The 2023 Healthcare Marketers Trend Report: A trim off the top

Even as the impact of the pandemic started to diminish, 2022 proved a challenging year for healthcare marketers. Beyond COVID-19, broader threats abounded: the dicey economy, the legislation that gave Medicare historic pricing power, the imposing patent cliffs.

Given those overarching trends — not to mention a fast-transforming kit of digital advertising tools and technology — it should come as no surprise that, per the MM+M/Swoop 2023 Healthcare Marketers Survey, marketing budgets slid by 8%.

The average marketing budget fell to $7.6 million, down from $8.3 million in last year’s survey. That spending level is a long way off the pre-pandemic boom times of 2019, when the average budget reached a peak of $12.5 million.

The survey tapped 146 marketing leaders working at pharmaceutical companies (50%), medical device and diagnostic makers (29%) and biotech firms (21%). Forty-seven percent of respondents work at organizations with annual revenue of less than $500 million; 21% at companies earning between $500 million and $1 billion; and 22% at firms whose annual revenue exceeds $1 billion. About 60% share budgeting responsibility with others, while 36% are solely responsible for their company’s spend.

Bigger companies, of course, had bigger budgets. Those working at organizations with $500 million or more in revenue spent an average of $11.4 million last year, while those with sales below $500 million averaged just $4.3 million. Not surprisingly, pharma companies had the highest budgets, averaging $9.3 million.

Regardless of company size or line of business, respondents’ most popular refrain was that expenditures largely “stayed the same” — even as the shift to digital tactics continued apace. Indeed, marketing teams keep getting better at doing more with less.

At Alcon, for example, budgets for advanced technology lens implants are flat year-over-year, according to associate director of marketing Amanda Scott. However, she adds that the company has experienced “a shift in our marketing mix, and we are investing more heavily in digital. It’s where we continue to see the most measurable impact.”

That conclusion was borne out by a majority of survey respondents, who noted that quantifying their return on ad spending is more important than ever. In fact, the demand for such accountability is taxing in-house insights and analytics teams.

“More and more, we’re outsourcing to more proven modeling techniques, establishing strong analytical capabilities to measure impact,” says one marketing director at a $3 billion

pharmaceutical company, adding that these analyses aren’t exactly optional. “I can’t go to my leadership without showing them what they’re going to get out of an increased ask, especially if it wasn’t initially in the budget.”

One exception to the belt-tightening trend is physician outreach, as 51% of respondents reported that they’d fattened those budgets. The result: Spending aimed at HCPs now accounts for 53% of the marketing pie.

Digital methods are employed by virtually all respondents — 96% — seeking to reach physicians. Within that set of channels, social media ranks highest, at 79% usage, a change welcomed by marketing execs.

“Even five years ago, we had to work for that social budget,” notes a marketing director at a top-10 pharma company. “After years of fighting, it’s normalized now. Social media has become table stakes.”

The director adds that working with large digital companies has paved the way for new partnerships. “There are tremendous opportunities to innovate. We’re looking to partner in ways that create digital therapeutic solutions versus a simple social media integration of a brand or a disease-state education.”

Websites, meetings, events and sales reps are in the marketing mix for 74% of organizations reaching out to physicians. Market research is in the budget mix for 72%, and digital display ads for 68%. More than half of the companies reaching out to HCPs use printed and digital sales material, content marketing, patient education materials, meetings and content, as well as  continuing medical and advocacy education.

Many respondents have their sales colleagues in mind, with 75% noting that they are cranking out more sales aids and 67% targeting top-tier offices. Among the individuals spending on nonpersonal promotion, 69% are leaning more heavily into email and direct mail. Half are investing more in white-space targeting, such as telesales or geotargeting.

But settling on the “right” amount of marketing spend for sales forces remains as confusing in early 2023 as it was in the first months of the pandemic.

“During the first 18 months or so, when our sales force couldn’t be in the field, we converted everything to digital, with new creative so that the salesforce could email it to their customers,” explains a marketing leader in the rare-disease space.

