Jun 27, 2011

Unbranded DTC Advertising: Where’s the ROI?

Multiple choice – Unbranded DTC advertising is a:

   a. Market expansion strategy that only benefits the category leader

   b. Regulatory inevitability that will be the death of DTC

   c. Waste of money

   d. First step toward engaging patients with your brand and generating a measurable ROI

   e. None of the above

If you answered anything other than d, then read on. Unbranded advertising is not what you think. It has the power to bring patients into your brand’s franchise in a cost-effective way – patients who might not otherwise pay attention to your message. Read the full PM360 article here: http://www.pm360online.com/f1_Unbranded_DTC_Advertising_ROI_Pharma_Healthcare_0511

Estimates have put the ROI on branded DTC advertising at about 2:1.

Properly planned, executed, measured and managed, unbranded advertising can do much better. More on the ROI metrics later, but first, here’s why unbranded advertising can work for you whether you manage a new, first-in-class brand or a later entrant to an established category.

Awareness Isn’t Enough

Branded DTC is based on the traditional consumer marketing assumption that brand awareness leads to increased sales; that awareness leads directly to action. The assumption is that just like hearing about a consumer brand on TV entices people to buy that brand at the supermarket, hearing about a pharmaceutical brand will entice them to ask for it at the doctor’s office.

Except that it doesn’t work that way. Simply increasing awareness of a disease state is not enough. There’s a big step between awareness and action in consumer behavior around healthcare – and that’s acceptance. Consumers need to understand and accept their need for treatment before they take action about a specific brand. Telling them about your brand before they’ve internalized the need for it is futile.

Making Unbranded Work for Your Brand

Using a combination of online and offline vehicles you can engage consumers to assess their risk and find out more about a disease or condition, not your brand. When they respond you need to carefully manage their journey toward acceptance. Don’t take them directly to Brand.com – they’re not ready for that. Instead, create an online presence where they can explore and assess their potential risk. Make it easy for them to link to brand information when the time is right for them.

As you manage this dialog, it’s important to understand that acceptance is not a single event, but rather a process. There are three steps on the path toward acceptance: Avoidance, Assessment, and Acknowledgement. These three phases of acceptance are defined in the Catalyst™ Brand Acceptance Model developed by Roska Healthcare Advertising in consultation with Wharton School behavioral psychologist Talia Myron-Schatz, PhD.

Find out more about the stages of acceptance here.

Where’s the ROI?

Here are two ways you can prove the ROI of this approach:

  1. Isolated market testing
  2. Patient value vs. patient acquisition cost

Isolated market testing

Pick a group of markets and pilot your unbranded effort for an 8 to 12 week period. Measure NRxs in those markets from the onset of the campaign through 3 months post campaign (the extended time gives patients a chance to evaluate their situation and see their physician). Compare the NRxs during that period against NRxs in non-test markets for the same period, and against NRxs in the same markets for prior periods. Did your brand grow more (or lose less) in the test markets vs. the control markets? Calculate and extrapolate the incremental revenue from the test markets and compare it against the cost of rolling out the campaign. The analysis will show your ROI from the unbranded effort.

If there are other variables at play, factor them into a regression analysis to determine the relative weight of those factors against the unbranded DTC.

Patient Value vs. Patient Acquisition Cost

This methodology compares a patient’s lifetime value to the brand against the cost to acquire a new patient. It requires that you know the average length of therapy in days for your brand and the wholesale average cost of your brand per day.

Monitor each key metric in your pilot markets – cost to get a response, conversion rate of responses to Rxs, and cost to acquire a patient. Managing your online or offline DTC efforts to the cost per response requires ongoing tweaking to the media buy, but ongoing adjustments can yield improvements of 70% or more in cost per response. Conversion to Rxs takes longer to measure, but you can do it with a combination of incentive redemptions and incremental Rxs in the test market (as measured above).

The Bottom Line

Unbranded advertising can give your brand an advantage when it comes to reaching people who are not yet ready to take action. It allows you to start a conversation and insert your brand into it after you’ve led the prospect through the assessment phase – when they’ve moved beyond avoidance and denial and they’re ready to take action.

If there’s anything I’ve missed or you want to continue the debate, leave a message in the comments or contact me directly.

By Chuck McLeester, Senior VP Planning, Metrics & Analytics

Jun 24, 2011

IMS wins Supreme Court ruling, an important decision for the future of Rx marketing

The recent IMS ruling is an important decision for the future of pharmaceutical marketing. Rx data is used to target, segment and measure the effectiveness of sales/marketing efforts. State legislators have made a move to block access to data on privacy grounds, but the Supreme Court has recently ruled in favor of the industry:

Vermont further argues that detailers’ use of prescriber-identifying information undermines the doctor patient relationship by allowing detailers to influence treatment decisions. But if pharmaceutical marketing affects treatment decisions, it can do so only because it is persuasive.

Fear that speech might persuade provides no lawful basis for quieting it.

Vermont law currently restricts the sale, disclosure, and use of pharmacy records that reveal the prescribing practices of individual doctors. But on June 23, 2011, Justices Kennedy, Roberts, Scalia, Thomas, Alito, and Sotomayor delivered the opinion of the U.S. Supreme Court that speech in aid of pharmaceutical marketing is a form of expression protected by the Free Speech Clause of the First Amendment. As a consequence, Vermont’s statute must be subjected to heightened judicial scrutiny. In their opinion, as it relates to practical operation, Vermont’s law “goes even beyond mere content discrimination, to actual viewpoint discrimination.”

Branded pharmaceutical promotion is one of the most regulated forms of communications of any industry. Every word is scrutinized by lawyers, regulators, medical professionals, and the FDA to ensure its accuracy and ‘fair balance’ in presentation of the supporting data. As a result, I’m continually astonished by the apparent short-sightedness of individuals like William Sorrell (Attorney General of Vermont) and other outspoken industry critics who attempt to limit the dissemination of this information based on its ability to “influence prescription decisions that are not in the best interests of patients.”

Why isn’t ‘accurate information’ in the best interest of anyone who is making treatment decisions? If a physician sees a significant number of diabetes patients, isn’t it a benefit to her/him for the industry to provide accurate information specific to diabetes. On one hand, our industry is criticized for disseminating information that consumers may not need (e.g., in broadcast DTC advertising) and, at the same time, we’re criticized for using data that allows us to target messages to those who it most benefits (e.g., The Center for Digital Democracy, Consumer Watchdog, U.S. Public Interest Research Groups and World Privacy Forum’s 144-page complaint in late November, and current state regulations such as Vermont).

Consumers and healthcare professionals need more information about pharmaceutical products, not less. And the more targeted it is to their specific interests and needs, the better. When will legislators and certain ‘public interest’ groups stop trying to tell us what’s best for us, and let us evaluate this ‘accurate information’ so we can make a decision for ourselves. I’m curious to know how many of the Vermont legislatures actually asked physicians what they want, before making decisions in ‘their best interest?’

What’s your take on the ruling? Drop me a line in the comments or email me to continue the discussion.

By Jay Bolling, President of Roska Healthcare Advertising

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