When Buster the Boxer achieved record viewing figures across paid and unpaid media, John Lewis maintained a reputation that’s seen its Christmas advert become an exemplar for marketing effectiveness. The campaign, like Monty the Penguin and the Man on the Moon before it, won prestigious gongs for creative effectiveness and captured the world’s eyeballs across multiple platforms. It even spawned a Presidential pastiche featuring Hilary and The Donald that went viral. The revenues rolled in. Buster’s adventures drove a 4.9% increase in sales in the last six weeks of 2016, including an uplift of 36% in the crucial week before Christmas.
However, just like John Lewis’s latest Christmas advert, there’s a monster lurking under the bed. Despite the commercial importance of brand awareness during the key festive period, the question remains whether brands actually realise long-term value from the huge investments they make in Christmas adverts. Analysis suggests that, like a trampolining canine, the festive bounce for many good brands is short-lived – though undeniably there are broader market dynamics in play. So the question marketers must ask themselves is this: if truly effective marketing drives long-term value, why isn’t profit – rather than reach and recognition – more religiously used as the ultimate barometer? After all, a brand is for life, not just for Christmas.
Welcome to the world of marketing effectiveness – a world which, fuelled by the proliferation of media channels and fluctuating consumer behaviours, has become a major focus across all verticals. A recent IPA study into marketing effectiveness in the digital era claims that while the digital revolution has increased the potential effectiveness of most forms of marketing, actual effectiveness has declined since the global financial crisis. A primary driver for this, it says, is the increasing focus on ROMI, which it describes as an ‘efficiency metric’. The study confirms that growth and profit are the true measures of effectiveness – and cites our bouncing boxer, Buster, as a powerful example of success.
But achieving marketing effectiveness is profoundly difficult and even the most celebrated consumer brands find it tough. It’s therefore not surprising that the pharmaceutical industry has struggled to grasp the nettle. The industry is widely acknowledged to be behind other sectors in its application of marketing effectiveness methodologies. Historically its focus has been on salesforce effectiveness and measuring returns on a traditional commercial model that’s largely depended on reach, frequency and feet-on-the-street. However, in recent years companies have recognised that digital is here to stay and they need to fundamentally change the way they engage their customers. This shift has ushered pharma into uncharted waters where it needs to embrace more innovative models of communication and develop sophisticated means of measuring their effectiveness. Naturally, progress is slowly being made. However, there’s still some way to go before pharma establishes a culture that nurtures true marketing effectiveness. So how can it make the journey?
Half the world away
Primarily, the industry perhaps needs to reassess the strategic importance of marketing. In many organisations, such has been the historical emphasis on the salesforce that it’s often felt like marketing teams are simply the people who produce the brochures to give to the reps. That’s a crude allegation, but hold it to the light and it has a faint watermark of authenticity. For marketing to be effective, it first has to be valued – and in some organisations, that’s still half a world away. “Many companies still struggle to see the value that marketing brings,” says Ed Corbett, principal, Novasecta. “There’s often a tension between medical and marketing when, in fact, the two should be complementary. SFE commands much attention, primarily because companies need to ensure that expensive sales resources are being optimally deployed. Conversely, marketing budgets are smaller, in itself reflecting the lesser value placed on the discipline. However, at its core, marketing is a key driver of value creation.
“Fundamentally, marketing is strategic; it’s about understanding customer needs and generating insights that allow you to tailor your offering to meet those needs. Effective marketing enables businesses to understand their target segments better than the competition so that they can position their products and develop messaging to support their appropriate use. Without that detailed understanding, you’re simply spraying and praying. Organisations should ask themselves three questions; who is our key customer, what are we asking them to do differently with our product and why? These may appear simplistic – but getting good answers to them is essential. That’s where marketing comes in. It’s surprising how many organisations still fail to recognise the strategic value of marketing – but if you don’t value it, any future efforts to focus on marketing effectiveness will be purely academic.”
Somewhere only we know
The importance of understanding your customers is unequivocal. Certainly, done well, marketing can provide the gateway to that deep customer knowledge that can win you competitive advantage. But there’s a danger that terms like ‘customer insight’ and ‘customer experience’ have become business buzzwords that are used too cheaply. The devil is in the detail. “The key to marketing excellence is indeed customer insight,” reveals Jocelyn Coutinho, senior consultant, Blue Latitude Health. “Marketing effectiveness hinges on deep customer insight – without it, communications will never deliver their desired outcomes. The most ineffective marketing programmes are often characterised by poor segmentation that comes from customer research that’s flawed at the outset. Poor insight can have a destructive impact across an entire communications programme. However, the word ‘insight’ is over-used and often poorly defined. Our industry is awash with data – but there’s a distinct difference between information and insight. True insight must be both relevant and meaningful if it’s to fulfil its primary goal: to drive behaviour change. To get there, companies must first understand customers’ current behaviours and then dig deep to identify the barriers to changing them. It’s only once you know this that you can establish the key insights you need to develop the communications that will evoke the desired behaviour change.”
