As published in PM360
In response to a marketing environment that has become increasingly competitive, healthcare and pharma companies are changing the way they do business, particularly with their communications agencies. We see a number of trends that are impacting the client/agency relationship.
1. Consolidation: Clients are continuing to consolidate their list of preferred agencies or networks to drive efficiencies. In pharma, AOR responsibilities are often combined with digital or medical communications and promotions resulting in fewer “moving parts” and suppliers. The expectation is that the client will benefit from increased strategic and executional efficiencies and reduced costs.
2. Desire for Innovation with Decreased Tolerance for Risk: It is now more important than ever to demonstrate a brand’s value through differentiators and encourage customer loyalty. With the median tenure for a Chief Marketing Officer (CMO) hovering around 30 months, there is a decreased tolerance to create risky marketing and advertising campaigns. Due to the CMO’s shortened longevity, building a brand has gotten harder. As a result, CMOs are relying more heavily on data to make more marketing decisions.
3. Get it Right the First Time: With flat or decreased client marketing budgets and strict medical, legal, and regulatory review processes that extend the approval timeline to as much as 12 to 15 months, creative development faces additional pressure. Mistakes or revisions can further delay an already long process, so there’s an increased need to “get it done right” the first time.
4. Building Cohesive Experiences: In our fragmented world, marketers and their agencies are searching for new ways to build integrated experiences across all consumer touchpoints. With the explosion of channels and multitude of formats more people are involved in the process of developing and executing creative work. It is important to prevent dilution of the brand and its messaging by being diligent about building a cohesive story and narrative over time.
So how, given these new realities, can clients build relationships that facilitate original creative thinking? We believe there are real opportunities if both operational changes and revisions to the creative process are made, as shown below.
1. Operational Changes
Agency consolidations have yielded numerous benefits. Since AOR agencies focus on owning the brand and related tactics, such as core concept development, messaging, and channel specific communications to HCPs and consumers, they are now able to coordinate work from executional agencies through one central point of contact. This process reduces costs due to the AOR exerting tighter control over partners who create the derivative work, thereby streamlining financial reconciliation with these agencies.
Insourcing is another way to curtail costs. Building offices in less expensive locations (other cities or countries) can provide access to a broader talent pool with specialized skills while decreasing overhead and operational costs. Time shifting allows for greater continuity (employees use shared tools and processes) and delivery against a “faster” imperative, where work flows across time zones, resulting in quicker completion. This is especially effective with tight deadlines.
Flexible staffing models allow for greater efficiency. Individuals with specific expertise can be hired on a project basis rather than retained for the entire engagement. Similarly, partnerships or collaborative ventures can bring much needed skill sets to augment an agency’s core competencies. This ensures that the “right level of talent” is utilized, leading to better quality deliverables.
Agencies are also experimenting with different pricing models. Traditionally many agencies have charged an hourly rate, while others have moved to flat or fixed rates and some progressed to value-based models, or “outcome-based pricing.” This latter method is the most progressive because it tracks performance based on what is valuable to the client, such as leads, conversations, etc.
4. Creative Considerations
Increasingly clients are asking for creative business solutions, such as new business models or strategic solutions that go well beyond creative ideas. They want differentiators. And almost paradoxically, they want to stand out without taking risks.
5. Thinking Differently
For agencies this means treating every client encounter as a pitch opportunity and bringing challenger thinking and approaches into every meeting. This could entail bringing an outside perspective to business-as-usual meetings. Agencies may tap creative talent beyond the pharma or healthcare world to get a fresh perspective. Some will conduct proprietary research to discover new insights that provide different strategic, creative, or channel planning approaches.
Regardless, it is important that the creative process remain agile and flexible. With a condensed timeline and shortened briefing process, better, more comprehensive briefs are needed based on real insights and research. Planners need to deliver valuable insights more quickly, often looking to technology to speed the process (e.g., online panels or video chats). Additionally, some response-oriented digital work, such as CRM and hypertargeting can be optimized over time to create a living laboratory for better creative. For example, The Leukemia & Lymphoma Society’s “Cancer Ends With Me” CRM program was designed to optimize the communication that best drove donations.
With the increased number of consumer touchpoints driving a desire for more content, there is a greater need to produce adaptive creative that is effective across channels. One way to create multipurpose media is to use motion, either video or animation, rather than longer format text-based content. To be effective, agencies should rethink the use of video production (social channels, in-office video doctors, patient orientation material, etc.) by adapting a channel agnostic approach and capturing all the content upfront, leaving less chance for budget overruns due to reshoots and a greater likelihood of creating cohesive experiences.
As social channels proliferate and cost pressures continue to escalate, these new distribution points are increasingly being supported with unbranded patient content that explain disease states and contain diagnosis descriptions, encouraging patients to take action either in the form of talking to their doctor or clicking online for more information. For instance, Novartis used unbranded content to discuss health and diseases rather than promoting specific pharma products. Healthcare CRM programs are a good way to use customized online targeting to encourage compliance and persistency, especially to support proper patient use.
In conclusion, more nimble, agile client/agency relationships that make the most of precious time and nurture creativity will yield the most successful results. And agencies need to know how to work faster and better within these guidelines, being open to new ways of doing things. These ideas can bring clients and agencies closer to overcoming the operational and creative challenges and help insure longer, lasting relationships.