The agency agenda	January 2009

Healthcare advertising executives sound off on the major trends that will be shaping their business this year.

By Steven Niles

The primary task for healthcare advertising agencies in this difficult time is to help their clients navigate the challenges they face. This means finding ways to achieve greater results despite tighter budgets, whether that be through new interactive initiatives or by inventing new business models. With the economy in crisis and political uncertainty in Washington, the agenda for healthcare advertising is intense for 2009. Here, in their own words, a number of top healthcare advertising executives offer their view of the challenges ahead.

Jay Bigelow, president, MicroMass Communications Inc. (micromass.com)

Uncertain economic times is the macro trend that everybody is dealing with. And as it relates to pharmaceutical marketing, what I see happening is the innovators will innovate and look for new, better, and different ways to be successful in these uncertain times. That’s where the fun and the excitement will come this year. Some of these ideas and thoughts will have a little bit more play and get a little bit more exposure than they would if this was just the normal course of business type of year.

Things like social media are rising a bit. It has all sorts of legal and regulatory hurdles, but the consumer is in control now. If we can figure out how, as marketers, to better leverage and tap into that, and create trust, we’re going to move our brands forward even without necessarily larger budgets.

Brand teams within large pharma companies need to become more innovative, progressive and forward-thinking. I see that happening with mid-tier pharma companies or biotech companies, where they don’t quite have the same sets of parameters and rules and regulations that the big guys have.

As marketers, more of our energy, effort, and hopefully some exposure will happen with some of these smaller companies and what they’re doing to work within the economic times that we’re all under.

Relationship marketing is something we refer to as the glue that connects various touchpoints or tactics. We haven’t seen a big cutback in the brands that we work with closely. They understand how to apply relationship marketing to extend and enhance whatever other efforts they’re doing.

For example, on the physician side, we build the relationship marketing program to support going to the conferences with the physician. That supports the door drops or the room drops that go on at the conferences. That supports what happens within the booth at the conferences. That supports what happens with the field sales force follow ups. All of those things can be connected through relationship marketing and therefore allow companies to do more with fewer dollars overall. It makes each of those tactics work a little bit harder and have a little bit better payback if you can connect them.

The larger pharmas have initiatives underway to get more customer-centric. Pragmatically, what that’s going to look like is more disease awareness and patient education, developed in partnership with their customers, whether that’s a physician group or a managed care organization. That’s a significant departure from the traditional brand-centric “let’s build my brand through very large advertising” efforts.

The smaller pharma companies or mid-tiers and the biotechs have always had to be a little closer to their customers because they don’t carry the weight and the power of the big pharmas. They’ve always embraced their customers a little bit more. So, for them it’s not quite as dramatic a change.

Bill Drummy, chairman and CEO, Heartbeat Digital (heartbeatdigital.com)

We’re seeing people move away from some of the traditional techniques, particularly television, to more targeted media. Digital media in particular. For example, there was a study done recently that demonstrated a third of all drug ads on television are now being ignored by the population, and 45% were being skipped altogether because of DVRs like Tivo, etc. So, the efficacy of the traditional way of reaching consumers, meaning the 60-second TV spot on the news or primetime, has diminished significantly.

While that is something that’s been on the horizon for a number of years, we really see it taking off as a major trend in 2009. We’re seeing more and more of our clients saying, “We’re not going to do TV for this launch. We’re going to focus on more personalized media where we can reach people in a much more direct way.”

Also in the consumer space, there’s a lot of conversation about social media and how to use these social media platforms to reach people. There’s been quite a bit of experimentation in this area by pharma companies who are trying to reach people on Facebook or MySpace or Bebo or any number of social media platforms. And so far I would have to say there’s been very little measurable success in that area.

There’s a couple of examples that have done pretty well. Gardasil has a page on Facebook for cervical cancer that has gotten a reasonable amount of people to Friend it. But overall, most of the efforts have been fairly unspectacular partly because pharma companies are reluctant to do things that allow people to do social media the way social media is intended to be used. Meaning allowing people to exchange information and have free flowing conversations because of the fear of adverse event reporting. The pharma companies have been reluctant to allow that kind of open forum.

