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The State of Marketing in Life Science and Healthcare in 2019

The industry-specific digital maturity index + a roadmap to thriving in the digital landscape

Introduction

The healthcare and life science industries are constantly evolving and growing at such a fast pace that would make any marketer keep one eye trained on the future, anticipating the next big move. That’s why every year, we survey our colleagues in healthcare and life science in order to understand the industry’s collective views and sentiments about the upcoming year.

Our objectives with the 2019 survey were:

- Investigate the industry’s marketing priorities, budgets, barriers, tactics and measures of success- Understand the digital trends of the industry- Benchmark the industry along the Digital Maturity Index

Today’s life science and healthcare organizations need to understand the ongoing shifts in the ‘digital ecosystem’. We hope you consider this report as an opportunity to take a glimpse into the future of marketing in 2019.

A Quick Glance at Our Respondents

We surveyed 156 marketers in healthcare and life sciences to curate a representative sample of the industry. Respondents were segmented by their primary function, category and relevant business unit of their company or science/health-related business unit, their contribution and their annual revenue size.

The respondents represent a diverse cohort from a variety of marketing roles. They participate in a range of roles from marketing services to sales management to product development. They also contribute to their company, from individual contributors, to Managers, to Vice Presidents. The respondents also come from a variety of categories between science and healthcare-related services, while also representing a diverse set of company and product category sizes — including companies with no revenues to over two billion in revenues.

March 2019

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Categories

Roles

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Positions

Company Size

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Marketing Priorities + Trends

This year’s marketing priorities and trends are moving in a direction that suggests organic growth and driving demand is a leading priority for marketers.

We asked respondents to rank their single highest priority, followed by the second and the third. Those were:

1. Increasing awareness in new or existing markets2. Generating new leads or methods to generate new leads3. Gaining customer intimacy / Understanding market and customer needs

Annual Budgets

For the 10th year in a row, the industry’s discretionary marketing budget as a percentage of target revenues is most often between 1% and 3% if companies are at or near their ‘run-rate’ for their offerings. The higher marketing budgets are normally due to launching new offerings that do not yet have significant revenues.

Spending Along the Marketing Funnel

When investigating the spread of budgets along a traditional marketing funnel, we see that over a quarter of respondent’s budgets are spent in outbound, 28% in lead generation, another 17% in inbound and nurturing, and the final quarter spent in sales enablement and support. This new spread of spending represents a significant shift in marketing execution from just a few years ago, where 70% of the budget was spent by lead generation. After that, the rest of the budget was spent almost solely on sales enablement with very little funds allocated for nurturing and opportunity development.

Seeing the funds move further downstream indicates that marketers are investing toward strategic relationships.

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The fact that outbound has decreased from prior years, is more representative of the decreasing cost of reaching target customers. Overall, the traditional ways of reaching the industry’s audiences are becoming less expensive. Before, it could cost $8,000-$10,000 to purchase a print advertisement in an industry magazine. And while these are still viable tactics for a marketer, there are more, and often less expensive, ways to reach an audience through social media and digital touchpoints.

Barriers to Success

The biggest barrier to success for most companies is creating engaging content, followed closely by strategy. The biggest barriers seem to be strategic and not tactical or technology- related. In fact, as a barrier, technology remains fairly low. That’s because today’s tech is much more democratized.

Marketers are recognizing that strategy is really where they can make true impact, and to overcome that barrier takes a lot of time, work and creative thinking.

Besides their single biggest barrier, when asked to rank their top three barriers, our respondents report the following specific barriers that impede progress toward marketers meeting their goals.

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The top three barriers are:

1. Our company website is limited in functionality and content2. Our offering lacks differentiation or a unique selling proposition3. It is difficult to generate interesting/relevant content

Distinguishing a company website as a barrier usually indicates that there is a disconnect between the ongoing, ever-evolving nature of marketing and the static, permanence of a website. It is hard to create a website that can also function as a strong, agile asset, and serve the needs of a wide variety of marketers within a company.

The lack of differentiation and unique selling proposition as a barrier suggests to us that there isn’t a problem with lack of differentiation, but rather, there is difficulty in articulating the value proposition within the marketplace. There are very few truly commodity products in life science and healthcare, but we can see how marketers would feel the pressures of a noisy, competitive market in such a way that makes it difficult for them to position their offerings effectively.

