Introduction
In today’s highly competitive healthcare marketing industry, marketers need to take a strategic approach to audience development that accounts for the intersection of factors that impact the provider’s ability to treat the patient, the marketer’s capacity to engage the attention of the healthcare provider, and the “knowability” of these factors.
Drawing from the work of the anthropologist James C. Scott—who emphasized the function of legibility of information on shaping the systems states evolve in—healthcare marketers should consider themselves from the perspective of a state tasked with governing their interventions into an information economy based on what they can perceive. They must map the territory of the healthcare landscape, the digital marketing landscape, and of the intersection between these vertices to identify how best to construct audiences.
This paper aims to delve into the key historical developments that have shaped the realm of healthcare and medical marketing and put these factors into context for today’s marketer.
A Brief History of Pharmaceutical Marketing
The Birth of Mass Marketing
The late 19th century marked a significant turning point in consumer culture with the rise of mass literacy, a precursor to contemporary marketing practices.
The origins of mass marketing are rooted in healthcare, albeit in a form not often celebrated. Early print advertising was heavily funded by “snake oil salesmen”, promoting cure-all tonics. Notable examples include Dr. Pepper, initially marketed as a health drink. During this period, marketers had minimal information about their audience and targeted the entire populace indiscriminately, leading to widespread misinformation.
Steps Towards Regulation
The establishment of the Food and Drug Administration (FDA) in 1906 marked a pivotal shift towards regulated marketing. This was followed a few years later by a ban on misleading statements in marketing.
A Shift From DTC to HCP Promotion
By 1938, the FDA mandated that controlled substances required prescriptions from qualified doctors, fundamentally altering marketing dynamics. This transition shifted focus from direct-to-consumer (DTC) advertising to targeting healthcare providers (HCP). Consequently, marketing budgets begin cascading towards HCP promotion, signifying the beginning of targeted marketing efforts.
As this change came into effect, there were approximately a quarter of a million doctors practicing across the US. Data systems were beginning to capture information, but marketers were still in mass media mode. It was largely a numbers game at this stage, with healthcare brands sending a sales rep to talk to every doctor.
According to a 1958 estimate, the industry turned out 3,790,809,000 pages of paid advertising in medical journals, sent out 741,213,700 pieces of direct mail, and made up to 20 million calls by detail men to physicians and pharmacists.
Despite the lack of precision, this era laid the groundwork for more efficient targeting through enhanced data collection and analysis.
Sales Rep Strategy Dominates
The private sector responded by integrating more data, and the American Medical Association (AMA) started licensing its lists. This allowed marketers to identify which doctors treated specific indications. As a result, brands could significantly narrow their list of target doctors, and send reps to doctors only if they treat certain health conditions.
Consequently, marketing strategies became dominated by sales representative efforts, with companies deploying thousands of reps to ensure a return on investment (ROI). This focus on sales rep strategy often overshadowed the importance of Non-Personal Promotion (NPP).
Commercial organizations structured their market strategies around the sales team’s activities, translating call lists into digital NPP plans despite the differing engagement costs and strategies required by these channels.
Big Data and Digitization Improves Marketing Precision
The 1990s heralded the era of digitization and regulatory changes in healthcare. In 1991, the Centers for Medicare and Medicaid Services (CMS) began releasing its Limited Data Set (LDS), which provided aggregate information about volumes of procedures and diagnoses providers were encountering.
This information allowed marketers to look beyond the doctor’s job title to instead prioritize engagements based on who is actually treating a specific health condition and how many patients they are treating.
This decade also marked the beginning of big data in healthcare analytics. Concurrently, TV advertising approval for pharmaceuticals redirected substantial budgets back to DTC marketing, complemented by the advent of the internet facilitating one-to-one HCP engagement.
Regulatory Advancement
The 2000s saw significant regulatory advancement which completely reshaped the pharma landscape.
Firstly, the introduction of the National Provider Identifier (NPI), formally required for all billing providers to get paid by CMS, marked the establishment of a common ID for all practitioners. Secondly, the digitization of claims processing, combined with advances in privacy, allowed for the acquisition of large scale commercial databases of claims occurring in doctors offices, hospitals, and pharmacies.
