Turning the Ins and Outs of Marketing Inside-Out - Pharmaceutical Executive


Turning the Ins and Outs of Marketing Inside-Out

Pharmaceutical Executive

Yet one top-five company recently spent $20 million on outside agencies and technology companies to revamp its portal. The digital agency now rebuilding another pharma portalsaur said the budget was justified internally by this reasoning: "If we can get just one more visit per year per doctor, we'll call that success."

So moving from three to four visits a year is viewed as a success. This, while the same Manhattan Research report showed doctors are visiting sites like Medscape 100 times a year, and pharma-branded sites 80 times a year.

On the consumer side, we've seen equally startling reasoning. It's been well established for years that the ROI for television and print campaigns is lower than better-targeted channels such as digital. For TV, ROI is generally less than 2:1, and getting worse, while ROI for typical digital campaigns has been consistently 4:1 and rising over the last several years.

In fact, when I asked one marketing director why his brand continued to spend in equal proportions on TV, print, and digital—despite the fact that their own cross-channel marketing effectiveness study established that ROI was in the double digits for digital, less than two for TV, and negative for print—he responded: "Because we believe in a marketing mix."

So What Gives?

When you see the symptoms of illogical decision-making, you look for other, larger causes that can explain why what appears wrong-headed from a strictly business point of view nevertheless persists. In pharma, there are three prime causes.

1) The disconnect between promotion and sales. The unique, tri-partite nature of the economic transaction in pharma makes the sales process more complex than in any other industry. The 'buyer' (usually an insurance plan) is not the 'customer;' the 'decider' (the doctor) is not the buyer; and the 'consumer' (the patient) is generally neither the 'decider' nor the 'buyer.'

These peculiar dynamics are well understood. But often overlooked is how this dynamic obscures the connection between promotional activities and sales results. Proving that a particular technique contributed significantly to a sale is extraordinarily difficult in pharma, which leads to a lack of marketing accountability. Thus pharma marketers can continue building portals on very sandy foundations.

2) Brands with expiration dates. In what other industry do companies spend hundreds of millions of dollars to create a brand that will disappear pretty much completely in a few years' time? No wonder pharma is overwhelmingly sales-driven rather than marketing-driven. Leadership trusts people who know how to sell to all those Dr. Deciders. And leadership often has less patience for the once-removed nature of marketing campaigns.

3) Regulated speed. The factor everyone cites is the restrictions and cautiousness resulting from FDA regulation. Marketers are sensibly wary of doing anything that might risk approval of an indication or generate a warning letter. This reinforces the tendency to keep the status quo—because it appears safer, because the true risks are not clearly seen.


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