The leader acknowledges what has long been evident to many industry-watchers: that money earmarked for speaker programs and lunches has similarly been shifted to the digital realm.

“Now that they’re back out there, we have to evaluate whether the digital advertising spend needs to be at the same level,” the exec says. “Should we take that chunk out and spend it as we did in 2019, in ways that make it easier for the sales team, now that they’re face-to-face again?”

The leader stresses that personalization in all digital efforts charges nearly all of the company’s digital and data-gathering conversations. “Everybody talks about being patient-centric, but for people with blood cancers, these potentially lifesaving therapies matter. So we’re working on getting an even more granular appreciation for every individual patient.”

Another growth spurt identified by this year’s survey was spending to reach consumers. Overall, 38% of respondents raised investments in this space, making it the second most likely recipient of a budget boost. Consumer-focused spending now captures about 28% of the overall marketing pot.

Here, too, digital rules, with 88% of respondents tapping these channels and tactics. Social media is the most prevalent channel, at 74% usage. The commitment is surging, with 46% amping up spending and a mere 2% cutting back.

But the rising costs of exploring social media, whether TikTok or Pinterest, have made marketers pickier about pilots. One marketing director, for example, references a recent experiment with an initiative on Reddit, which, including creative, account time and media, clocked in at $250,000. “That channel wasn’t a great return for us,” he says.

But now that the brands the director oversees are allowed to advertise on Facebook, which recently relaxed its policies around CBD, the organization has increased spending there. “That’s an audience we haven’t been able to reach,” he adds enthusiastically.

It goes without saying that consumers rely on digital mechanisms for finding information, according to Alcon’s Scott. “Paid search is especially important, and we’re able to refine the way we talk to cataract patients through digital marketing in a more impactful way.”

She adds that understanding the priorities of Alcon’s core audience matters more than any particular tactic or channel. “Macroeconomic trends are decreasing some of their willingness to pay out of pocket for an advanced technology,” she explains. “Much of our messaging has shifted toward building confidence in their options.”

At least so far, newer digital toys (read: AI, bots and voice) don’t “feel right” for reaching the 65-plus crowd Alcon is chasing, Scott says. “We aim to prime them for a conversation with their physician, then direct them there. We want a physician to answer those questions.”

To most effectively reach consumers, 71% of marketers use websites and 70% spend on some form of traditional paid advertising (most commonly TV and print in the latter category). More than half use market research, content marketing and direct marketing.

Vis-à-vis last year’s outlays, spending remained about the same for all other audiences, including nurses, pharmacists, advocacy groups, investors and caregivers. The status quo also held for payers, an audience on the receiving end of about 12% of media budgets. Promotions sucked up the largest percentage of payer spend, at 35%, with formulary and point-of-care audits trailing behind at 26% and 11%, respectively.

As for the channel mix, respondents are playing the usual instruments to make marketing music. Eighty-one percent are investing in social media, 75% in websites and microsites, 67% in paid digital and 66% in professional meetings and conferences. A majority of respondents affirmed their reliance on direct marketing, search engine optimization, market research and sales reps (both remote and in-person), as well as  the materials that support them.

Marketers do appear to be changing their tune on traditional media, however, with only 39% using print or TV. They’re also rethinking their commitment to video and nonlinear TV, which is used by 29%. The results reveal split enthusiasm: While 28% of respondents said they upped spending here, 23% decreased it.

Those figures are surprising, given how quickly the space appears to be growing across all industries. The Interactive Advertising Bureau recently reported a 39% gain in connected TV alone, with 75% of the media buyers in its survey characterizing the channel as “a must-buy.”

Content marketing remains a fast-growing channel, with 41% of respondents reporting that they spent more on content in 2022, while only 5% decreased their investment. As expected, companies amped up spending on professional conferences as in-person events returned, with 41% reporting increased spending in this area.

So, with unemployment low and fears of a recession high, what do medical marketers expect from the year ahead?

