We continue to see growing interest inperformance-based compensation systems. 

The bottom line is that clients areseeking a shared riskâreward to make sure agencieshave "skin in the game"-or to put it anotherway-are guaranteed to focus on the engagementgiven the stakes. As an agency, we have beenquite happy to participate in these arrangements provided the "game rules" are fair and equitable, and ensure an appropriatelevel of mutual control.

Richard T. Minoff, Dorland Global Corporation 

When you come from the biologics perspective, marketing looks quite different. 

The level of science knowledge for most of these therapies and their competitors requires a client service and creative staff willing to dive into the details. Secondly, specialty audiences-the most likely prescribers of biologics-are quite different from their primary care counterparts. They think differently, they are motivated differently, and they respond to communications and media differently. So instead of thinking about gaining top-of-mind awareness and saying that your pill is good for virtually any "new start" patient with, let's say, hypertension, we are often tasked with thinking about helping clients exquisitely segment their patients and physicians in an effort to help engineer an effective first trial. In the future, innovations in biologics, targeted therapies, and personalized medicine will make us think about marketing one-on-one versus mass marketing. I doubt most have even begun to think aboutthis prospect.

In the years ahead, it will be increasingly important to have command over the multitude of media and marketing channels. 

 Pharma CRM (relationship marketing) programming has been around for 20 years, and yet, in reality, little has changed. The level of generalization in most of these programs is staggering. So when I talk to someone about the finer points of patient segmentation-driven communications, or the use of psychographics, I am not amazed that most have little idea what the interrelationship is between these two topics. To that end, we need to move past the core, block-and-tackle patient programs to more direct, highly specific patient programming that addresses a specific patient's particular issues; otherwise we have wasted much opportunity,let alone money.

Dorland Global is a full-service, global healthcare communicationscompany with core competencies in brand strategy,advertising and marketing communications, public relations,and medical education to fit every stage of a brand's lifecycle.

Articles

"We continue to see growing interest in performance-based compensation systems. The bottom line is that clients are seeking a shared risk/reward to make sure agencies have "skin in the game", or to put it another way?are guaranteed to focus on the engagement given the stakes. As an agency, we have been quite happy to participate in these arrangements provided the "game rules" are fair and equitable, and ensure an appropriate level of mutual control.

Richard T. Minoff, Dorland Global Corporation

 sends an army of gumshoes out to pound the pavements in search of information on the industry's advertising providers for our special supplement 

 is intended to help you find the agency that is right for your brand.  

The methods used by our gumshoes may be unconventional. As private eyes, they will stop at nothing to uncover what's really happening behind the doors of the nation's top healthcare advertising agencies.  

Their confidential report is chock-full of marketing insights, trends, creative intelligence, and research data. This year it also includes interrogations of 25 of the highest-ranking healthcare advertising officials, who broke down and answered questions with surprising frankness. Talking not just about themselves, they shared insights into the state of pharma marketing at this crucial time in the industry's history (see "Agencies Are Talking About").  

 Change is the operative word in this year's report.  

And what does pharma marketing have to change? At a recent forum of pharmaceutical marketing science executives, facilitated by TGaS Advisers, panelists overwhelmingly agreed the channels undergoing the most change and those that offered the biggest opportunity for analytic improvement were the Internet and Relationship Marketing. Also, at the top of their list, was personal promotion (direct sales to physicians).  

And so how do the agencies fit in? They are still wanted, that's for sure. Pharma's need for specialized services, such as online marketing, along with cost controls that have stretched the industry's in-house resources continues to ensure having to enlist the help of healthcare advertising agencies, according to Jim Mercante, a partner at TGaS, which supplies benchmarking services to pharmaceutical companies. 

Pharma has always been a data-rich environment. In many ways their relationship with the ad agencies appears to have little in common—pharma (geeky, introverted, and data-driven) and ad agencies (showy, creative, and extroverted). But need trumps attraction every time. And together what they bring to the table as a team is priceless.  

Pharma has the data (and increasingly sophisticated pharma marketers) and the agencies have their muse, which has proven to be so valuable in the age of DTC.  

Now the agencies have a potentially even-bigger card to play—digital marketing savvy, something pharma has been painfully slow to embrace.  

 we offer some tips on how to make the relationship even stronger. 

