Several years ago, a tiny pharma company with a promising compound decided to do something very few companies at the time
did: It thought about marketing before it launched its product. But the company consisted of only 10 people, including nine
scientists. They knew they didn't have the in-house expertise to develop a marketing strategy—much less implement one. They
approached the agency I was working for to serve as their outside marketing department—another unusual move because, at the
time, pharma only outsourced public relations and advertising.
These days, it's increasingly common for companies to outsource the marketing function. It's a strategy that allows companies
to benefit from professional expertise while avoiding the expense and inflexibility of maintaining an in-house staff.
This article provides insight into how these emerging relationships work, the activities outsourced marketing partners can
conduct, and some common sources of conflict that can change the relationship between outsourced partners and their clients
from collaborative to collapsing.
What to Look For in an Outside Marketing Agency
How It Works
Outsourcing makes sense for large companies with products that lack blockbuster potential, either because they don't have
patent protection or because they are designed to treat specialized or orphan conditions. Outsourcing is even more common
among start-ups, which have limited income to offset a marketing investment.
Merged entities In the ideal outsourcing arrangement, agency employees function exclusively as the pharma client's marketing arm. Such projects
typically begin with only a product manager and a product director—both of whom should have previous experience working on
the client side. These people look and act like employees of the client company—they even identify themselves as the client's
employees in person and on the phone for the life of the project.
But they're not, and there are many benefits to that aside from the obvious ones of reduced salaries and overhead. First,
it allows companies to keep head count low, which is important to many venture capitalists and investors. It also lets the
company "staff up" marketing initiatives without having to deal with the personnel issues that may result if the product fails.
Pre-launch activities Just as in any agency-client relationship, outsourced product management reports to a selected point person at the company.
The outsourced team works like an in-house team would, starting by developing a comprehensive marketing plan three or four
years before FDA approval and expected product launch.
The agency's plan should include a detailed timetable of pre-launch and launch activities, plus key elements of a broad marketing
and public relations campaign that include:
- publication planning
- competitive analysis
- developing forecast models
- determining product positioning
- conducting scientific and attitudinal research
- determining future promotional and informational needs
- selecting key opinion leaders (KOL) for advisory panels
Many companies traditionally handle these functions in-house. Some regard responsibilities such as KOL development as proprietary
and outside the scope of vendors' capabilities. But this responsibility can be outsourced effectively if the outside organization
is familiar with the medical community and has built trust with the client.
Midway between the development of the marketing plan and the beginning of launch preparation, the outside product management
team should bring in a team to function as ad agency account managers. Having both teams under one roof enhances understanding
and communication between the groups and with all relevant stakeholders.