Industry observers are often tempted to interpret the pandemic year from 20,000 feet, in terms of its impact on patient journeys, sales calls or elective surgeries. But an ecosystem-level assessment of 2020 belies the facts on the ground — namely, how well healthcare marketing agencies and consultancies performed amidst the cataclysmic change.

When the dust settled, most of these firms didn’t just survive. Despite the lack of in-person contact and a host of other business challenges wrought by COVID-19, many thrived. MM+M’s survey of North American healthcare marketing and communications firms and health-focused consultancies, fielded between January and March 2021, shows that the top 100 collectively enjoyed one of their best years.

Business performance

The once-in-a-century pandemic thrust marketers into a role no one had expected. As it turns out, supporting the industry that’s powering the country beyond the coronavirus nightmare proved lucrative. Revenue for the top 100 firms spiked in 2020 to $6.9 billion, up an impressive 19% from 2019’s take of $5.8 billion.

For what it’s worth, the top 100 agencies’ overall growth in 2020 bested that of 2019’s top 100 by 3% (although year-on-year comparison involving the top 100 is often an apples-to-oranges exercise, let alone after an anomaly such as 2020).* Counting the nine up-and-coming shops featured in “Ones to Watch,” the growth rate approached 20%.

One reason they did so well: The virtual terrain was new, but not entirely unfamiliar. For every firm that had to scratch together a work-from-home plan last spring, many others said they had already been sharpening their screen skills by coordinating among multiple offices and remote staffers.

Drug reps are now just starting to reach an equilibrium as they make their way back into healthcare settings. Nevertheless, firms appear to have acculturated to the 100% online environment. About 90% of survey respondents said their business was up so far in 2021.

Drilling down further, 32.5% said their business was up 0%-10%, another 32.5% said it was up 11%-25%, and a whopping 24.4% said it was up more than 25%. Only 10.6% said business is flat so far. And for the first time in recent memory of having asked this “how’s business so far?” question on prior surveys, MM+M didn’t record a single response of business being down in the current year.

It’s one thing for the industry to remain creative in a working environment dominated by Zoom, Microsoft Teams and Google Hangouts, but quite another to ensure staffing keeps up with growth. Here, too, agencies shined. Head counts among the top 100 surged 19%, to 28,624 from 2019’s total of 24,143, as talent managers embraced the advantages that come with being able to recruit people independent of geographic constraints.

Revenue drivers

As observed last year in this space, agencies by and large didn’t lose business as a direct result of COVID-19. That business was merely swiveling — or “changing shape,” as we described it then. While some firms experienced losses, the pandemic led to work helping clients reimagine communications for the altered promotional landscape.

Whether it involved retooling medical meetings and speakers bureaus for virtual consumption (and holding onto sponsorship dollars in the process), keeping drug launches on track despite reps not having access to in-person details with HCPs or figuring out how to ensure vital conversations between doctor and patient continue to take place, 2020 required a lot of client hand-holding. In this unstable setting, many fell back on established contacts. On average, organic growth contributed to 60% growth, survey respondents said, while new clients contributed the other 40%.

Additionally, much of the respondents’ work came in the usual places. Professional web/digital/mobile work, their biggest source of income in 2019, remained so in 2020. Making sure that rep-to-physician and peer-to-peer virtual interactions were as valuable as possible was just as crucial, if not more so, last year.

That recalibration first required fully grasping the impact on HCPs. Reps still play a critical role, but there’s more synchronization needed across omnichannel activity.

Looking down the revenue mix further, respondents said their second-biggest pathway to growth was consumer web/digital/mobile, followed by sales materials and promotional med-ed. All were unchanged from two years ago.

Where did billings shift? Consumer broadcast dropped from eighth to 11th, while consumer print plummeted from ninth to 13th. The fact that those two fell out of the top 10 may suggest one of two things: Either clients were channeling more resources into POC or other clinical messaging, or disruption in video shoots meant DTC became less about broadcast and more about providing patients with digital support to optimize telehealth visits or connecting them to market-access resources.

Challenges and trends

In terms of the biggest challenges going forward, it’s worth noting that most of the top 100 firms anecdotally report having successfully used remote work as a way to expand the talent pool. They’re bringing in people who are located outside the immediate vicinity of their physical offices, filling specialized roles and making bold moves to bring in execs who, in many cases, may always be remote.

That said, most respondents (32.5%) cited talent acquisition/retention as either a “major” or “significant” challenge. Even though many no longer feel geographically bound in their hiring as they once did, agencies and consultancies still view staffing and team chemistry as paramount concerns.

This finding may reflect the still-huge diversity gap that exists at the more senior levels of management and leadership, and the push to hire accordingly. Indeed, 15.4% of respondents cited diversity and inclusion as either a “major” or “significant” challenge.

Pandemic-related conditions (26.0%) ranked as the second biggest challenge. As long as coronavirus is still with us, agencies will be hamstrung: While most have pivoted to onboarding clients virtually and fostering as many connections as possible in the remote environment, many are anxious to go see clients again (and, ostensibly, vice versa). Zoom-based meetings are simply not as fruitful or interactive as the real thing. Speaking of which, 95.9% of respondents cited “working from home” as a trend they “expect” or “very much expect” to endure.

The other big challenge cited was securing an audience, virtually or otherwise, with HCPs, which was cited by 17.1% of respondents as either “major” or “significant.” With KOLs rethinking the way they practice medicine and interact with patients and reps, the industry remains in a state of flux on the professional side. It’s not surprising, then, that respondents’ two other most-oft cited trends were the “need to create more/better content/experiences” (97.6%) and “more personalization in communications” (95.9%). 

* These revenue and workplace 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 is taken from the annual agency review, supplemented by estimates made by the MM+M data team, and includes numbers from certain firms that had been unavailable in 2019. Revenue and employment numbers for parent companies and certain network-owned firms were accounted for to prevent double-counting in these totals. Billings breakdown and trends includes data from non-Top 100 firms.