Mystery might be alluring, but relationships thrive on full disclosure. To that end, Mark Chataway, an agency insider, pulls aside the curtain and exposes just about everything you ever wanted to know about your agency (see "Seven Strategies For Successful Agency Hook-Ups"). And have you ever wondered what your agency really wants? Well, to be valued for its brains as well as its beauty...and to be paid accordingly. Dan Bobear tells you how to work out a prenup to satisfy both parties (see "Creating An Agency-Client Prenup That Works"). And finally, to help you find the courage to change (more quickly), Lisa Flaiz of Avenue A | Razorfish, in an exclusive interview with 

, explains the nuances of pharma digital marketing and what things you might expect from it in the future (see "What's Taking So Long?"). A focus on online community is one of them. Bill Drummy, of Heartbeat Digital (see "Building Online Community") shares his experiences developing a 2.0 Web site for patients with Crohn's that benefits his client as well. 

 special projects editor. She can be reached at mdonahue@advanstar.com

Introduction

Pharma and ad agencies have enjoyed a long and profitable relationship, but now their worlds are changing. Can this marriage survive?

Introduction: Beauty and The Geek

Freud famously said it was more difficult to talk about money than sex. In the client–agency relationship the difficulty often boils down to just money.  

The problem often lies in trying to create an arrangement where the generation of ideas is valued (on both sides) as much as (if not more than) the generation of tactics. And the best place to start is negotiating a compensation model (compensation models vary widely, but generally fall into a continuum that ranges from a fixed-fee project basis to a full retainer). 

When developing a compensation model, determining the value of hours and tactics may seem easy, but how do you estimate the cost of ideas?  

What if you ask: How do I structure a compensation model that not only encourages great ideas for my brand, but also fosters them? The agency would do well to suggest these four guiding principles: 

 Negotiating the lowest hourly rate for agency services, or elaborate rebate schemes designed to drive down costs, may seem like a no-brainer, but will it get you what you really want for your brand? Labor costs are the single largest expense at an advertising agency. The agency's product is the people who work together as a team to generate ideas. The key to an agency's profitability is proper management of fixed costs (including labor) and staff utilization (hours worked and billed). Therefore, in very simple terms, profitability is largely driven by labor costs and the number of hours worked by employees. Assuming the agency wants to be profitable, driving down rates isn't necessarily the best thing for your brand. Unnaturally low rates can create a situation where it is more likely for the agency's brand team to have overworked junior staff servicing your brand rather than experienced marketing and advertising professionals with relevant experience and good instincts.  

 Meet and get to know the staff during the agency selection process. Learn about their experience.  Look to see if the right chemistry exists between client and agency teams. Ensure the contract includes a staffing plan. The plan should include relevant staff information: experience, how much time (percentage) will be spent working on your business. Under the ideal structure, certain key staff will be dedicated to your business so they can become product experts and know brands as well as your brand team. Once the right team is in place, it is essential to let them know they are not "taking orders," but are critical members of the team and stewards for the brand. Keeping up morale is as important for the agency team as it is for your brand team.  

 Many believe that including time for strategic management in the agency's scope of work is like paying for people to stand around a water cooler talking about last night's game. In truth, senior talent at the agency need to be paid to strategize about your brand. It's not just about what the next sales ad will look like. That said, don't hand over a blank check. Hold regular meetings with senior agency management—strategic summits, brainstorms, and workshops—to ensure the collective team is on track and driving the brand's success in the marketplace.  

Focus less on number of hours billed, and more on efficiency

 Often more attention is on the number of hours billed than on the quality of work. The latter almost always leads to higher-quality work at a lower cost. Focus more on how the work is moving between client and agency. For instance, from the agency perspective, it is important that the right people with the right experience are creating and reviewing the work. Conversely, clients need to focus on how well they are managing feedback and work changes, as well as the efficiency of their legal and regulatory review process. Focusing on the way the work is created and moving between client and agency is the best way to create the greatest value in the relationship. 

is executive vice president and managing director of client service at Palio, an inVentiv Health Company. He can be reached at 

Feature

From the agencies point of view the beginning of a beautiful relationship is based on negotiating a successful compensation structure

Creating An Agency-Client Prenup That Works

When Ally Bain, a teenager with Crohn's disease, was denied access to a restroom in a Chicago clothing store (even with a card detailing her medical condition), she had an accident. She also vowed to prevent others from having to go through such pain and humiliation. She took her cause to the Illinois state legislature, which passed "Ally's Law," giving people with debilitating intestinal disorders access to any business restroom. 

Ally told a powerful story for an underserved population, the right people listened, and the results were substantial. Her story garnered an even wider audience on 

, a Web 2.0 site developed by Heartbeat Digital and sponsored by UCB Group.  

Initially launched as an unbranded site, it now highlights information on UCB's Cimzia (certolizumab pegol), a biologic that received FDA approval in April for adults with moderate to severe Crohn's disease who have not responded to conventional therapies.  