The Most Effective Tactics

Our respondents report that the most effective tactics in their marketing mix are:

1. Paid social media advertising (i.e. promoted posts or sponsored posts on Facebook, Twitter, YouTube, LinkedIn, etc...)2. Conference sponsorships, trade show exhibitions, events, and seminars (excluding travel costs)3. Special advertising sponsorships (non-professional events, collections, posters, etc.)

In the eleven years of conducting our survey, this is the first time that paid social media advertising has matured enough that respondents consider it as the most effective tactic. In the past, conference sponsorships, trade shows and email marketing have routinely garnered the top three spots as the most effective tactics within the marketing mix.

Special advertising sponsorships being an effective tactic is a nod toward organizations moving toward a more strategic relationship in developing content with publishers as their partners - whether co-sponsoring content or creating awareness beyond traditional means of advertising.

How to Measure Success

This year, revenue is ranked as the top way to measure marketing success, followed closely by the number of opportunities that lead to revenue. Still, the measures of success span an interesting and diverse set or responses. It’s also encouraging to see Return on Investment (ROI) fall toward the middle of the pack. Using ROI to measure success has many limitations because it creates an environment focused on short-sighted success: Marketers are tasked to measure every single marketing activity independent as direct cause-effect ‘swim lanes’, which typically leads to injecting resources only toward tactics that are easily measured. In turn, this can really limit a marketer and also lead to short-sighted tactical planning.

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Digital Trends

Investments

In today’s healthcare and life sciences companies, marketers are investing along a broad spectrum of tools, experiences and tactics. Most importantly, companies are beginning to look at designing new user experiences. This demonstrates that companies are recognizing the need to drive action and the desire to do what their audiences want. Second, companies are recognizing the vital role social media plays in their digital ecosystem.

Microsites

There are many reasons for an organization to employ a microsite. They can be instrumental to targeting specific industries or audiences, or necessary in a regulated industry that needs to separate information between different audiences (i.e. patients and care providers). Although 30% of respondents said they don’t have a microsite, the reasons organizations do have them vary — whether their current website lacks the type of content desired by the marketing team, or a lack of optimization for lead generation or poor user experience. Still, microsites can easily digress into oblivion if not constantly fed with significant effort or resources to drive traffic to them. For an effective microsite, marketers need to create an integration path into the main website.

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CRM, Leads, Leveraging Them + Automation

Lead generation is an important part of marketing. Leads are often the main currency of a marketer’s efforts, and customer relationship management (CRM) systems are the bank for such value. Managing this asset and leveraging it should be of the highest priority for marketers.

However, 13% of respondents store their leads in spreadsheets, making it nearly impossible to maximize the value of such leads. Remember that CRM systems don’t only hold leads, they also hold sales information, and that information can be the vital difference between a dead lead and a healthy one. The respondents who have some demographic information or detailed lead profiles are that much closer to an automated system in lead nurturing, and a much more effective marketing program.

CRM

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Leads

Leverage

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Automation

Social Media

LinkedIn is the most popular response for engaging and connecting with audiences on social media, followed closely by Twitter, according to this year’s respondents.

Recall from earlier that our respondents cited engaging content as the biggest barrier to their success. This barrier directly manifests in the fact that blogging did not appear higher as a way to engage on social media, yet blogging is connected directly with search engine optimization. Every time an organization publishes a blog post, liken it to putting dollar in the bank. That’s because search engine optimization works slowly over time, and building that powerful asset takes time. Marketers need to focus on ways to create engaging content before they can utilize this powerful tool.

Lastly, YouTube is the world’s second largest search engine, yet it ranks low in relation to all of the other social media efforts used for engagement. Creating a YouTube channel or YouTube-based advertising is paramount for any science or healthcare organization in rounding out its holistic digital ecosystem.

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Earned Media

Exactly 30% of respondents only engage in public relations (PR) with the occasional press release about a product launch. For a better PR program, organizations should consider being more strategic about attracting earned media. By defining their thought leadership strategy and actively pitching and engaging with trade press and media, reporters will consider them a trustworthy source.