What I think is interesting in this space now is a shift from looking at social media as a media platform to looking at social media as a research platform. A way of gaining insights into audiences and understand what these target groups really are feeling about various issues. Health issues. About particular treatment options.

The third area that has a lot of potential is the continued enhanced use of video and more advanced interface techniques for capturing the attention of patients and caregivers. What we’ve seen now is that when people start bringing these newer techniques into their Websites and their other digital applications, we’re finding that they’re actually dramatically increasing one of the key metrics we follow, which is what we call engagement. Engagement meaning, how long the person is involved in a particular property.

That’s a key metric because we’ve seen direct statistical correlation between the length of engagement and the likelihood of the person to actually ask for the pharma product in the doctor’s office. So, the more you can increase engagement and do it in a very appropriate way, the more likely you are to affect ROI for the brand.

Techniques like using video on Websites, using much more elaborate interfaces that don’t look like the typical pharma Website where it’s very static and lots of text and still images. They’ve been shown to increase engagement anywhere from 20% to 25%. Which has a real economic impact.

In 2009, it will be rare for you to see a new Website from a major brand that has this very stilted visual presentation that we’ve seen over the last few years.

Mr. Kerry Hilton, CEO, executive creative director and founder, HC&B Healthcare Communications (hcbhealth.com)

We see a lot more advergaming going on for our clients, whether it be online or whether it be tradeshow events. We’re just seeing a whole host of more digital communication happening. That does relate to things that you’ll see on the Web for patients as well as doctors to look at and react to. The movement towards technology and adopting technology is picking up steam, and there’s a momentum behind it now like never before.

Because there is going to be such a squeeze on budgets, there is going to be a continued search for those communications firms who aren’t just online but can make online really work. For a while there was this whole conversation about moving online and 2.0 and what that means. What does that look like? But there’s going to be more seeking for not just more bang for my buck, but how do I become innovative? How do I use digital? How will I shift these dollars that I’m spending in journal advertising to make it work online.

For the last couple of years, a lot of stuff has been put up online, but not a lot has been done to drive people there and then to build relationships. We’re beginning to see that become a strong need among clients.

Nancy Beesley, executive VP and founder, HC&B Healthcare Communications

Big pharma is going to cut its advertising budgets. We saw that in 2008, and we’ll see that trend continue in 2009. Those cuts will be deep.

The most interesting trend that I’ve started to see as relates to this is that even though these companies are starting to cut their budgets, they are actually cutting into something that is more dangerous in the long term. Some of the big pharmaceutical companies are cutting their spending on DTC and promotion, but where they’re scaling back the most is in R&D. And that has a longer term effect on our business, because if you’re scaling back on R&D, that means your pipeline thins out, so that when we come out of this recession, where are we left?

You’re hearing a lot about biotechs that are going out of business. A lot of the amazing things that started to happen in our industry have started to stagger and stop, and that has the potential to create some problems down the road.

A lot of people will make decisions based on fear because they don’t know what’s going to happen. We don’t know what an Obama presidency means for the healthcare world. We don’t know what mandated healthcare looks like. There’s a lot of fear around that. Maybe it’s unfounded fear, but there’s a lot of fear around that, so what happens is marketers are going to be cautious with what they do.

Now that’s a good thing for us because people are going to expect more bang for their buck. Marketers and manufacturers are going to look to agencies to provide good thinking and great creative at a lower price. And that’s not so hard for the small agencies like us, because we’re nimble and we can do that. It’s hard for the big agencies, because they have a lot of people on their teams, they have a lot of hours they need to bill, there’s a lot of time they need to cover. We have to be aware of that. They’re going to be tightening their belts, but they’re still going to expect great creative. Because in a tight economy where there is very little differential.

Kathy Magnuson, executive VP and managing director, Brand Pharm (brandpharmusa.com)

There was a lot of cost control that went into 2008. What we’re finding and what we continue to find with our clients is that people are looking to make sure they are efficient but still effective in getting their brand messages out there and making sure their brand strategy is consistent across all of the channels that we can use to communicate with customers.

With a lot of the downsizing of the sales forces, they’re looking at a greater use of non-personal as well as interactive media just to be able to communicate with their customers more directly.