Crohn's disease is a chronic, inflammatory bowel disease that affects more than one million men and women worldwide.  

The marketing challenge was to deliver a 2.0 Web site, 

, that offered community and supplied patients with goals for living a normal life. The Web site includes videos of Ally Bain and other Crohn's patients (and their doctors and family members) telling their stories about surviving, and even thriving, with the condition. It also includes information on the 50-state advocacy program created by the agency to spread the word. 

For the client, UCB Group, the challenge was to build an initially unbranded Web site that would yield a significant database of highly qualified patients. The database and the Web site could then be used to communicate with patients about the company's new treatment option. The secondary goal was to introduce UCB Group, with headquarters in Brussels, to US patients, and to position them as a patient-centric company.  

Database acquisition goals for the first year were met two months after the site's launch. Currently, the number of database patients stands at eight times the original goal. Engagement goals also have been positive–the length of stay for unregistered users is more than twice the industry benchmark, for registered users, it's more than four times. 

In creating the site, the first step was to analyze Crohn's disease space online. Not surprisingly, it was heavily populated with sites (both branded and unbranded) for treatments, along with national associations and patient advocacy groups. These well-trafficked sites offered abundant, well-crafted information about the disease. Further analysis, however, showed the average length of stay for these sites was low–below the pharma industry average of about four minutes. So although these online options appealed to users at first, the content wasn't compelling enough to warrant sticking around. On the whole, the stories being told were undifferentiated—not 

On the other hand, further searching uncovered a small Crohn's-specific UK-based Web site that bucked the trend with an impressive average length of stay of about six minutes. It was the kind of site that would not have been on anyone's radar as a key competitor, but it clearly warranted a deeper look. 

In the end, what made the UK Web site unique was something recovery groups have known about for years—nothing is more powerful than two or more people with the same disease in a "room" sharing their problems. The UK site offered community (albeit rudimentary) to Crohn's patients, which was what was driving the engagement. Subsequent one-on-one research with patients confirmed that the ability to connect with others was a deeply meaningful differentiator for people with this socially debilitating condition.  

A study of patients' online discussions also yielded several key, actionable insights. For example, analysis showed that while the majority of patients were seeking advice on dealing with the condition, there was a strong and vocal group of advice givers. Users also seemed much more interested in information on how to live their lives as normally as possible than in specific treatment content. This was crucial to telling the Crohn's story in a new way. To be effective, any messaging to this group had to focus on practical, day-to-day advice for coping with the disease before working in themes of how a treatment might help them to better cope. 

 is Chairman and CEO of Heartbeat Digital. He can be reached at 

Web site supports Crohn's patients and supplies goal-busting database for company's new product

Building Online Community

To find out what was happening at healthcare agencies at this crucial point in time for the industry, we interrogated 25 executives at some of the nation's most successful agencies and networks. We didn't want to know about their campaigns, or even about their agencies per se (that information can be found on their Web sites, listed here). What we wanted was their insights into the rapidly changing landscape of pharma marketing.

Click a name to read more about each executive:

 

Scot Cotherman, Corbett Accel Healthcare Group

Robert Finkel, Kane & Finkel Healthcare Communications

Kristin Keller, Compass Healthcare Communications

Click for the list of questions asked to each executive

Interview

To find out what was happening at healthcare agencies at this crucial point in time for the industry, we interrogated 25 advertising executives at some of the nation's most successful agencies and networks

Agencies Are Talking About

People are always saying the agency–client relationship is like a marriage, but really what it's like is an 

Consider: When I lived in New York, I had a close friend who had grown up in an orthodox Sephardic Jewish family. David would often say he was convinced that the arranged marriages of his parents' generation worked much better than all the dating, breaking up, and agonizing of modern, romantic relationships. Back then, the parents from both sides talked endlessly about possibly compatible couples. When they thought they had found one, they would introduce them. After a few chaperoned sessions of tea drinking, the young people were expected to commit to one another or to reject one another. And if they committed, they had to make it work.  

If you think arranged marriages could do with a little more mystery, you'll love conventional agency pitches where you send out a request for proposals and wait for some agency to come back with that Eureka idea. 

Use recommendations and introductions from people you trust, by all means, but chances are that you will end up pulling a few names from some directory or from the purchasing department's roster of suitable agencies. Here you are then, meeting over coffee. Are you going to tell these strangers everything they need to know about your business, your priorities, your constraints, and your competitors? Are you going to mention the suspected weight-gain problem in the unpublished Phase III? The CEO's fondness for publicity stunts? The marketing director's predilection for releasing money in October that has to be spent by the 15th of December? What about your colleague who left after Italian authorities found out that he had bought a villa for the head of the patient association?  