These developments enabled comprehensive data acquisition, connecting the dots between various aspects of the healthcare system.
The decreasing cost of data analysis facilitated more sophisticated segmentation. Marketers could now look past purely separating doctors into deciles, and start to make more predictive segments, such as analyzing trends in practice growth, determining the what stage their patients are at in their healthcare journey, and predicting whether the brand’s medication is under consideration for their treatment plan.
The Healthcare Marketing Landscape in 2024
Tying this back to James C. Scott’s insights on legibility of information, what has changed most since the 19th century is not the scale of commercial advertising but the precision of the messaging that can occur in relation to the function the provider performs in a given care pathway. We now have an unprecedented view into what is happening in the healthcare system: the challenge is how best to engage with this information.
In addition to the sheer volume of data, the number of channels with extremely varied investment costs means that calculating ROI is more complex and important than ever before.
While the marketers of 1960 had radio, print, billboards, and medical conference sponsorships to consider, these channels are just the tip of the iceberg for today’s marketer, who must also incorporate into their strategy programmatic advertising, connected TV (CTV), electronic health records (EHR), SMS, and a half dozen other acronyms.
Data-driven optimization can improve how these channels are evaluated and used. Furthermore, the same data used for audience development can feed into performance analysis throughout campaigns, enabling measurable outcomes that allow the qualification of effective tactics and disqualification of underperformers.
The technological shifts of the past few decades mean marketers must move from audience development strategies that follow the same structure as the mass marketing tactics of yesteryear to a diffuse array of audiences that drive awareness and adoption.
The Path Forward
Modern segmentation strategies are pivoting away from creating individual audiences, and instead focusing on orchestrating and deploying multiple audiences tailored to the brand’s campaign needs. The marketer of today should move from dependence on a single audience build, executed transactionally, to audiences which fit the challenges of their brand and the channels by which they can engage that physician audience.
For example, a brand launching a biosimilar should identify and engage the most relevant HCPs, investing in a channel that drives relevance at the right time. Next, they should target the larger funnel of associated providers in that care pathway who may influence clinical decision-making, in order to drive awareness throughout the patient journey. Thirdly, they must map out the challenges the individual providers may encounter and consider whether subsegments with relevant messaging can assist.
Investing in comprehensive campaign planning is vital, utilizing tools that efficiently transform data into actionable tactics. For example, identifying patients facing medication access issues can inform the creation of provider segments for targeted couponing programs to help overcome market access issues. For a newly launched brand, identifying which prescribers are being blocked by prior authorization and issuing clear messaging on navigating approval challenges can significantly impact market success.
Your New [Best Friend] in Healthcare Analytics
PurpleLab® is uniquely positioned to assist healthcare marketers in navigating this complex landscape. With one of the largest medical claims databases in the US, PurpleLab provides comprehensive data that can help plan, activate, measure media, and more. PurpleLab’s tailored solutions support advertisers throughout the entire marketing lifecycle:
- Insight-Driven Media Planning Strategy: Respond to RFPs faster with HealthNexus™, a platform that allows you to explore patient and provider journeys and determine the size of segment populations in near real-time.
- Audience Creation and Deployment: Define privacy-safe and targeted HCP or consumer segments based on detailed combinations of prescribing, procedure and diagnosing behavior. Easily distribute audiences to a range of media partners, from social to programmatic. Scale across channels with one of our turnkey onboarding partnerships. Futureproof your plans with proprietary cookieless audiences.
- Measurement & Optimization Tools: Rapidly determine the effectiveness of your audiences & media campaigns using RWD. Evaluate consumer ad campaigns to determine audience quality, script metrics and script lift. View metrics weekly, build your own novel solutions on top of our flexible API framework or feed data into your custom algorithms to determine the effectiveness of your healthcare advertising campaigns.
We’d love to help you enhance your marketing strategy with data-driven insights. Get in touch with us to learn more about our solutions.