When the cost of drugs is discussed in the lay press, in government and in corporate boardrooms, marketing is the tactic most often perceived to be an avenue for savings. It is, therefore, more important than ever to reassess the cost of marketing.
By adopting a totally integrated marketing orientation, as opposed to a purely sales-driven model, the pharmaceutical industry could save billions of dollars in resources while improving the impact of its promotion. Such a shift would require changing the mindset of senior management, sales reps, product managers and market research support teams. Of equal importance is the need to assess the roles of detailing and television which together account for approximately 78% of pharmaceutical promotion costs ($14.9 billion). Establishing a proper promotion mix will create significant efficiencies.
The first step to success in optimizing the proper promotion mix is developing the correct selling statement that can be leveraged across multiple channels. There is a direct relationship between the retention of a compelling message and an increase in sales, and the importance of a simple message cannot be overstated. A concise selling statement is easier to incorporate into promotion, less expensive to support, more memorable and, therefore, more effective in changing attitudes and increasing prescriptions.
A critical observation needs to be made here. Many brand managers craft involved message platforms and believe that it is crucial that the physician retain all of the statements that comprise the platform. However, it is important to leave “BOB” (bundle of benefits) out of the key selling statement. This is not to say that a “story” should not be part of the promotional effort. It is critically important to bring multiple features and benefits to the forefront in order to effectively sell the brand. At the same time, however, the objective should be to develop a single selling statement that serves as an umbrella under which supporting statements fit. This is what creative agencies are paid to do. If done properly, the umbrella statement enables minor forms of promotion to leverage the major tactics at a fraction of the expense.
The next step in optimizing a promotional mix is leveraging. This means using support promotion to magnify the effect of the major forms of promotion that form the backbone of the plan. The concept of leveraging should be at the heart of every good marketing plan. For example, the impact of a networking event, such as a dinner meeting, can be extended by as much as three and a half weeks with waves of direct mail follow-up, reminding the physician of the key messages.
Well-documented media mix models for established products, confirm that by adding additional, less expensive non-personal promotion to detailing, message retention increases by an average of 15 percentage points.
Another illustration of the importance of leveraging is the use of sales aids in the course of a sales call. Message retention is 12 points higher when the sales aid used during a call is recalled by physicians.
Why is this the case? The use of the sales aid connects the sales call to non-personal support promotion, and vice versa. On the one hand, use of the sales aid adds both sight (sales aid) and sound (sales representative) stimuli to the detail in communicating the message. On the other hand, the continual flow of sight stimuli (e.g., advertising) connects it to the detail. The sales call and the ad work together to communicate a consistent message. The combination of detailing with a sales aid and with advertising provides a 23-point lift over detailing alone, bringing message retention up to 44%.
This leveraging concept also works in DTC promotion where combining consumer magazine advertising with television commercials increases message retention from 9% for TV alone to 25% for television plus magazines. Of extreme importance is the fact that leveraging can work only when the support tactics use the same illustration and branding message used in the major form of promotion.
Marketing is a game of exposure. It is essential to get more exposures to your brand message than the competition gets from its brands. The higher the level of exposure, the greater opportunity the brand has to cause the changes in behavior that will lead to increased prescriptions, recommendations and sales. Marketing mixes are created to maximize that opportunity, both for the individual physician and across an entire target audience. Keep in mind that individuals may respond more actively to some tactics than to others. For this reason, it is necessary to apply “relative values,” where tactics are indexed by their ability to deliver a message. It is critical to understand how those relative values can impact on the success of a chosen tactic.
Despite evidence to the contrary, many companies question the role and value of coordinated non-personal support promotion. Accordingly, little time is spent pre-testing the final execution. And, once the campaign is launched it is often under-funded. Even if a campaign appears to be fully funded, segmentation can lead to individual budgets that fail to reach the threshold of advertising effectiveness for individual targets. As a result, many campaigns perform poorly, reinforcing management's negative predisposition.
Consider journal advertising. Like a tertiary detail, journal advertising has as much as one-third the ability to deliver a message as a primary call, yet costs less than 1/150th of the call.
Furthermore, ACNielsen HCI research finds that:
■ Medical journals are the leading source of medical information for 76% of physicians.
■ 80% of primary care physicians are exposed to the pages of medical journals in an average week.
■ Primary care physicians are “high readers” of 6-9 medical journals on a weekly/monthly basis.
■ When reading these journals, as many as 90% will see an ad that is part of a fully funded campaign.
■ As many as 65% will correctly associate the ad's message with its product.
■ Message retention correlates with increased sales.
■ Use of the sales aid connects the ad campaign to the detail and doubles message retention.
■ Advertising improves detailing's ROI nearly three-quarters of the time and when it does, it does so by an average of 43%.