If you don't tell them the whole truth, expect lots of good but useless ideas to come back. You will have an agency that explains, very sensibly, that you don't need a media campaign or eye-catching events, that most patients in this category can be targeted efficiently through a joint electronic outreach with patient associations.  

They will then spend a couple of hours setting out the details of their campaign, including a reward of a monthly box of chocolates for everyone who remains in the compliance program.  

If you do tell them the whole truth, expect the rest of the market to know within a few months. Agencies take confidentiality agreements very seriously, but many agencies have 40 percent staff turnover each year, so the eager young account executive who pitched unsuccessfully for your business finds herself pitching to your main competitor in a few weeks time as part of her next job.  

It would be almost irresistible to point out to them that they might have a major advantage if they focused on the dangers of weight gain. In the unlikely event that you discover how your competitors got a preview of the unpublished data, are you going to track her down and sue her?  

Besides the problems with confidentiality, do you really have the time to sit and brief five teams on everything they need to know about your product and your market? It took you months to figure it out; do you think you're so dim that a team of strangers will be able to do it in a couple of hours? 

Like an arranged marriage, you'll get to meet the family before you commit to an agency contract. Unlike an arranged marriage, you may not find out who you're marrying until some time into the honeymoon.  

This seems dishonest, but actually it is a result of what purchasing departments have done to agency economics. The rule of thumb is that each front-line agency employee has to earn 3.5 times their salary for a public relations or communications agency to make an overall profit of 10 to 15 percent. (For ad agencies, the sums are different but the rules are similar).  

Whether you see it or not, every six-minute increment of the employees' days will be recorded on a time sheet somewhere. If you are not billed directly for the time, your retainer will be set and adjusted based on how much of each employee's time is allocated to you.  

The problem with the agency model is that agencies cannot make a profit off senior people. A good, but not stellar, vice president is probably earning about $250,000 a year. Do the math: if this medium bright star is willing to forsake family, leisure, and any other interest, he might manage to do 30 billable hours a week—he cannot charge clients for the time he spends on replacing the low-paid staff who keep leaving; fixing stuff that some college leaver has just screwed up; scheming to get his boss's job or, of course, new business. To make a profit, the agency needs to charge that time at about $550 an hour.  His boss needs to be charged at $1,000 an hour if she is to justify her salary, and most importantly, get her bonus. In a well-run agency, someone will have tracked how many hours and how much cash it cost to win your business, and that will have to be paid back over the first year, on top of the expected profit. In a badly run agency, someone will be getting a new- business bonus that comes from the same source. 

Most clients in the United States cap billing rates at about $300 an hour. In the old days, the difference could be made up through ad agency commissions (media owners paying 15 percent of the cost of space back to the agency), through mark-ups of out-of-pocket expenses, or through generous retainers.  

As the client, your company now employs a purchasing department to make sure that none of these things get slipped into the contract. The only way for agencies to make up the difference is by rationing access to loss-leader senior time and by selling lots of highly profitable junior time. A new account executive might be on $65,000 a year. He has no management responsibilities (and isn't allowed a life) so he might bill 45 hours a week. He becomes profitable if he is billed at $100 an hour. If every hour is rebilled at $150, that means almost $50 an hour in extra profit for the agency. The agency wants lots of those hours.  

At the pitch, you may try to find out "Who will actually be working on my business?" The head of the account group will assure you of her lifelong interest in irritable bowel syndrome. The account director will tell you that—by amazing coincidence—the product he has been working on has just gone off patent so he is ready to commit heart, mind, and colon. The creative director, sipping a prebiotic yogurt drink, will tell you that he has always wanted to work on IBS.  

Even if all that is true, economics mean you will usually get to talk to the young man in the back who is inspecting your display cabinet of acne gels. So long as you enjoy working with enthusiastic young people who are willing to learn, you're in luck. 

If, after all this, you decide this no longer is a suitable, or workable, model for the 21st century, then here are seven strategies that 

1 Pick an agency that knows your business.

 You probably do not have time to train a team in your therapeutic area: If you are working in cardiovascular disease, you will have a wide choice; if you are working in pediatric vaccines, you will struggle to find three teams to pick between (once you have ruled out those working on directly competing projects). Get the agencies you are considering to tell you what they know. Only the most pathetically inadequate will send you a bad set of case studies or an irrelevant set of bios.  

