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Measuring Marketing Channel Effectiveness
August 2016
A FirstWord ExpertViews Dossier Report
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Measuring Marketing Channel Effectiveness
Published August 2016© Copyright 2016 Doctor’s Guide Publishing Limited
All rights reserved. No part of this publication may be reproduced or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping or storage in information retrieval systems without the express permission of the publisher.
This report contains information from numerous sources that Doctor’s Guide Publishing Limited believes to be reliable but for which accuracy cannot be guaranteed. Doctor’s Guide Publishing Limited does not accept responsibility for any loss incurred by any person who acts or who fails to act as a result of information published in this document. Any views and opinions expressed by third parties and reproduced in this document are not necessarily the views and opinions of Doctor’s Guide Publishing Limited. Any views and opinions expressed by individuals and reproduced in this document are not necessarily the views and opinions of their employers.
Cover image: © adam121/Cifotart | AdobeStock
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All Contents Copyright © 2016 Doctor’s Guide Publishing Limited. All Rights Reserved
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ContentsExecutive summary .............................................................................................................................. 1
Research objectives .............................................................................................................................3
Research methodology ......................................................................................................................5
Experts interviewed ...................................................................................................................................5
Definitions ....................................................................................................................................................6
Responding to the digital revolution through MCM ..................................................... 7
New opportunities arising from MCM .................................................................................... 11
Key insights ............................................................................................................................................... 11
The value of MCM in pharma ...............................................................................................................12
Segmenting and targeting the broad customer base ....................................................................15
Efficiency from content and channel customisation ......................................................................16
Changing trends in healthcare and their effects on MCM ...................................... 17
Key insights ............................................................................................................................................... 17
Easier access to information with smart devices ...........................................................................18
Aligning with patient empowerment in patient-centred care .......................................................20
Real-time monitoring with the rise of cloud computing ................................................................. 21
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Measuring MCM effectiveness ...................................................................................................22
Key insights ...............................................................................................................................................22
Data collection and analysis ................................................................................................................23
Analysis is key .......................................................................................................................................... 27
Understanding the data landscape in MCM.....................................................................................30
Tracking the Customer Journey ...........................................................................................................33
Converting data into actionable insights ...........................................................................................36
Metrics to measure customer engagement .....................................................................................39
Measuring ROI of multichannel marketing ........................................................................43
Key insights ...............................................................................................................................................43
Establishing the importance of ROI measurement in MCM ........................................................44
The need to demonstrate the ROI of MCM ......................................................................................45
The measurement of ROI on MCM activities within pharma companies ................................. 47
MCM Challenges faced by pharma ........................................................................................48
Key insights ...............................................................................................................................................48
Skills gaps in pharma companies .......................................................................................................49
Technology gaps in pharma companies ............................................................................................ 51
Reluctance to upgrade from the old marketing model ..................................................................52
Identifying requirements for marketing content ..............................................................................56
Barriers to an effective MCM model ................................................................................................... 57
Challenges in measuring MCM performance ..................................................................................58
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Critical success factors for effective pharma MCM ....................................................60
Key insights ...............................................................................................................................................60
Collecting the right information ............................................................................................................60
Stages of MCM implementation ..........................................................................................................62
SWOT Analysis of measuring pharma MCM effectiveness ..................................64
Strengths ....................................................................................................................................................64
Weaknesses ..............................................................................................................................................66
Opportunities ............................................................................................................................................. 67
Threats ........................................................................................................................................................69
Conclusion ................................................................................................................................................ 71
Appendix: Experts interviewed ..................................................................................................73
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Research objectivesThis report presents a qualitative analysis of the effectiveness of MCM within the pharmaceutical industry and how this effectiveness can be measured. The report also explores the ways in which the ROI of MCM can be improved. The overarching objective is to uncover insights to help drug companies develop more effective systems for measuring the results of their MCM activities and investments. This research will aim to answer key questions, such as:
1. How has change in the healthcare industry and among its stakeholders affected the importance of measuring MCM performance?
2. How much emphasis should be placed on proving the value of MCM in pharma?
3. What is pharma’s current level of MCM sophistication?
4. How proficient is pharma at measuring the performance of MCM campaigns?
5. How much importance should pharma place on being able to track individual customer’s journeys through the analysis of customer touchpoints?
6. What systems and processes are in place to collect, analyse and understand increasing amounts of MCM data? How robust are these systems and processes?
7. How effective are the processes for converting marketing data into actionable insights?
8. How important is it for pharma marketing teams to have the ability to track and act on MCM performance analysis dynamically?
9. At what point in planning an MCM campaign are metrics to measure its success considered?
10. What are the most important quantitative and qualitative metrics for measuring MCM success?
11. How is the impact of each channel in a marketing mix measured?
12. To what extent is testing incorporated into MCM campaigns?
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13. How is the performance of MCM activities reported and who uses these reports?
14. What skills gaps within marketing teams limit the ability of pharma to measure and prove success in MCM? Have these gaps been recognised and are they being addressed?
15. To what degree are the marketing data and systems integrated in pharma? How important is full integration to the success of MCM in pharma?
16. How committed are senior management to the development of systems to measure MCM performance?
17. Is investment in marketing analytics going up, down or staying the same?
18. What are the greatest challenges the industry faces in measuring MCM performance?
19. To what extent is being able to demonstrate an ROI from MCM required for continued investment in MCM?
20. What are the critical success factors for effective pharma MCM and how can companies improve their ROI?
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Research methodologyThis report will use both primary and secondary sources to gather relevant information. Secondary research will take the form of a comprehensive review of the literature and media coverage of pharma’s implementation of MCM strategies. Primary research will be conducted through in-depth interviews with pharma marketers and consultants who have responsibilities for and/or expertise in planning and executing MCM strategy (n=13).
