Digital media – spreading the word on Return on Investment

pharmafile | May 19, 2011 | Feature | Medical Communications, Sales and Marketing |  ROI, digital marketing 

The rise of digital marketing in the pharma sector has brought renewed focus to tracking effectiveness, because digital is seen as the most easily measured medium.

As a result, those responsible for e-channels are often to be found leading the way in driving forward ROI tracking.

But there is no value in simply tracking one channel when you have nothing else to compare it to. How can you know whether to put more, or fewer, resources into that one channel than into another, if you don’t know what those other channels are delivering?

There has been much study into the value online channels bring to pharma marketing, but their biggest effect has been to highlight the inadequate ROI tracking across all platforms – they have raised awareness of the need to track everything in order to monitor the effectiveness of each individual channel, and of the whole.

It is interesting how much we at MSI are finding ourselves brought into an organisation as a result of a perceived need to build effectiveness monitoring processes for these new platforms – then finding that task extended into improving ROI measurement in traditional, offline channels as well. If digital has done nothing else, it has generated demand for more effective ROI measurement, which can only be a good thing.

Measuring the gaps

I would like to illustrate this with a real life case study where this happened. Their situation is far from unique, and many of the learnings and models which we took away will surely have resonance with many companies in the industry.

We were called in by a significant player in the industry, and one which has a range of brands in different therapeutic areas.

Like many, they had asked for help because they knew they had a measurement problem, and their perception was that this problem was in the online channels, presumably because they assumed that effective measurement was already happening in the more traditional areas of marketing.

Experience tells us that our first task should always be to ascertain the real extent and scope of the need, rather than how it is perceived by the in-house team, who with the best will in the world, may not be able to see the wood for the trees. So we set about looking at areas where the measurement itself was insufficient, but also at how well they were using what information they did have to make decisions.

Perhaps we shouldn’t be surprised by this, but the online channels didn’t have a huge gap on the measurement side, although there were weaknesses in how they were using that information. But the biggest measurement gaps were in HELMs (Health Economics Liaison Managers), MSL (Medical Science Liaison) and Med-Ed, although interestingly both HELMs and Med-Ed were making the best of the information they did have. In fact no single area was well covered off, and so the task quickly widened from looking at online channels, to creating a training deck which would help the team understand how they could improve their business planning and tracking – to improve business performance.

Putting the intelligence into business

The relationship between business intelligence teams and teams of marketers is crucial here. Traditionally the latter has regarded the former as mere information gatherers.

We figured out that they needed to be more than that, and we set about making them ‘business performance champions’. This use of language reflects an important difference: rather than just gathering information, they would become people who could use that information to help make the right decisions.

Three things needed to happen before we could make this work. First, the business intelligence people needed to understand the marketing strategy side behind decision-making, which meant upskilling them. Secondly, we had to give them the tools to do the job, which meant software which would enable them to properly analyse different scenarios and alternative resource allocation, using the information they had gathered. But perhaps the biggest challenge was the cultural one.

Unfortunately, there is a tendency amongst marketers to regard business intelligence people as number-crunchers, and as such they don’t hold much sway in the marketing arena.

They are not seen as understanding the decisions; pharma tends to exist in a very two-dimensional world, where marketers do the thinking, and analysts do the numbers.

Once again we can learn from the business world outside pharma here. The really successful people in top businesses are basically business minds. They have both eyes open, whereas too often in pharma, the marketers have the left eye open and the business intelligence people have the right eye open.

To be a business performance champion you need both eyes open.

It sounds simple, but it’s not. This is a significant cultural change for everyone, and that is not a ‘one hit’ task, it takes time. It is all very well providing business intelligence people with the knowledge they needed to be performance champions, but that doesn’t overcome the frequent lack of confidence when it comes to sitting in a meeting with marketers, who often have a sales background, and are therefore generally articulate and persuasive people.

By contrast – and I accept this is a generalisation – business intelligence people often went into that field because they are most comfortable with numbers and analysis.

This can mean that in a group situation, the dynamic sometimes works against them. Inevitably, decisions are made on the basis of who sounds most convincing.

So we set about trying to get the business intelligence people to puff their chests out a little bit and be more confident – and to persuade marketers to accept that and listen. And that is quite a big cultural change!

The tools for the job

Getting the two teams to accept the need for better measurement and to work together to drive business performance was one thing; providing them with the processes and tools to do it was quite another. Essentially we had to guide both teams how to quantify the returns of different strategies and Critical Success Factors (CSFs); then we had to develop SMART tactical objectives to realise those opportunities, and then track and optimise the campaigns.

