrossRefGoogle Scholar
  4. Arndt J (1967) Role of product-related conversations in the diffusion of a new product. J Market Res 4(3):291–295CrossRefGoogle Scholar
  5. Arnold M (2011) Pharma digerati push for online guidelines. Medical Marketing & Media. Available at Accessed 16 June 2011
  6. Bandura A (1977) Social learning theory. General Learning Press, New YorkGoogle Scholar
  7. Barnett ML, Landon BE, James O’Malley A, Keating NL, Christakis NA (2011) Mapping physician networks with self-reported and administrative data. Health Serv Res 46(5):1592–1609CrossRefGoogle Scholar
  8. Bart Y, Shankar V, Sultan F, Urban GL (2005) Are the drivers and role of online trust the same for all web sites and consumers? A large scale exploratory empirical study. J Market 69(4):133–152CrossRefGoogle Scholar
  9. Bell DR, Song S (2007) Neighborhood effects and trial on the Internet: evidence from online grocery retailing. Quant Market Econ 5(4):361–400CrossRefGoogle Scholar
  10. Berger J, Schwartz E (2011) What Drives Immediate and Ongoing Word of Mouth? J Market Res 48(5):869–880Google Scholar
  11. Berger J, Sorensen AT, Rasmussen SJ (2010) Positive effects of negative publicity: when negative reviews increase sales. Market Sci 29(5):815–827CrossRefGoogle Scholar
  12. Chen Y, Wang Q, Xie J (2011) Online social interactions: a natural experiment on word of mouth versus observational learning. J Market Res 48(2):238–254CrossRefGoogle Scholar
  13. Chevalier JA, Mayzlin D (2006) The effect of word of mouth on sales: online book reviews. J Market Res 43:345–354CrossRefGoogle Scholar
  14. Ching AT (2010) Consumer learning and heterogeneity: dynamics of demand for prescription drugs after patent expiration. Int J Ind Organ 28:619–638CrossRefGoogle Scholar
  15. Christakis NA, Fowler JH (2011) Commentary: contagion in prescribing behavior among networks of doctors. Market Sci 30(2):213–216CrossRefGoogle Scholar
  16. Coleman JS, Katz E, Menzel H (1966) Medical innovation: a diffusion study. Bobbs-Merrill, IndianapolisGoogle Scholar
  17. Ding M, Eliashberg J (2008) A dynamic competitive forecasting model incorporating dyadic decision making. Manag Sci 54(4):820–834CrossRefGoogle Scholar
  18. Dolan PL (2010) 86% of physicians use Internet to access health information. Available at
  19. Facebook (2011) Statistics: people on Facebook. Available at Accessed 2 June 2011
  20. Foster AD, Rosenzweig MR (1995) Learning by doing and learning from others: human capital and technical change in agriculture. J Polit Econ 103(6):1176–1209CrossRefGoogle Scholar
  21. Garber T, Goldenberg J, Libai B, Muller E (2004) From density to destiny: using spatial dimension of sales data for early prediction of new product success. Market Sci 23(3):419–428CrossRefGoogle Scholar
  22. Godes D, Mayzlin D (2004) Using online conversations to study word-of-mouth communication. Market Sci 23(4):545–560CrossRefGoogle Scholar
  23. Godes D, Mayzlin D (2009) Firm-created word-of-mouth communication: evidence from a field study, Market Sci 28(4):721–739CrossRefGoogle Scholar
  24. Hartmann WR, Manchanda P, Nair H, Bothner M, Dodds P, Godes D, Hosanagar K, Tucker C (2008) Modeling social interactions: identification, empirical methods and policy implications. Market Lett 19:287–304CrossRefGoogle Scholar
  25. Hoffman D (2009) Managing beyond Web 2.0. McKinsey Quarterly report. Available at Accessed July 2009
  26. Iyengar R, Van den Bulte C, Choi J (2011a) Distinguishing among multiple mechanisms of social contagion: social learning versus normative legitimation in new product adoption. Working paperGoogle Scholar
  27. Iyengar R, Van den Bulte C, Valente TW (2011b) Opinion leadership and social contagion in new product diffusion. Market Sci 30(2):195–212CrossRefGoogle Scholar
  28. Iyengar R, Van den Bulte C, Valente TW (2011c) Further reflections on studying social influence in new product. Market Sci 30(2):230–232CrossRefGoogle Scholar
  29. Jupiter Research (2007) Social networking sites: defining advertising opportunities in a competitive landscape. Available at
  30. Kruglansk AW, Mayseless O (1990) Classic and current social comparison research: expanding the perspective. Psychol Bull 108(2):195–208CrossRefGoogle Scholar
  31. Li J, Shankar V (2011) Salesforce targeting strategy incorporating social contagion. Working paper, Texas A&M UniversityGoogle Scholar
  32. Liu Y (2006) Word of mouth for movies: its dynamics and impact on box office revenue. J Market 70:74–89CrossRefGoogle Scholar
  33. Luo X (2009) Quantifying the long-term impact of negative word of mouth on cash flows and stock prices. Market Sci 28(1):148–165CrossRefGoogle Scholar
  34. Manchanda P, Xie Y, Youn N (2008) The role of targeted communication and contagion in product adoption. Market Sci 27(6):961–976CrossRefGoogle Scholar
  35. Manhattan Research (2008) Internet surpasses doctors as the top source of health information. Available at
  36. Manski CF (1993) Identification of endogenous social effects: the reflection problem. Rev Econ Stud 60(3):531–542CrossRefGoogle Scholar
