Medical marketers bobbed and weaved their way through a largely unpredictable 2021 and achieved record-breaking revenue. Then came 2022’s not-quite-post-pandemic reality, marked by COVID-19 variants, capricious quarantines and the general feeling of “being done with” the virus — even if it wasn’t yet done with us.
But the so-called crossover year went well for the industry. With many of the more disruptive COVID-era restrictions receding into the background, healthcare marketing firms and health-focused consultancies felt emboldened to reacquaint themselves with their martech stacks and recommit to creating omnichannel experiences for doctors and patients.
Not that everyone made it through intact. Each year, MM+M surveys the industry on its performance, basing the Top 100 list on those companies with the highest North American revenue. This year’s survey, fielded between January and March, reflects a shape-shifting group. Nearly a quarter of last year’s honorees fell out and were replaced by new members, either because they didn’t meet the revenue threshold or because they were swallowed up by bigger rivals.
Revenue on cue
While healthcare marketing budgets were down last year (according to MM+M’s Healthcare Marketing Trend Report survey), that didn’t lead to across-the-board biopharma belt-tightening. Combined 2022 revenue for the Top 100 firms rose 12% to $9.6 billion — a new record — versus the prior year’s adjusted level of $8.6 billion.* Staff counts, meanwhile, surged a collective 34% to 37,677, from 2021’s adjusted tally of 28,129.
That marks a third consecutive year of double-digit growth in both billings and head count. While there was no slowdown in clients willing to pay for agency services, there was a decent-size redistribution of marketing wealth, with 23 new companies rising into the A100.
Aside from some budget pullbacks, companies were dealt a fresh brew of post-pandemic challenges in 2022. They ranged from macroeconomic headwinds to biotech downsizing. Slower clinical recruitment delayed drug launches, while the flattening of clients’ R&D spend led, ultimately, to one multibillion-dollar sale to private equity (see Syneos Health, p. 156).
Notwithstanding the pandemic’s colossal and heart-breaking toll, the medical marketing sector appeared to have skirted the worst effects. And as COVID-19 fears eased, firms doubled down on areas such as personalizing their HCP and patient engagement.
The service mix
When asked to break down their revenue, agencies once again reported that web/digital/mobile work for professionals and consumers brought in the most money. They were followed by promotional medical education, which moved up two spots and pushed sales materials back to No. 4. Rounding out the top five was marketing research, which held steady percentage-wise (9.5%) but
slid a spot.
Digital work has grown in sophistication of late, with biopharma and medical device clients striving to forge one-to-one online relationships and deliver the right message at the right time through an omnichannel lens. Speaking of which, work related to user experience (UX) accounted for 4.4% of the Top 100’s total service mix, good enough for eighth place.
As to med-ed’s rise from fifth place to third, chalk it up to the return of in-person tactics such as product theaters and dinner meetings to a hybrid HCP approach blending physical with non-personal. On a related note, work involving medical affairs — widely regarded as a bridge between the commercial and medical sides of the house — debuted at No. 7.
Among the other risers and fallers, journal ads and consumer print ads dropped three and four places, respectively. Payer marketing fell two spots to land at No. 10. And consumer broadcast, which had heated up in 2021 and climbed three rungs on the ladder, held its ground at 4.2%, although it fell from eighth to ninth place.
Marketing research’s top-five showing wasn’t the only indicator of the industry’s greater emphasis on measurement. Eighty-eight percent of respondents said they expect to tap insights from data scientists to a greater extent this year (versus 78% in last year’s survey), while 93% said they expect the focus on ROI and artificial inteligence to intensify.
Closely aligned with the revenue mix is the source of agency growth. Given the principle that customer retention is cheaper than customer acquisition, the ratio of organic to new business wins is always a closely watched metric. Respondents told us they netted out on the right side of that ratio, with a 60% to 33% breakdown, dropping slightly from last year’s 64%/35% split.
The emperor of all challenges
While interviewing execs for the Top 100 profiles, we heard the usual grumblings about the tight labor market. Still, the industry seems to have emerged from the supposed Great Resignation mostly unscathed.
If anything, the 2022 survey revealed a closing of the staffing gap. Talent acquisition and retention registered as respondents’ biggest bugaboo last year, with 47% citing it as “significant” and only 8% saying it was “minimal.” This year, those results flipped, with 15% calling it “significant” and 33% “minimal.”
Before we declare that respondents are having an easier time filling open roles, however, consider that 9% cited “managing growth” — i.e., matching head count with new business — as a significant issue, with 32% calling it a minimal one. That’s an incremental worsening from last year’s 8%/21% split.
What’s more, many companies are struggling to not only staff up for growth, but also diversify their ranks. Hiring in a way that fosters diversity, equity and inclusion is exceedingly hard — just ask the 6% who framed DE&I as a “significant” challenge. Still, there’s reason for optimism about these efforts: 55% characterized this as a “minimal” issue in 2022, versus 39% in 2021.
The survey results also reflect agencies’ changing workplace norms. Ninety-five percent of the Top 100 said they allow staff to work from home, down slightly from 97% last year. Meanwhile, 90% noted that they offer mental health support as a benefit, up from 88% a year ago. Other COVID-era perks that have endured (though lessened) include stipends to cover office expenses (36% versus 49% last year) and childcare (27% versus 40%).
But not all aspects of the COVID-19 response have continued. Only 16% of firms have maintained their vaccine mandate, versus 45% in 2021.
Perhaps in anticipation of the federal government lifting its Public Health Emergency declaration in spring 2023, agencies reported that they’re much less nervous. Less than a third (29%) said they expect to be dealing with “ongoing fallout from the pandemic” this year, versus half of respondents last year.
With trends such as personalization (98%), better content experiences (96%), digital experimentation (87%) and specialty drugs (77%) all eliciting strong responses, the data point to an industry playing to its strengths. That said, with the share of respondents still grappling with “shrinking pharma budgets” on the rise, marketers will be keeping a careful eye on finances the rest of this year.
* Revenue and head count totals are based on data that companies submitted as part of MM+M’s annual agency review and reflect the agencies in the Top 100. Data are taken from the annual agency reviews and supplemented by estimates made by the MM+M data team, and include numbers from certain firms that had been unavailable in 2021. Revenue and employment numbers for parent companies and certain network-owned firms were accounted for to prevent double-counting in these totals.