One of our biggest challenges in the industry is making sure we utilize those digital tools effectively and not keep it segregated from the brand strategy itself. It all has to go back up to the brand strategy and become a medium that you exploit as opposed to keeping that digital space separate from everything else you’re doing.

We’re seeing more and more use of Web 2.0 tools. I still think there’s a great promise for us to get further immersed into use of the digital technologies in order to communicate with our customers. But I also think that people need to understand that it is a tool. It’s a lifestyle for a lot of people, but it’s also a tool for communication. It still has to go up to what is your global brand strategy and what’s right for the clients.

Things like gaming technology have an appropriate use in trying to get more engaged with your customer and getting them more interested in learning more about your product. It’s a way of capturing attention and delivering information in a medium that people coming into the marketplace are used to getting their message across.

iPhones certainly offer a great platform. There are ways of using this interactive media to work with your customers, hear from your customers, and then get your information back out to them.

This industry in particular as well as a number of the agencies specifically are looking at what we can do to be socially aware and very conscious of the impact that we have on the environment. I do believe that most of our customers, most of our clients in the pharmaceutical industry, are taking great care to ensure that they’re not causing damage to the environment by putting in solid manufacturing practices, making sure they’re eliminating waste, packaging is being cut back. Use of digital media not just to communicate their messages but also, quite frankly, utilizing digital routing practices and electronic communications to cut back on the use of paper. And looking into ways that their representatives can not drive as much.

We are very aware of the fact that we have a positive impact on the health of people worldwide, and we need to make sure that we have that same positive impact on the health of the environment and the globe.

Larry Mickelberg, executive VP, Digitas Health (digitashealth.com)

Marketing strategies, tactics, and messages will be transformed by better understanding and reinforcing the value discussion with key customers. For consumers, traditional campaigns built around motivating consumers to ask for or mention their drug to their doctor will evolve toward the communication and provision of value-added services that connect with consumers, and/or allow them to connect with one another.

Brands will move from merely selling to helping, and go from pushing messages out to providing helpful information, tools, and support through whatever channel the consumer desires. This will allow some brands to truly differentiate on the basis of real and perceived value.

For professionals, much of this thinking also applies. We see a rise in high-value service portals incorporating a wide array of services such as detailing, sampling, learning, and community as a major component of physician interactions. Beyond that, we expect to see broader industry support of health information technology such as EMRs and evidence-based interactions with physicians to improve the efficiency of office visits, their prescribing effectiveness, and their patient outcomes.

Health information and tools will continue to become easier to find, use, organize, and share. As part of that, we believe the pharmaceutical industry will become even more prolific producers of high-engagement-value programming and content that informs, educates, and even entertains.

This programming and content will be liquid, meaning it can be widely distributed through both online and offline channels. As well, we see increasing connectivity and functionality between devices and channels. Recent announcements by CVS, Kaiser, and others on collaboration that provides consumers with secure access to their health information and the ability to manage their information online through PHR integration is one great example of this.

Smart brands will create new brand content ecosystems that target audiences and deliver across a multitude of channels far beyond the computer screen. We expect these channels to include search, social advertising, interactive TV, digital out of home, personal health records, cable/VOD, mobile, and others.

This puts a priority on agency partners who can deliver true cross-channel strategy and creativity and, as well, will require the enablement of more open-source access to these platforms on the part of major media, publishers, handset manufactures, mobile operators, etc., for purposes of distributing and measuring reach, engagement, and marketing effectiveness. Expect some innovative partnerships between companies who provide complementary services in this area, such as Nike and Apple.

In 2009, the pharmaceutical industry will finally, and substantively, become part of one of the most vibrant and forward looking aspects of modern healthcare – the social network. By joining, supporting, and creating communities with shared perspectives or shared identities, brands can foster ideas and relationships that can drive real business impact for them.

We believe that empowering communities will result in a new way to take healthcare to market – creating bottom-up demand for products and value-added services rather than continuing to push marketing messages and products at customers. For brands who are rethinking their marketing spends, and questioning large-scale DTC tactics like television, digitally mobilizing communities hold considerable promise in the near-term.