Golden slumbers
The industry’s approach to marketing effectiveness has naturally been influenced by its approach to SFE, focusing largely on reach and frequency. But companies need to awake from their golden slumbers if they’re to avoid a nightmare further down the road. “Pharma has historically focused on ‘input’ measures,” says Aaron Bean, director and commercial life sciences lead, EY UK & Ireland. “Companies have invested heavily in dashboards and analytics to help them understand how often they’re reaching their target customers through the various channels and how those channels are encouraging customers to take a desired action. These are the classic measurements that have dominated traditional SFE. However, there’s a limited focus on the outcomes of those marketing interactions. Input measures are useful to know but, on their own, they tell you very little. It’s not enough to know that you’ve come into contact with a customer; you need to establish whether that interaction drove a richer form of engagement. Furthermore, in a world where communication is increasingly conducted across multiple channels, it’s important to have a clear view of how your multichannel marketing is improving customer sentiment – awareness, perception and satisfaction – and driving business results. Despite an abundance of sophisticated analytics tools, many companies have a myopic view of their inputs, but are blind to understanding how effective their customer engagement actually is. And worse still, many still struggle to get a single view of the customer across multiple channels. In a multichannel marketplace, if you don’t have a 360° view of your customers, your communications will always fall short.”
Your song
The need for a 360° view applies to both external and, as crucially, internal communications. Companies need to work in harmony to develop integrated communications that deliver a consistent, seamless customer experience. But it’s an unfamiliar tune for many companies. “The pharma industry is some way behind other sectors in its use of communications channels,” says Jocelyn Coutinho. “The bulk of its investment is still in personal sales channels, but as it becomes harder to access customers, companies need to use non-personal channels to supplement their approach. However, if you’re going to do that, it needs to be integrated. This is something that companies don’t typically do well. Businesses are increasingly exploring other channels but often don’t connect them all to create a joined-up customer experience. This ultimately leads to poor return on investment. Cross media interaction is vital to marketing effectiveness. Every interaction you have with a customer needs to supplement the one before – otherwise you’re pouring money down the drain.
“The lack of integration is not restricted to external communications – it affects internal communications too. Rigid organisational structures mean there is often fragmentation in how companies approach their customers. Individual departments are set up to focus on specific stakeholder groups; for example, market access teams focus on payers, PR/communications teams interact with patient advocacy groups and commercial teams engage physicians and KOLs. The problem is, quite often these teams don’t talk to each other. This leads to disparate, disjointed and, ultimately, suboptimal customer communications.”
Please, please, please let me get what I want
So in the battle for marketing effectiveness, how can pharmaceutical companies get what they want? How can they get close enough to customers to understand what they need and develop services and communications that resonate sufficiently to drive behaviour change? Fundamentally, progress requires a more sophisticated use of data. “Leaders in the industry are able to use data to move their decision-making from something that’s based on hindsight to something that’s based on foresight,” says Aaron Bean. “This requires asking the right questions to ensure that your data and analytics strategies are aligned. Too often, businesses approach it the wrong way round – capturing as much data as possible, collating it into dashboards and only then trying to work out what it means. With a proactive understanding of what you need to know, it’s possible to build a laser-focused data strategy that provides the right quality and granularity to drive the analytics you need. Then, with the right data governance and simple visualisation tools, it’s possible to index customer engagement and optimise interactions based on a robust understanding of the cause and effect of your inputs. That makes for better engagement, better customer sentiment and, ultimately, better business outcomes. These are the hallmarks of marketing effectiveness.”
From me, to you
Pharmaceutical companies are working increasingly hard to improve their marketing effectiveness – but how do they know if they’re moving in the right direction? Ed Corbett believes that organisations need a ‘brand compass’ to provide a quantitative assessment of their brand plans and help them navigate effectively. Crucially, says Ed, that assessment should be conducted externally and objectively. “Marketing effectiveness starts with understanding a basic question: how good is your marketing? If you don’t know the answer it’s impossible to determine how you improve it and what metrics you need to put in place to measure performance. It’s difficult to do this yourself. Objectively assessing and benchmarking commercial plans is best done externally to avoid the pitfalls of marking your own homework. This is standard practice in other industries, but is less prevalent in pharma. Yet it’s the key to marketing effectiveness. A validated framework that provides an objective review of plans and benchmarks them against relevant competitors is the best way to develop a clear view of the quality and effectiveness of your marketing activities. But the assessment is only the start of the process. If you don’t invest in addressing the recommendations of the review, you’ll never build the capabilities that will take you where you need to go.”
One day I’ll fly away
Pharma’s battle for marketing effectiveness will not be won overnight. It’s likely to have more ups and downs than a mutt on a trampoline. The digital revolution has, like a 2017 festive advert, spawned a monster – and forced the industry to find new ways of engaging its customers and new ways of measuring its performance. Marketing effectiveness is much more than a buzzphrase – it’s a strategic imperative that won’t go away. And just like a John Lewis Christmas commercial, we’ll still be talking about it this time next year.