Instead, ask for a couple of hours to meet (or talk on the phone if you want to be really considerate of their time). Tell them not to prepare anything formal, but to be ready to talk about the big issues in the field. Say you're not expecting answers, but an appreciation of the problems and opportunities and some idea of the processes that they will use to think them through. Tell them that you will run the discussion, and that everybody who is invited to the discussion from their side will be expected to contribute. If you're not comfortable doing this, enlist a colleague who is (most senior people in medical affairs love chairing discussions).  

Then make sure you listen. They'll try to get you to talk, because many of them will think that their job is to tell you what you want to hear. Play the strong, contemplative type—at least for a couple of hours. Ask open-ended questions and explore their ideas, but don't tell them what you are thinking. (You will need to do this separately with each group that you are interested in—no one will discuss their real insights in front of the competition). You'll see who really understands the area. You won't yet know whether the people who impress you will actually do the work for you, but usually you'll know who you want to work with. 

 If you want to convince dermatologists to stick with proven treatments, you need one mindset; if you want to mobilize patient groups to participate in hunger strikes, you need another. If you can, find an agency that knows the therapeutic area and has the right skills. If not, it is easier to pick up a new set of category learning than to develop new skills. You might not feel qualified to judge, for example, how good an agency is at patient group relations, but approach it with the same method: listen, question, play stupid if you need to, and decide how much they really know. 

 If you have time, do what a client did to me years ago: She awarded three small projects to different agencies, and said that she would review things in six months. She did not commit to consolidating but, in the end, she did. Six months was long enough for the two big agencies to assign their usual team of bright adolescents—the client later told me that the final straw with one had come when an earnest young man told her, very confidently, that it would cost a lot to "translate into Indian." Because the contracts were not explicitly linked to a big future opportunity, they slipped under the new-business radar systems at the agencies, and she got to see what working together would really be like. One of her tests was how well the agencies worked together—she figured that those who focused on blaming a competitor would probably blame her or her colleagues for future problems, while those who found the solutions to collaboration problems would behave the same way when they had all the business. This gives you the freedom to try smaller, newer agencies that seem good but don't have a track record in delivering. 

If you don't have time to follow the dating model I've suggested above, give each shortlisted agency a small, well-defined task and pay them a reasonable amount to propose a framework for handling it. Tell them that you may or may not assign more work to any team that impresses you. You will then own the answers and can use them as you see fit. Again, you will short-circuit most agency new-business systems—this will be treated as a paid project and you will get the teams that real clients get. For example, you might ask for three innovative ways of activating men with IBS who are willing to talk to a doctor. Ask for them to be explained in detail and cost, but say that you will not decide between agencies based on the quality of the creative materials; good creative thinking takes lots of trial and error. Nor will you expect them to approach third parties on your behalf. You will get a flavor of working with each. Call the most junior person listed as working on the project to discuss the ideas soon after you get them—do it without warning. ("I just wondered if you had a minute to clear up a few questions?") Then schedule a proper team discussion. 

While the agency is in new- business mode, they will do all they can to give you access to senior people. If you have trouble getting through now, expect big trouble later. (You should be a bit more tolerant with staff who explain to you why they were difficult to reach, and if the explanation involves prioritizing existing clients.) 

6 Use a consultancy contract, not an agency one.

 Award an agency (or several) a job, not a marriage. Their job is not, for example, to do anything you might ever need on IBS; rather, it is to help you to grow the market, reaching a target of 20 percent of patients getting physician consultations within 18 months, with a budget of up to $2 million. You might award the same agency several different tasks, but be clear that each will be evaluated separately.  

In general, you want to pay more for senior staff, less for junior staff, and almost nothing for overhead. Our consultancy has a model where we can make money selling the time of very senior consultants for about $600 an hour. We make this affordable to clients by not giving lots of work to junior staff who have to figure it out on the job—it costs less to pay for three hours at $600 than 20 hours at $150. Many of the things that junior agency staff know how to do (bulk e-mailing, for example) can be done more cheaply and more efficiently by administrative staff or contractors. In an age of virtual teams, agencies do not need slick offices in big cities; if they still have them, you're footing the bill—the more opulent the meeting room, the less senior staff time you will get. 

Review progress on each contract at a meeting every quarter—follow it with a quick e-mail restating what you are happy with and what you're not. The former will motivate the team; the latter will help them get better. If one task is going wrong, assign it to someone else. When you need to change the task, change the agreement. This does not need to be a big legal amendment, just an e-mail setting out which of your expectations have changed and what the implications are for the budget, including due dates, deliverables, etc. (Or get them to confirm these changes back to you.) If you want their blue sky thinking, add a contract line for "ad hoc counsel." Make sure that you get monthly reports on how far they have progressed toward their targets, and how much they've spent.  