  37. Mayzlin D (2006) Promotional chat on the Internet. Market Sci 25(2):155–163CrossRefGoogle Scholar
  38. Miley M, Thomaselli R (2009) Big pharma finally taking big steps to reach patients with digital media. Advertising Age. Available at
  39. Milgrom P, Roberts J (1986) Price and advertising signals of product quality. J Polit Econ 94(4):796–821CrossRefGoogle Scholar
  40. Nair HS, Manchanda P, Bhatia T (2010) Asymmetric social interactions in physician prescription behavior: the role of opinion leaders. J Market Res 47:883–895CrossRefGoogle Scholar
  41. Nam S, Manchanda P, Chintagunta P (2010) The effect of signal quality and contiguous word of mouth on consumer acquisition for a video-on-demand service. Market Sci 29(4):690–700CrossRefGoogle Scholar
  42. Narayanan S, Manchanda P (2009) Heterogeneous learning and the targeting of marketing communication for new products. Market Sci 28(3):424–441CrossRefGoogle Scholar
  43. National Research Corporation (2011) 1 in 5 Americans use social media for health care information. Available at
  44. Nelson P (1974) Advertising as information. J Polit Econ 82(4):729–754CrossRefGoogle Scholar
  45. Petrova E (2011) The business of innovation in the pharmaceutical industry. In: Ding E, Stremersch E (eds) Route to market: the genesis of a drug. Pharmaceutical marketing handbook. Springer, New YorkGoogle Scholar
  46. PewInternet (2010) The social life of health information, 2011. Available at
  47. Rui H, Liu Y, Whinston AB (2011) Chatter matters: how twitter can open the black box of online word-of-mouth. ICIS 2010 proceedings. Paper 204. Available at
  48. Sarasohn-Kahn J (2008) Why do you trust? Edelman’s Trust Barometer says “people like me,” tech, life science, and banks - not insurance, media, or government. Available at
  49. Schmitt P, Skiera B, Van den Bulte C (2011) Referral programs and customer value. J Market 75:46–59CrossRefGoogle Scholar
  50. Sermo (2009) Sermo survey of US physicians indicates AMA no longer represents them. Available at
  51. Sermo (2011) Get to know Sermo. Available at
  52. Shankar V (2008) Strategic allocation of marketing resources: methods and insights. In: Kerin RA, O’Regan R (eds) Marketing mix decisions: new perspectives and practices. American Marketing Associations, Chicago, pp 154–183Google Scholar
  53. Shankar V, Balasubramanian S (2009) Mobile marketing: a synthesis and prognosis. Tenth anniversary special issue. J Interact Market 23(2):118–129Google Scholar
  54. Shankar V, Hollinger M (2007) Online and mobile advertising: current scenario, emerging trends, and future directions. MSI Report No. 07-206, Marketing Science InstituteGoogle Scholar
  55. Socialnomics (2009) Statistics show social media is bigger than you think. Available at
  56. Sonnier GP, McAlister L, Rutz OJ (2011) A dynamic model of the effect of online communications on firm sales. Market Sci 30(4):702–716Google Scholar
  57. Thomaselli R (2011) New Facebook policy spurs big pharma to rethink social media strategy. Available at
  58. Trusov M, Bucklin RE, Pauwels K (2009) Effects of word-of-mouth versus traditional marketing: findings from an internet social networking Site. J Market 73:90–102CrossRefGoogle Scholar
  59. Van den Bulte C, Iyengar R (2011) Tricked by truncation: spurious duration dependence and social contagion in hazard models. Market Sci 30(2):233–248CrossRefGoogle Scholar
  60. Van den Bulte C, Joshi YV (2007) New product diffusion with influentials and imitators. Market Sci 26(3):400–421CrossRefGoogle Scholar
  61. Van den Bulte C, Lilien GL (2001) Medical innovation revisited: social contagion versus marketing effort. Am J Sociol 106(5):1409–1435CrossRefGoogle Scholar
  62. Van der Lans R, Van Bruggen G, Eliashberg J, Wierenga B (2010) A viral branching model for predicting the spread of electronic word of mouth. Market Sci 29(2):348–365CrossRefGoogle Scholar
  63. Varadarajan R, Yadav MS, Shankar V (2008) First-mover advantages in an Internet-enabled market environment: conceptual framework and propositions. J Acad Market Sci 36(3):293–308CrossRefGoogle Scholar
  64. Villanueva J, Yoo S, Hanssens DM (2008) The impact of marketing-induced versus word-of-mouth customer acquisition on customer equity growth. J Market Res 45:48–59CrossRefGoogle Scholar
  65. Wall Street Journal (2007) Pfizer-doctors web pact may get looks: site partnership aims for dialogue on drugs outside usual pitches. Available at
  66. Wikipedia (2011) Social media. Available at
  67. Zhang X, Zhu F (2011) Group size and incentives to contribute: a natural experiment at Chinese Wikipedia. Am Econ Rev 101:1601–1615CrossRefGoogle Scholar
  68. Zhang K, Evgeniou T, Padmanabhan V, Richard E (2012) Content contributor management and network effects in a UGC environment. Market Sci 31(3):433–447Google Scholar

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.Mays Business SchoolTexas A&M UniversityCollege StationUSA

Personalised recommendations