Dale Taylor, president and CEO of AbelsonTaylor Inc. (abelsontaylor.com)

It’s going to be a tough year. It’s going to be more and more important to differentiate brands because the pressure to prescribe generics will do nothing but get higher. Medicare Part D is certainly pushing people to do that. There’s going to be a tendency on the part of the government to close up the non-interference clause. That’s going to make things tougher too. The industry is going to be under a lot of cost pressure.

But brands that are new to market in almost every category now have generics that already exist in that market space. If you can’t differentiate yourself from them, then you’re going to lose. So, it’s going to be very important for agencies and clients to understand the science, to find perfect positioning around and between the generic offerings, and then to find ways to bring that positioning to life with creative that physicians remember and act upon. That’s going to be the major challenge.

We’re also going to be in a time when sales calls are going to have to be much more content driven than ever before. That’s always been the goal, but it used to be that we had give aways to rely on for a little bit of extra time and a little bit of extra attention in the office, and those are going to go away. It’s going to be important that sales reps be armed with compelling clinical information presented in a way that physicians will spend a couple more minutes with and feel the credibility of that information so that they can start to see the reps as an important resource for them.

One of the things we’ll be seeing a lot more of are interactive visual aids. We’re doing a lot of those ourselves, just because you do get more time with the doctor and the information you deliver can be more content-rich and allow the physician to look beyond the bullet points into the real data and start to understand why the brand the rep is talking about really is different than the generic that’s been on the market for 15 years.

There will probably be a lot of focus on building compliance. That’s going to be tough as the economy sinks further and unemployment gets higher. One of the things you often see is that people stop taking their drugs. That’s going to be something a lot of effort is going to be spent on.

DTC is still going to be important but probably a lot more targeted. There’s already that tendency, but that’s going to increase in importance as we find ways to get more efficient with the way we deliver messages to patients and consumers.

Agencies in general are going to be affected by the overall economy. Particularly the networked agencies, because while the healthcare agencies generally do okay on an individual basis during tough economic times, they’re always asked, if you’re a part of a network, to pick up the slack from your consumer colleagues that are getting creamed. That’s certainly going to be a real tendency on the part of some agencies to be forced to deliver more revenue, and the only way you can do that is to cut costs. That’s going to have an impact on a lot of agencies. Not so much us, but a lot of agencies.

That’s what happens when you’re in a partnership. Everybody has to pick up the slack, and there’s going to be a lot of slack in 2009.

Lynn O’Connor Vos, President and CEO, Grey Healthcare Group Inc. (ghgroup.com)

We have a mass consumerization of healthcare and health. That’s due to the Internet. The stats are pretty alarming, the number of people that now go to the Internet first for health information. In fact, if you track the data from Pew and some of the other studies, it’s actually flipped. It used to be 60% went to their physicians and talked to other healthcare professionals to get health information, and 20% went to the Internet. Now you have the opposite.

So more people go to the Internet for health information. When they’re there, they are typically doing a lot of unbridled search. They look for information, they find some information, but there isn’t a lot of expert overlay on the searching that they’re doing.

So, in a lot of respects, the opportunity for our industry is to get in there and have more expert guidance and more intervention from health experts so that the searching that they’re doing and the information they’re finding is vetted in a way to help them improve their health outcome.

The other thing that’s interesting when you look at how people search and how much time they’re spending online, a disproportionate number of people respect peers over professionals. Something like 87% respect peers and peer influence, and only 3% of the people check the source when they find information online.

So, again, great information and fantastic opportunity now that we see that people are much more consumed and interested in their own healthcare. But we have work to do to make sure the Internet is actually providing the kind of information, the kind of guidance that will help them to navigate better health for themselves and their families.

Many of the big pharmaceutical companies are asking their agencies, “help us navigate the future. We need you to help us build a new model.” It’s exciting actually.

So, business as usual is absolutely not what we’re going to see for the next four years. It’s going to be the opportunity to invent a new way to educate people. Invent the new model of selling in the pharmaceutical space.

Healthcare or health is probably the No. 1 most important aspect of any individual’s life, and so what we look at now is why should health be a burden. Health should be engaging. And how can we make it that exciting and engaging again.