- Company / Mature Pharma Brand
- Industry / Lifesciences
- Service / Marketing Mix Modeling
Marketing strategies change as pharma products mature and the market dynamics shift over time. The lowest-hanging fruits are often quickly harvested and additional gains from promotional efforts become increasingly difficult to achieve. If we maintain the same strategies and assume our effectiveness is the same as years past, then opportunities can be missed to maximize the impact of marketing investments.
Challenge
Ipsos MMA recently helped a mature pharma brand optimize its marketing spend to drive incremental revenues that could be validated through measurement and analytic processes. The client faced a mid-single-digit revenue growth target on top of $20+ billion in annual sales. The goal was to achieve more than $10 million in revenue through campaign optimization. The Client and Ipsos MMA worked together to evaluate their omnichannel marketing efforts through marketing mix analysis, at a highly granular level, enabling the client to see, measure and validate the impact of spending changes within their tactics.
Solution
To quantify the impact the baseline level of sales that the pharma brand will achieve in the short run without sales and marketing efforts was determined. Think brand equity and contractual momentum.
Mature products that have been in market for 5 to 10 years will generally see a 65% to 75% sales base and sales/marketing efforts drive the rest. The base is also maintained by continuous marketing efforts. Think of it like riding a bike, it is most difficult to pedal to get up to speed. Once you are up to speed you can coast for a while, but you still need to pedal to maintain momentum and harder if you want to go faster. That is similar to how companies build and maintain brand equity while driving towards increasing growth targets.
We then established the relationship between promotional activity and sales, or in this case, new prescriptions. New prescriptions are closer to the decision moment and more directly relate to promotional efforts. When all was said and done, we found mostly positive impact on sales at a tactical level but had to recommend a reduction in spend in some tactics that were returning less than others at the same point in the customer journey. For example, investment was pulled from two of three tactics within the online video channel and redistributed to the best opportunities in digital display and streaming TV.
There were several changes to budget distribution to maximize returns, but context on a couple of tactics indicated they shouldn’t be changed. In this case, the marginal return on investment (mROI) for broadcast TV was fairly close to $1 returned for $1 spent. We could have considered reducing spend but competitor investments in the channel made it a high-risk proposition. In order to optimize pharma marketing budgets, it was necessary to look at the mathematical analysis and match it up with context on the market and tactical saturation (among other things) to land on an optimization strategy that provides the highest incremental benefit.