As a marketer in the life science industry, a big part of your job is justifying your marketing budget. Management may understand investment returns are high, but convincing them to channel funds away from research and development is consistently a hard sell.
But consider this: nine out of the top 10 largest pharmaceutical companies spend more on marketing and sales than they do on R&D. Of course, this is a very broad statistic. To extract actionable information we need to dive deeper, firstly by separating out divisions such as consumer products, which fall under the life science category (marketing spend at companies such as Johnson & Johnson is skewered by this data). All things considered, on a statistical level marketing makes business sense — especially for Big Pharma.
Knowing exactly how much money to devote to marketing requires not only a keen understanding of what tactics are required to accomplish your marketing goals, but also insight into your competitors and their marketing behavior.
This is particularly important in the digital age, as life science products go head-to-head with competitors through pay-per-click (PPC) advertising, banners and targeted ads. It’s easy to get out-bid for highly visible, and high-return, advertisement slots.
Getting clear competitive intelligence has never been easy. Life science companies aren’t in the habit of openly sharing marketing strategy and spending. Sure, publicly held companies are required to release financial reports, but marketing budgets are typically reported in “sales and general administration,” section that muddies the numbers with operating costs.
However, understanding the big-picture trends and drawing together different sources can generate a basic picture of the specific market in which you compete.
Reaching Your Core Audiences
If you’re a consumer-facing healthcare company, you and your competitors can’t help but show your hand as your influence enters the public domain. The United States is one of two countries in the world that allow direct-to-consumer advertising for prescription medicines, and the statistics are impressive. In 2012, the public was exposed to $4 billion dollars worth of therapeutic and medical device advertising. However, because these products are prescription only, a further $24 billion was spent promoting the drugs to physicians.
Some other interesting trends to keep tabs on, according to the 2014 Healthcare Marketers Report from Medical Marketing & Media:
• For medical device, diagnostics and biotechnology companies, marketing budgets increased on average 5 percent between 2013 and 2014.
• Biotech companies made the largest increase with mean marketing investment up 28 percent, to an average of $14.7 million.
• Small companies (with valuations under $500 million) increased marketing spending 26 percent, for a mean total budget of $2.6 million.
• The bulk of the funding was directed at the so-called 3P’s: physicians, patients and payers.
Keeping up With the Digital Movement
Surveys show the biggest budget increases among pharmaceutical companies are occurring in digital media. Investment in Big Data, social media and mobile marketing doubled between 2012-2014, according to a report from Cutting Edge Information.
The appeal is obvious. Digital advertising involves lower entry costs and is easily monitored for statistical returns on investment and rates of customer conversion. While not science-specific, a report by Accenture showed 94 percent of B2B buyers conducted online research before making purchase decisions. Within that number, 77 percent are doing a Google search and 83.4 percent are consulting the company’s website. This is still a powerful justification for investment in your website and search engine optimization (SEO) to improve your organic search ranking. If you’re a contract research or manufacturing organization with an intangible product to sell, online visibility is particularly important.
An Integrated Approach
Despite the wave of new digital media, long-form content and technical pieces are still needed to convert website traffic into business orders. As a recent C&EN report on the purchasing process revealed, just over 50% of survey respondents most frequently sourced their products online through a supplier website.
However, the survey also indicated that two thirds of respondents had chosen not to buy a product because of a lack of information about its specifications and how it ranked in the marketplace. Product briefs, articles and white papers are all needed to convince famously skeptical scientists that your product is legitimate. To complete the purchasing life cycle, your marketing budget and tactics must be holistic.
And what does convince them? Survey respondents indicated that the most helpful type of supplier information for evaluating a product or service was technical comparisons (cited by 68% of the respondents), followed by unique product features and benefits (51%) and value comparisons (47%).
Beyond digital and content marketing, B2B science companies have many more mediums to work with. Trade shows and conferences are important as they provide a personal touch, which can build customer trust and confidence. Sponsored events, panel discussions, webinars and virtual symposia are also worth considering. Further, e-newsletters, blog posts, and print features can be factored in for a fully integrated approach. In 2015, you have a wealth of marketing channels at your disposable — but all will drain your budget. Take the time upfront to plan, assign specific resources to each, and talk to your publisher about bundling different mediums into a customized package.
Know Your Goals and How to Get There
Bottom line: communicating technical science to your potential customers requires an investment in marketing. Translating that into a dollar figure requires an understanding of context — what are the most effective marketing mediums for your audience, and what are the tactics needed to help you stand apart from your competition? By knowing the big-picture trends, and then taking your plan down to a more granular level, you can justify your budget and accomplish your goals.Keywords: biotech, Digital Strategies, life sciences, marketing goals, marketing to scientists, pharma, trends