The Upside of Reform: How ACA Could De-Commoditize Pharma Agencies
It will take a special kind of pharma marketing agency to thrive in the new ACA era. Originally published on pharmaphorum.com, Gabriel Cangiano and Sarah Hellevang share their views.
It’s become difficult to surf the web or turn on the television without hearing about ACA. This monumental piece of legislation is poised to set-off a marketplace shift the likes of which the healthcare industry has never seen. While all corners of healthcare are presently faced with divining and responding to the changes ACA will bring in its powerful wake, one in particular is most relevant to pharma marketing agencies: the revolutionary opportunity that ACA may offer to rise above the commoditization wars and become greater partners to their clients.
Over the past several years, it has become fashionable in pharma to assert that marketing services have become commoditized –- that, with so many agencies offering services that all look largely the same, cost has become a primary differentiating factor for brand managers when choosing an agency partner. One can believe this bit of fashionable wisdom or not. But with the effects of ACA about to sweep over the American healthcare marketplace, one believes it at one's own risk. A number of ACA's consequences, whether written into the legislation or logically following from it, will be pushing the smart agency marketer right back into the limelight, just when he or she might have started to feel underappreciated.
Empowered, tech-savvy, and newly insured
The first of those consequences is a flood of newly insured patients into the healthcare marketplace, and the characteristics of those patients. The U.S. Census Bureau estimated that 45 million Americans were uninsured in 2007, and according to a recent study by the Kaiser Family Foundation, the implementation of ACA will lead to a drop of nearly half in that number. So who are these 22 million or so Americans who will be finding themselves newly insured in the near future? Also as per KFF research, the largest fraction of uninsured individuals in the United States, around 29 percent, are young adults between the ages of 19 and 29; a remarkable 31 percent of people in this age group are uninsured, compared with 18 percent of the entire nonelderly population.
It takes no particular flash of insight to realize that this particular group of customers, having grown up in a digital, mobile, and social world, are orders of magnitude more savvy in the use of such technology than their elders, and will take as a given that any serious communication with them, on healthcare or any other topic, will come through such channels. The sudden appearance of millions of empowered young adults in the healthcare marketplace is going to radically telescope what has been to this point a relatively gradual process of digitalization of marketing communications in healthcare. And that, in turn, will place a premium on agency marketers who offer much more than plain competence in digital media. This new generation has entirely different expectations as to how companies, pharma or otherwise, should be communicating with them. Personal, direct, and authentic are the ante-to-play with this new generation, and if you’re not reaching them multi-screen and multi-channel you’re not reaching them at all.
The rise in this millennial audience places an immediate premium on pharma agencies who offer more tacked-on digital competence. Any agency that wants to manage a pharma brand for this audience must go beyond basic competence and break new ground both online and off in order to remain relevant. Agencies in the post-ACA world must help brands truly connect with the digital lives of these customers. Those agencies that learn to communicate two-way, in real-time and responsively will replace others who tend to simply apply one-off, one-way creative campaigns to Websites and Facebook pages.
Multiple messages for multiple audiences
The second consequence is a large expansion in pharma influencers. Generally speaking the industry has spent the last 40 years marketing to a narrow pool of just one or two audiences. First it was just the doctor; then the doctor and the patient; and more recently the caregiver and even non-physician HCPs. With ACA, though, brands will have to communicate with and prove value to an entirely new constellation of influencers. Brands must learn to speak to managed care organizations; to understand what an ACO is and who the decision makers in ACOs will be; to talk to pharmacists, and hospital systems, and government agencies, and consumer watch groups. And each of these new influencers has differing concepts and definitions of value and what pharma should and can do for them.
A preview of this has been seen in the growth of "managed markets” agencies. But once the ACA takes hold, every agency will have to be a managed markets agency, and an ACO agency, and a pharmacist agency, and a caregiver agency, and a government agency, not to mention a physician and patient agency. The agencies that will succeed will be those who are able to communicate with all influencers and all customers; and, even more importantly, to help break down the barriers that have developed over decades in how pharmaceutical companies individually communicate with these stakeholders today.
Given our industry's history, the natural response to a proliferation of audiences might just be a proliferation of specialized divisions, departments, and marketing approaches to deal with those audiences. "Silo" may have become a four-letter word among the pharma marketing intelligentsia of late, but siloing is about as ingrained into pharma business as the orange pill bottle. Growing more bureaucracy to develop more messages for more audiences will do very little to help any of those audiences figure out what a brand is trying to tell them or why that brand’s message might be important.
ACA gives all pharma agencies the opportunity to go back to a basic marketing principle: every brand has a story. Different aspects or angles of that story may be of greater or lesser interest to different audiences, but they remain a single story. Smart marketers, the ones who break out of the commoditization trap, will use the impacts of ACA to learn how to pull a single story through different messages across varying audiences.
There's nothing wrong with having a core message for each audience: comparative trial data for physicians, cost and outcomes information for payers, individual stories and supportive information for patients, and so on. But all those messages are really just part of the same story, and marketers should never assume that an audience's core interest is its exclusive interest. After all, payers and physicians are patients too; and patients, especially the new ones entering the marketplace, will be interested in outcome comparisons, trial data, and relative prescription share or formulary positions too. We may choose to highlight one or another part of the story depending on who may be listening, but as the number of audiences grows, the basic unity of a powerful brand story becomes more critical than ever. Agency leaders who see this and are able to act on it will be stepping beyond commoditized services to offer real strategic advantage to their clients.
The human experience
What ties all this together is that in the midst of all the policy and procedure, dealing with the ACA will be a human experience. It’s the experience of what happens when how we think of and manage our health, both as businesses and as people, changes. Figuring out how to engage and meet the expectations of young patients new to the insurance marketplace or developing a cross-audience messaging strategy will not be exercises in process automation; they’ll be exercises in thinking, asking questions, and listening. And these three characteristics will differentiate the great marketer from the merely average.
Ad agencies prefer to think of themselves as “partners” to their clients as opposed to “vendors.” Tomorrow the development of mobile apps, writing copy, and drawing pretty pictures will not constitute a partnership. Agencies with the ability to uncover and tell strong brand stories will crack this perception of commoditization and instead allow the power of insight to fuel true partnerships.