To make sense of this, we broke down the plan into key areas for excellence, so that we could identify the gaps against what might be termed best practice. We came up with six of these key areas for excellence, and identified what best practice looked like in each.

One of the major problems we discovered when comparing actual practice against best practice revolved around the CSFs. The company was struggling with these because they often had CSFs which were overlapping each other, so they couldn’t kill one thing and put resource into another, because they were all interlinked.

Too often they were working up and down the patient flow with each CSF – it wasn’t linked to a specific point in the patient flow. This meant that they had kept the same CSFs in place for four years, because no one could argue to kill any of them off.

The other major issue was that they had no way of putting SMART tactical objectives in place. Because all they were really using were the sales and market share numbers – which of course can be influenced by all sorts of factors – they didn’t actually know whether their marketing strategy was performing well, or badly.

This is not uncommon, and the imperative here is to understand the SMART tactical objectives so that you can break down the ‘elephant’ and see just the bit that is relevant to the programmes you are running, without interference from other, external factors. From all of this we developed what we called the ‘Circle of Success for Tracking and Planning’, which shows in a graphic way the circular nature of what we were trying to achieve (see figure, left page).

Success gates

Of course, it is unrealistic to change from a situation where there are so many gaps to one where best practice is being carried out across the board, and so we came up with a system to identify the priority areas for action.

For each of the five boxes in the Circle of Success, we identified a number of ‘Success Gates’ – lists of things which needed to be done to achieve success in each box. So for example, the box called ‘Identify CSFs and channel Focus’ had four actions: putting an underlying forecast in place, quantifying the impact of external environmental factors, estimating the potential marketing uplift and identifying CSFs.

For each action, we gave a traffic light colour: green meant best practice was being achieved (there weren’t many of these); amber was an 80% ‘good enough’ (for now); and red was where urgent action was required.

This allowed us to agree what was an acceptable level of success in year one, year two, and so on, until all the Success Gate flags were green. It’s important to set realistic targets within a particular timescale, if you try and do everything immediately you are doomed to failure. In this way, you can work out the important things which you absolutely must do from day one.

Robust metrics

Having put together a pre-defined metrics guide and conducted a gap analysis, we ended up focusing on five channels that the company really needed to drill down on – and only one of these was an online channel.

It is interesting that the whole project started with a perception that the online channels were not being properly tracked, and that in the end 80% of what we looked at were offline channels. This is a key lesson: traditional channels need to learn from the closer concentration on online channels regarding tracking and performance.

The new online channels have come along with their natural and intuitive focus on measurement – but these are in essence simply extra marketing channels, and it is pretty pointless putting all that effort into measuring ROI on the online channels if you cannot compare their effectiveness with other parts of the marketing mix. And to do that, you need robust metrics in place across the board.

The concept of Business Performance Champions has worked well, because the concentration of tracking does need to be driven internally, and no one is in a better position to do that than business intelligence people, who have both the data and the objective overview in a way that the marketers who are delivering the channels do not. It is certainly not simple to achieve that though, as there is often a significant gap in understanding and even respect between the two.

Over time, the type of people pharma recruits into business intelligence roles needs to change, so that they have a greater understanding of strategy, and a greater confidence to champion business performance.

But in the meantime, as we have demonstrated, it is possible to shift the culture and make it happen in existing organisational models, provided the focus is there, the processes are robust, and the people undertaking the task have the right tools to do the job. It may have taken new online channels to highlight the shortcomings in tracking marketing effectiveness in our industry – but the basic underlying cause of the problem is not new.

Online marketing may not be the panacea for pharma – but if it shines the spotlight on measurement right across the marketing mix, it will certainly have had a positive effect.

SIX STEPS TO FINDING YOUR DIGITAL RETURN ON INVESTMENT

1. Review the previous plan: Planning should start with a review and learning from the last plan, and include metrics quantifying where you are, against where you can realistically go.

2. Track what is relevant to CSFs: The plan should quantify strategic objectives you realistically want to achieve, as well as what channels and KPIs will help you get there.

3. Tactical objectives: Use SMART tactical objectives that link CSFs to key programmes in a measurable way.

4. Tracking: Consistent tracking, and acting on key metrics using champion-advised approach, with key review points.

5. Reporting and analysis tools: Consistent, simple reporting tools should show the returns of different CSFs, tactical objectives and key programmes – to show what is working.

6. Outputs for decision-making and optimisation: The plan needs to provide a business case showing the returns of different CSFs, tactical objectives and key programmes – and that they are optimal.

Alex Blyth is managing consultant at The MSI Consultancy. He can be contacted at ablyth@msi.co.uk; alternatively, visit The MSI Consultancy website at www.msi.co.uk.