Set out which individual will do what sorts of work—the young man with acne will probably do a very good job on meeting reports, but you want the superstar for your ad hoc counsel budget line. Be clear about who your day-to-day contact will be. Spend time with him or her one-on-one before you agree to the contact. It's not a guarantee about who will actually do the work, but it does make clear the expectations. When a significant person leaves, retain the right to end the contract within a reasonable notice period. This will enrage the agency, but is a perfectly fair request—the chances are you hired one or two people who wowed you, not some long-retired founder's vision. 

Most of all, remember my friend David's key point: If we make a decision to treat one another with respect and honesty, all sorts of unlikely alliances will work beautifully.  

 is co-chairman of Baird's Communication Management Consultants. He can be reached at 

Do you really know who you are hiring? Agency Insider Mark Chataway spills the beans on why the pitch doesn't work, and what you need to do before signing on

Seven Strategies For Successful Agency Hook-Ups

Pharma's relationship to digital marketing is as puzzling as a suitor who can't bring himself to pop the question. If he knows he's going to do it, why all the foot-dragging? 

"Companies are looking for someone to do it for them," says Michael McLinden, a partner at Mc|K, a healthcare advertising agency. "They want someone to say: 'This is how you build a virtual relationship with a patient; this is how you build a virtual relationship with a physician; this is how you make these relationships work for your brand.'" (see "Michael McLinden, Mc/K Healthcare"). 

Problem is, as many a shy suitor has discovered, if you wait too long, you might loose the prize altogether.  

"Pharma risks being left behind unless it recognizes the need for specialized sales forces and increased use of the Internet as a customer information resource," states a recent study, "Reaching Doctors and Patients Through New Digital Media," by the eHealthInsight series. 

The report goes on to say that while there's been a growth in physician and patient Web sites, there is a need to move forward from the traditional company Web site and actively engage with customers—physicians and consumers alike. "Social media and blogging forums are potential opportunities. And mediums such as podcasts and live video-detailing are currently underutilized."  

So what's holding pharma back? To find out, 

Pharmaceutical Executive's Agency Confidential 

tracked down digital marketing expert, Lisa Flaiz. Flaiz is vice president, group director and national pharma practice lead with the Philadelphia office of Avenue A | Razorfish, an interactive marketing and technology services company. We grilled her on what the future holds for pharma online. 

				 Pharma is finally going digital is a statement being bandied about these days. And yet the 2007 industry spend numbers tell an entirely different story. What's really going on?  

The tracking isn't sophisticated enough to pick up on what people are spending on big content-integration sponsorships: what people are spending on search. A lot of dollars are not being reported. Nonetheless, from a trend perspective, when you hear a statement like that and then see the spend numbers actually going down, it is a little concerning. 

Still, you have to consider the big picture. In the pharma space in general, DTC spend, no matter what channel we're talking about, is going down. So, I think, part of the trend is following an industry pattern and not necessarily a channel pattern, if you will.  

The other problem with the statement is that the marketing mix models are not sophisticated enough to keep up with newly available channels. So when marketers are trying to make decisions about where to spend their money, and how to allocate their budget, they have a really hard time with decision support tools that say, "Move your money online." The models aren't there yet. Thank God there are people like Rex Briggs who continue to evolve and push that space. 

He's one of the analytic gurus in the arena who has really pioneered some of the ways that we begin to measure return on investment and, in fact, he's recently begun to evangelize the term ROMO, return on marketing objective. 

What's the difference between ROI and ROMO? 

Return on marketing objective allows you to look at very specific E-performance indicators aligned with your goals, with your objective. It doesn't always have to be a hard, lifted script-type of number because your objective could be something completely different. 

Do you mean engagement, and driving physicians and patients to the Web? 

Absolutely, and what you're also starting to see now is a trend toward marketers believing that a brand can be established online. That's a really, really slow evolution in pharma. 

What would establishing a brand online entail? 

At one time the emotional engagement, or the big idea, happened off-line, primarily on television. But today the big idea can happen on any channel, and every channel has the ability to engage your customers emotionally. There used to be an argument that TV was sight, and sound, and movement. And it was the only medium that could touch all three senses. Well, that's not true anymore. All this stuff—the engagement—can happen online, and, it can happen in a long form. Thank God, because who's got the time to tell the full story about a pharma brand in 30 or 60 seconds? You need that long form. 

Every channel is becoming action-enabled now. It helps to lead your customer down a funnel, along that customer communication journey, if you will, to the point where they're ready to take an action. Your brand can stand for something. And you can have that experience happen online now. That's what you're starting to see marketers understand. 