Forty-one percent anticipate higher marketing budgets, 22% lower ones and 37% the status quo. Acknowledging a need for agility, marketing leaders stress that none of their plans are written in stone. The most common reasons they shake up approved budgets?

Underperformance, a change in brand leadership, further pandemic-related disruption and the emergence of a new competitor.

Shifts in the way marketing leaders are sizing up the challenges are also worth noting. The uncertain economy weighs heavily on respondents’ minds, with 59% describing it as either extremely or very challenging. Delayed or disrupted launches keep 55% up at night, while pressure from payers or managed care orgs worries 54%. Concerns about clinical development and time to take drugs to market come next, at 50%, followed by smaller launch budgets, at 48%. COVID-19 doesn’t even make the top five. But marketers also see plenty of pockets of potential growth. Doing more with less tops the list, with 62% of respondents identifying such an approach as an opportunity. That’s followed by focusing on patient-centricity (60%), shortening paths to market (60%), making investments in digital health (59%) and leveraging analytics (55%). They also see potential in drug development innovation and personalized communication.

This story has been updated.

---

Patterns in the MM+M/Swoop 2023 Healthcare Marketers Survey (HCMS) represent opportunities for marketers. Among them is the potential to synchronize professional  and consumer messaging in order to optimize the media mix.

Optimization is especially critical at a time when marketers are trying to do more with less, explains Peter Kane, Swoop’s head of growth marketing.

“If you can unify that go-to-market, and have congruent messaging, patients can have more effective conversations with their physicians, ultimately leading to better outcomes,” he says.

According to the HCMS budget data, meetings/events remained a staple for marketers on the HCP side last year, and traditional advertising such as linear TV still commanded the largest share on the patient side. There’s little overlap between those two channels but industry has the potential to sync up these audiences.

Take consumer marketing, where social media, paid digital and linear were three of the top five channels used last year by share of budget. Respondents increased use of these channels heading into 2022. Social, paid digital and video (which includes connected TV) each got a boost last year. Even within streaming audio, 30% of respondents said they raised investment.

Turning to the professional segment, the survey showed that conferences, sales reps and sales materials were among the top five line items on the budget. But there’s overlap with DTC in certain places. For instance in HCP marketing, media buys moved toward social, video and programmatic.

Marketers can capitalize on these commonalities. First, as they increase outlays, media planners shouldn’t target these channels individually. Because many consumers engage across programmatic, social and TV, if an advertiser is using the same audience across all those channels for planning and activation, then why not optimize the engagement?

“You get this ideal engagement with patients,” explains Kane. “You reach them at the right moment in their journey.”

At a time when budgeting has become more challenging, it’s even more important to use the marketing budget in the most optimal fashion. Indeed, more than 60% ranked “doing more with less” as a potential opportunity. That likely means, “I want to make sure my spend is going to the channels that are most effective for me,” Kane explains, “and if I’m targeting streaming audio one way, programmatic another way and linear a third way, I’m either missing a lot of patients or I’m activating too many patients too frequently.”

Second, the audience should be unique to the brand’s market definition and core therapeutic advantages. The marketer should use the same audience across all channels, to maximize effectiveness in each one. The segment needs to be built so that it has the highest number of likely patients as is possible within privacy limitations.

That’s where machine learning, artificial intelligence and real-world data come in. These can help the marketer build a custom audience based on their unique brand objectives to plan, activate and measure across all channels.

And audiences should be connected. “If you start with your patient audience and say, ‘Now I want to see what the HCP world looks like within those audiences,’” notes Kane, “you’re using the same underlying data set to build both audiences, essentially.”

Once he or she connects the dots between DTC and HCP advertising, the marketer can unify planning and activation — both right and left hand. This is the key to unifying go-to-

market strategy and — ultimately — creating conversion and driving greater Rx lift.

“While that ‘left-hand, right-hand’ theme will always exist,” says Kane, “I don’t think that ‘never the twain shall meet’ is a thing anymore. At least in marketing, the left and right hands need to come together to do the heavy lifting.”

From the March 01, 2023 Issue of MM+M - Medical Marketing and Media