What is the Digital Maturity Index?

Using all the above information, we benchmarked where companies in our industry fall, using a framework developed by CapGemini2, a global strategy group.

As with any initiative, we first need to justify how digital maturity impacts the key financial drivers (KPI’s) that life science and medical companies care about: revenue, profitability and market valuation.

Source:

The Digital Advantage: How digital leaders outperform their

peers in every industry. CapGemini Consulting/MITSloan

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RevenueAs the graph shows, companies that place a higher value on digital intensity will see higher revenues. These are the companies that find themselves in either the fashionista or digirati quadrant. But the beginners and conservatives will see a much lower revenue.

ProfitabilityIf a company values profitability, then investments in a stronger transformation management intensity are warranted. Here, companies in either the conservative or digirati quadrant will see a much larger increases in profitability than the left two quadrants.

Market valuationMarket valuations is important in the life science and healthcare industries because of the proliferation of mergers and acquisitions. Here again, companies ton the right side of the axis that values transformation management will see a much higher market valuation. CapGemini identified two critical assets to analyze an organization’s digital maturity and transformation: Digital Intensity (DI) and Transformation Management (TM).

The digital intensity of a company is it’s ability to invest in digital infrastructure and tools or digitally-enabled initiatives that affect their operations

Transformation management is a company’s investment in leadership and management to obtain the know-how and drive change and transformation in their organization.

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In a Cartesian grid, the landscape forms four quadrant: Beginner, Fashionista, Conservative, Digirati.

Beginner - A company who scores in the beginner quadrant has very little digital infrastructure and does not invest in digital know-how or have not set a vision for their digital transformation

Fashionista - A company that has extensively invested in digital tools and infrastructure. Although they have a sound foundation of technology and initiatives, they lack expert knowhow and leadership needed to truly execute the organizational change that allows smart and unique utilization of technology, in bringing about winning digital transformation

Conservative - A company in this quadrant systemically values the importance of a vision set on digital maturity yet remain hesitant to invest in technology and tools

Digirati - A company in this group has the ability to become digital in all of its processes and e innovates in digital transformation. Such companies have equal investment in both the power of knowledge working tangentially with the right tools and digital initiatives.

Digital maturity is strongly correlated with the three KPI’s the life science and healthcare industries care most about, and companies in the beginner quadrant performed worst in every KPI instance, while digiratis will find success in their priorities because they have equally invested in both digital intensity and transformation management.

The Life Science + Healthcare Digital Maturity Index

By mapping out life science and healthcare companies on this index, we can get a big picture scope of how the industry is doing, and where there is room for improvement. Although respondents scatter across the entire graph, about a quarter of respondents fall in Digirati. Last year, most of the industry found themselves in the “Beginner” quadrant. Companies are investing money into digital intensity and bringing in fresh thinking to drive success.

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LINUS’ Key Takeaways

The life science and healthcare industries are undoubtedly investing in their digital infrastructure, responding to their audiences’ demands for better, more transparent digital experiences.

Yet the many marketers who responded to our survey seem to understand that no technology can overcome the need for engaging content or well-crafted strategy.

Science and healthcare industries were slow to jump on the social media bandwagon during the past decade of channel- and content-proliferation. While this conservative approach robbed marketers of valuable experience in this new, ever-evolving landscape, it saved the companies from becoming over-stretched. Now, social channels are consolidating, but a company’s total ‘digital ecosystem’ is much broader than its corporate website, necessitating marketers to manage brands, content and experiences on all of the seminal social platforms at once.

Conclusion

Understanding the future of the industry is imperative to the success of every life science and healthcare company. And organizations with marketers who run full-tilt toward a future of digital intensity and transformation maturity will reap the benefits of being a cutting-edge marketing program. Those companies that strive to create engaging content, that connect with their audience and that invest in digital trends will thrive.

We hope you are one of those companies, and we are here to help you maximize your potential.

The Linus Group is a digital agency with a deep understanding in the power of human behavior. With our unique methodologies, we have the knowhow and expertise it takes to get technical professionals to take action. Learn more at thelinusgroup.com or email us at hello@thelinusgroup.com.