Marketers have come a long way in the number of years I've been working in the pharma online space. Things have changed dramatically. Back when I started, my client was basically an IT guy. He didn't have a marketing bone in his body. Now the Internet is an integrative part of the marketing mix. It's not an afterthought. There are people on the brand team that have experience with online marketing, maybe not expertise, but at least exposure and experience. Clients will come to you and say, "I know what I need to do. I understand approach, but..." They are not as far along as they are with some of the off-line tried-and-true tactics. It still takes lots of pushing, of saying, "Alright, I get your challenge. Here's the solution we recommend." And then there's a lot of discussion. We work together. We work collaboratively with the other agency. Then we partner with the client, and eventually we come to something that we consider a strategy and hopefully an integrated program, as opposed to a tactic. You can't build a Web site and call that a strategy, that's a tactic. 

How can nontraditional media and cutting-edge technology extend the reach and frequency of traditional marketing? 

We're in a pharma world right now where the overall effectiveness of the sales force has declined dramatically for various reasons. There's a real need to start looking at alternative channels for reaching position. I think there are plenty of companies out there who are doing that really well—companies that focus on E-detailing, companies that focus on hand-held marketing, and companies that focus on kiosks at conventions, and things like that. What's really needed is to work with an agency that has a command of physicians' habits when it comes to information-gathering and consuming media, and who also has kind of a deep familiarity with those various channels. Then the sales force can be complemented when you find its effectiveness is declining every day. In many cases a hurdle in the pharma space is the heritage of being a sales organization. Some pharma companies have a hard time getting their heads around what marketing a drug looks like without sales. A forward-thinking agency is needed to push you along and show you what an integrated communication plan to a physician could look like, and to help pursue new venues for getting messages out to them. 

What does social networking look like in the pharma  industry? 

We're starting to see people dip their toes in, and folks getting a little bolder with it, which is nice. So social networking is a really interesting place. Of course, the trouble everybody has is there's no such thing as guidance or governance for it, yet. But in Internet marketing or digital marketing, et al, I think FDA is not going to go too far. It's unlikely they will take a proactive stance in regulating the use of emerging technology or social media. Being the FDA suggests they'll take a wait-and-watch approach. 

Hopefully, what pharma companies are doing right now is working on some sort of corporate guidance around how they're going to play in the social media space. Inconsistency is what's going to call attention to the industry and get us in trouble. 

Gardasil has a page on Facebook. I love that. And there are plenty of online communities around particular disease states that are now being generated within popular social networking sites like 

. So you are starting to see them. But you  have to treat it like you do any other promotional channel. You have to make sure that your information is balanced; that you're transparent; that you're adhering to the commercial regulations that apply to any other channel. It has to go through your medical, legal, and regulatory review. You have to file it, with the FDA, upon first use. So pharma companies really need to understand how they're engaged in these media. You have to find the appropriate resources to put toward managing, say, a blog or any of these newer channels, and that takes a cultural shift. That's going to take some companies being bold.  

Johnson & Johnson's BabyCenter comes to mind. Is that an example of what you're referring to? 

The BabyCenter was well ahead of its time. That's social marketing before we knew about it. It's a wonderful site. The thing you need to remember as marketers, pharma or not, is that connected users are shaping your brand right now. This is how your brand is going to be defined, and, as a marketer, you want to have some control over how your brand is used.  

So the Internet is not just a direct response medium anymore? 

Certainly not. It's no longer a one-way messaging medium to the marketplace. It's becoming a two-way dialogue with customers. 

Has the prospect of losing control of the message online been a stumbling block for pharma? 

It is both the beauty and the curse of it. You have to let go and be willing to cede some of that control over to the consumer. What you can do, however, to keep some of that control is to manage the distribution of your content. You can't think of your Web site or the Internet as just a destination tactic anymore. It's really about distribution. If you get your word out there and distribute it through whatever—YouTube, Google, video, syndicated content—the better chance you have of becoming part of and having that conversation based on the credible, accurate, and balanced information that you provide as a company. 

Are some distribution vehicles better than others for pharma brands? 

Video is going to be a huge opportunity for pharma. It's not realized yet because pharma hasn't realized they have to take on the role of content creator. They have to start producing video. We're not talking about 60-second commercials; we're talking about long form video now. What you're going to see is marketers having the same entrepreneurial spirit that Proctor & Gamble had in the 1930 swhen it created the soap opera. They are the ones that are going to really leverage this video opportunity. It's going to become episodic. We're not going to see 60 seconds; we're going to see serial programming. 