Experts interviewednKamil Levent Arslan: Former Sales & Stakeholder Relations Director at Janssen,
Pharmaceutical Companies of Johnson & Johnson
nBill Cooney: CEO, MedPoint Digital Inc.
nJohn Gerow: Service Team Strategy Partner, Ashfield and Principle at JG Consulting Inc.
nLanre Ibitoye: Director, Head of Digital Experience at Teva Specialty Pharma
nDavid Laws: Thought Leader and Customer Advocate, Global Partners
nDanilo Pagano: Customer Engagement & Multichannel Director, Merck Sharp & Dohme (Merck & Co.)
nPanos Papakonstantinou: Head Digital Commercial, Europe at Novartis
nSarah Rickwood: Vice President, European Thought Leadership, IMS Health
nTim Ringrose: CEO, M3 EU Ltd
nPierre van Weperen: Diabetes Sales Director UK at Novo Nordisk
nDonna Wray: Vice President, Digital & Multichannel Marketing, TGaS Advisors
nKyriakos Zannikos: Former Global Head of Multichannel Management, Abbott EPD (later acquired by Mylan)
nAnonymous: Head of Digital at a large pharma company
See Appendix (page 73) for further information about the contributors.
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Real-time monitoring with the rise of cloud computingAmong the technologies that have changed the way organisations operate is cloud computing. This technology eliminates geographical barriers and makes information accessible from any Internet-enabled device, while maintaining its security and privacy. This has allowed HCPs to access patient information remotely and it has also allowed patients to access their diagnostic results over online portals provided by healthcare organisations.27 In this way, cloud computing also provides an opportunity to engage customers and ensure their retention by creating and maintaining their online accounts with healthcare providers, which can be accessible at any time from anywhere.
Another way in which cloud computing is relevant to marketing, particularly to MCM, is in how it enables more advanced and in-depth analytics on marketing data in two key ways.28 First, cloud computing services provide avenues for data storage and encryption at a fraction of the cost that companies would have spent to have their data secured in-house. This means that more customer data can be kept and curated to enrich the development of marketing strategies. Second, companies like Amazon provide access to powerful remote computers at staggered rates, again at a lower cost than maintaining them independently. With high-performing computing technology available along with a rich amount of data, the level of insight that can be drawn is vastly improved.
In this sense, the emergence of cost-effective cloud computing services provides the foundation for near real-time data collection and analysis. This is especially important today given the huge amount of information that can be collected and investigated from various digital channels. Given that MCM is reliant on the use of a wide range of digital and traditional means of communicating with customers, having the ability to quickly learn about how these customers are interacting with the message that is currently being sent out is a great advantage. Essentially, cloud computing empowers MCM and makes it an even more valuable strategy to adopt.
27 Sultan, N. (2014). Discovering the potential of cloud computing in accelerating the search for curing serious illnesses. International Journal of Information Management, 34, 221–225.
28 Cruz, X. (April, 2013). How Cloud Computing Influences Digital Marketing. Cloud Times. Retrieved from http://cloudtimes.org/2013/04/08/how-cloud-computing-influences-digital-marketing/
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Tracking the Customer JourneyOne key part of pharma marketing is understanding the journey taken by consumers. These consumer journeys reveal the way in which potential customers make decisions about the products that they are going to purchase and the ones they are going to leave on the shelf.41 According to Janssen’s former Sales & Stakeholder Relations Director, Kamil Levent Arslan, high importance should be placed on tracking individual customer journeys through the analysis of customer touchpoints. “Whenever you start to include MCM in your business plans, you should place an emphasis on individual marketing,” he advises. In addition to this, Arslan also notes that MCM gives marketers the opportunity to customise their approach and market directly to individuals. This capacity to market at a personal level to consumers can be powerful, as the company is able to more directly respond to their needs and consumers themselves feel more valued and empowered.42 In terms of customising marketing approaches by focusing on the customer journey, Arslan adds that, “Customer journeys should be designed properly in the beginning because you cannot change it in the middle of the process. Technology in both the digital and social worlds allow us to serve our customers directly. If you set up the framework properly in the beginning, you can benefit patients a lot at the end of the journey.”
This recognition of the importance of tracing the customer journey of an individual was highlighted by a majority of the other interviewees. Teva’s Lanre Ibitoye says, “How much importance should be placed on customer journeys? I think that it’s critical now. If you’ve got something out there and you’re not measuring how customers are interacting with it, then you can’t improve it.” With this, Ibitoye connects tracking customer journeys to assessing the effectiveness of a marketing approach. When a company understands how customers are responding to the way it is communicating its message, then it can adjust and improve the ROI of its marketing strategy. Ibitoye believes that being able to understand customers is critical for the success of a company, saying, “We can launch a service and it can be amazing in January, but by May people may have found flaws or come across something better. If we’re not in the position to iterate and improve, then we again run the risk of falling behind.
41 Court et al. (June, 2009). The Consumer Decision Journey. McKinsey Quarterly. Retrieved from http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey
42 Khedar, P. & Sturgis, M. (December, 2015). Seeing Through Physicians’ Eyes: Three Priorities for Pharma. Pharmaceutical Executive. Retrieved from http://www.pharmexec.com/seeing-through-physicians-eyes-three-priorities-pharma
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