Spend Trends: A $20 Billion Bill and Plenty of Change - Pharmaceutical Executive


Spend Trends: A $20 Billion Bill and Plenty of Change

Pharmaceutical Executive

"ROI is crucial," Devereaux says. "But it's far easier to measure in relationship marketing than in awareness advertising. Relationship marketing is built on numbers: What does it cost to generate a lead or convert a new user? It all comes down to math. Awareness ads cast a wide net, reaching targets and their influencers, but you don't have any way to track how that changes behavior. There's a lot of gray space between an NRx (a new prescription, intended to denote a patient's first time on therapy) and a TRx (or total prescription, how many people are taking a drug altogether). You can't know whether the patient you're counting as new is someone you counted two years ago but then went off therapy. When you don't know the specific individual, tracking ROI is more difficult."

Concentrated Efforts
The search for cost-effective methods is working its way through the entire marketing function, kicking off other trends. One is vendor consolidation. Devereaux says, "The major pharma companies, Pfizer, GSK, Schering, all have limited the number of agencies or networks they're dealing with in order to gain efficiencies."

Another trend Devereaux sees, not only in pharma but across all the brands she works on, including consumer brands, is the growing reliance on quantitative testing. Her clients use a measurable threshold for advertising effectiveness. "If the campaign doesn't meet their individual objectives, they say, 'Go back to the drawing board until you come up with work that's going to move the needle beyond the norm.'" It's one way to measure ROI when you can't track behavior patient by patient.

''Pharma marketing is about all forms of promotional activity working together across disciplines to develop synergy for the brand by leveraging and coordinating communications channels. david gascoigne, practice leader, promotion management,tims consulting"
The Marketing Remix What does the future of pharma marketing look like? Everyone, it seems, wants to pare sales force costs but can't. Pharma is still learning the ABCs of DTC. The web will become a marketing mainstay. Although permission, relationship, experiential, and other nontraditional marketing alternatives will become more prominent—Gascoigne sees "a gradual migration from macro- to micro-marketing"—more money will be spent on mass advertising. "It's still so much more expensive," Devereaux says, "that it's always going to represent a disproportionately large share of the budget." The question is: Does mass advertising have an impact proportional to the spend? Devereaux's answer: "It could be that you have to spend—I'm making this up—$50 million in advertising to achieve a level of awareness that you need so an additional $10 million in relationship marketing will contribute dramatically more to the bottom line—because it's talking exactly to those people who have said they want to be talked to."

This points toward another big trend: integrated marketing. Pharma marketers, Ramspacher says "are getting a better feel for how to get things to work in concert, how to get the right media mix." Mehr says, "It's not an either/or decision. You'll start to see promotion channels complement one another." The industry is "very good at promoting in each channel. Integrating across and developing a single-stream message, that's a challenge right now. You'll see more people testing that approach and asking about leveraging channels simultaneously or concurrently rather than independently. The more weapons you have and the bigger their impact, the more flexibly you can handle competitive threats and changing market conditions."


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