Are there any current examples of this serial video pharma marketing? 

You might find some examples with the media companies, or some of the publishers out there. There are syndicated video that allow for custom sponsorships and some custom advertising. You're starting to see some pharmas take advantage of those from a third-party perspective, but I'm not personally aware of any kind of episodic video that's the kind of thing I'm talking about. I could be missing something. Centocor did a two-hour feature film last year. It was called INNERSTATE. I don't really think that's a sign of things to come, but it was pretty cool. 

There seems to be a real craving on the part of patients for real information, not hype. Do you think that is true? 

Patients want to hear the real story: It's like, "Don't tell me about relative side effects. Tell me about the side effects to being an actual patient." The modern, branded opportunity is one in which marketers can supply compelling content that's entertaining but also engages the viewers with their brand's core values. And it's not about putting a 30-second or 50-second spot online. It's exploiting the opportunities of the Web. It's aligning the content and the format with the behaviors of that audience and creating something of value. Technology executives know they're on to something when Google shows up as a competitor. So back in February when Google jumped into the online health information market, which is the Google Health data, some of the other companies out there—Health Central and Revolution Health, and other newcomers to the market—probably got a little nervous. Anyone would be nervous if they thought Google was going to swallow them up. 

Not everybody's figured out how they want to serve users. They haven't quite figured out their business model. But a lot of them are focusing on community, I can tell you that. 

It's about finding ways to create consumer advisers, if you will, or consumer online opinion leaders. They're trying to find a way to harness the power of community. They're getting people with like-minded values in the same place. I often point to the MS category as a model of the right type of relationship marketing. All the drug companies that sponsor those sites do a great job. MS is a small population. When you look at where the best communities online are right now, it's small populations. It's hemophilia, it's rheumatoid arthritis, it's MS. It's rare diseases and specialty physician populations. 

It's funny because a lot of times people think, "Oh, can I really use the Internet to reach my audience? My audience is so small. I'm not heart disease; I'm not depression; I'm not cholesterol; I'm not one of these big GERD-type categories." But that's the community role. The real heavy players are in these smaller communities, these smaller populations scream opportunity for community. You only have 2,000 people? Get them online. 

I think the next thing is for pharmaceutical companies to hold or sponsor dedicated blogs directly. So you brand a blog that discusses the appropriate use of a product. This is no different than what they do now when you call their 800 number. The next step is establishing a dialogue between consumers and a company's medical experts that creates an opportunity for the industry to dispel some of the mistrust that's built up in the public's perception. I hope there are some folks out there who think we're going to a place where the next step is that we can have some sort of open dialogue with our constituents. And, you know, it's not going to happen in 2008. Open forums are still very, very scary. People bring up adverse events all the time. People bring up off-label issues. But I feel as long as there's a plan, people are trained in it, and you know how to handle it, someone's going have to take that wild leap of faith.  

At a time when current sales and marketing models are unsustainable, pharma is still slow to adopt online opportunities

What's Taking So Long?

We asked the executives the following 9 questions. The surprise was how generous and forthcoming they were with their answers. We only wish we had more space so we could have printed everything they had to share. Instead, we culled the most cogent and timely of their comments and put together a kind of "Facebook." We believe it makes for interesting reading as well as being a useful guide to what the thinking is behind the agency you might be considering.

 In the past advertising agencies meant creative. Now it seems creative is implicit, and agencies are being asked for a broader range of services. What do agencies have to offer clients?
 

What is at the top of your list of things companies should do to promote their brands more effectively, and responsibly?

Is pharma's tightening its belt affecting the way it's doing business with agencies? Is pharma asking for more, and wanting to pay less? How do you deal with that?
 

The industry says it's finally interested in Web 2.0, but the spend-online-numbers for 2007 don't agree. What then do clients really want, and how do you advise them?
 

 What is an agency's responsibility when it comes to being cognizant of and complying with regulations?
 

As companies increasingly look to biologics to feed their dwindling pipelines, what new challenges will these medicines pose for agencies?
 

What are one or two things you know about pharma marketing that companies don't seem to be aware of?
 

What will healthcare advertising look like five years from now?
 

What should a client do to get the very best value out of working with an agency like yours? 
 

Executives in the story were asked nine questions.

Pharmaceutical Executive-06-03-2008

Richard T. Minoff, Dorland Global Corporation

Introduction: Beauty and The Geek

Creating An Agency-Client Prenup That Works

Building Online Community

Agencies Are Talking About

Seven Strategies For Successful Agency Hook-Ups

What's Taking So Long?

Agency Questions