Despite the very strong evidence in support of journal advertising as a major component in the media mix, use of this medium has declined over the last six years as a percent of the marketing budget.
The DTC promotion mix
Television advertising makes up 70% of all pharmaceutical promotion with consumer magazine ads accounting for another 26%. ACNielsen HCI consumer/patient research studied 22 campaigns, covering 22,000 sufferers and six drug classes, and documented that the response to this promotion mix paralleled findings seen in the professional healthcare market: The majority of funding was typically allocated to the more expensive tactics with little spending set aside for the most cost-effective tactics. TV advertising, an expensive tactic, can be very effectively leveraged by less expensive consumer magazine advertising. Amazing as it may seem, consumer magazine advertising creates the same degree of awareness that television does, and at half the cost. The combination of the two doubles campaign recognition. Average message retention for TV advertising alone is 9%. When adding consumer magazine advertising to the mix, it nearly triples message retention to 25%.
These findings challenge the level of use of the most expensive types of tactics seen in many pharmaceutical brand marketing plans. Where the goal is to grow the market, and where the product's market share justifies it, extensive use of high-cost, high-value tactics may be warranted. But with most campaigns the industry would be well advised to test response to the proper balance of DTC promotion to allow brand budgets to produce more value by being shifted to less expensive, better integrated and highly leveraged campaigns. The opportunities for greater efficiencies can be measured in tens of millions of dollars.
Implications for future promotion
The pharmaceutical industry has been driven traditionally by sales; although other forms of marketing promotion are highly funded, in truth they are the neglected stepchildren of our industry. This strong sales orientation lags many years behind management trends in other industries, which have become markedly more efficient in “reinventing” themselves to be more marketing-driven. In reality, the personal sales effort is but one of myriad promotional tactics that can be employed in the successful marketing of a brand. Staying the course will only lead to continued profit compression and the external pressure that follow that scenario.
With that said, there is a tremendous opportunity for the industry to become significantly more efficient through a stronger customer-focused marketing orientation, with sales playing a lead role as part of the marketing mix. In this scenario, sales calls are one component of the mix with support promotion used to leverage its impact. Optimized marketing mixes will maintain and extend the impact of sales promotion at a fraction of the cost. If such an orientation develops out of the pressures under which the industry is currently struggling, the industry will save billions of dollars while maintaining or improving communication and its impact on actual sales. An integrated promotion mix can, and will, provide a much more efficient means of promoting brands—in place of the current model of multiple, often mirrored sales forces, that has led to the current situation where many states are enacting legislation to control, and even eliminate, promotion to physicians. Many physicians are already refusing to see more than one rep per brand.
The industry must reassess its approach to marketing. Strong evidence suggests that too much reliance is placed on detailing and television advertising. The time has come to adopt a customer-focused marketing orientation. By doing so, companies will save significantly while improving the impact and results of the overall promotional effort. The trend toward high degrees of segmentation can be accommodated by this fully integrated approach so that all elements of the promotion mix fully support all aspects of the marketing plan.
Pre-testing campaigns and their various elements is essential, and post-testing enables companies to manage the process for maximum response as each campaign unfolds. Although companies are beginning to downsize their selling effort, it appears little is being done to maximize the potential of the remaining sales effort. As research shows, the time has come for a major change in how we promote our brands to our target audiences.
C. Marshall Paul is president of ACNielsen HCI in Princeton, NJ
SIDEBAR: The effect of leveraging detailing with journal ads
A study by ACNielsen HCI for two industry trade groups, American Business Media (ABM) and the Association of Medical Publications (AMP), looked at two pharmaceutical products previously unsupported by journal advertising. The purpose was to document the value of medical journal advertising as a promotional medium. The results established the importance of determining the proper level of support promotion to achieve a positive sales response.
For Product A, results confirmed that the average class spending level for a strong campaign created awareness and increased product association. It took twice the average class spending level to increase message retention and change attitudes, and to produce a 10% sales increase that generated a positive return. Interestingly, at a higher level of funding, physicians perceived that they were detailed more often when in fact the documented call pattern was the same throughout. The data suggest that when a sales aid is used, it helps to connect the detail to the non-personal support promotion (in this case, advertising). Ultimately, when the physician sees the ad it reminds him/her of the detail, effectively leveraging the call with the journal ad.
This part of the study concluded that pre-testing the concept is a critical stage in leveraging. The first ad pre-tested well after research had showed that some minor adjustment needed to be made.
However, unlike the first brand, Product B's campaign pre-tested poorly and the recommendations were not followed. The campaign failed to raise awareness, communicate a message or raise sales at any spend level. In fact, early in the test, the messaging delivered by the sales force began to diverge from the message communicated in the ad. Early monitoring of the results assessed the situation and the campaign was pulled. Application of this knowledge would have saved the company $6 million had the campaign been fully funded and run nationally for a year.