When it comes to digital promotion, the pharmaceutical industry is looking for impact and a strong return on investment (ROI). Impact measurement for digital marketing is relatively simple—seeing how many emails are opened, how many click-throughs are generated, the duration of the interaction, participation in any additional call to action such as a sample request, etc. These measurement rubrics can all be built into the back-end of the program, and the level of impact greatly increased by the best practices followed in developing the campaign and the quality of the physician panel.

Calculating the ROI of digital marketing is another story. ROI continues to be an industry challenge, particularly when the digital provider does not know all the confounding factors going in. And since ROI is generally calculated on sales data that takes a long time to accumulate, the final ROI outcome can be significantly removed from the campaign execution date.

However, the general belief held is that digital marketing delivers not only impact, but also a significant ROI based on its relative cost to execute. The uptick in budgets allocated to digital marketing for the coming two years as reported by Cutting Edge in their 2012 report, Pharmaceutical Digital Marketing and Social Media: Managing Growth, Mitigating Risk and Mastering Strategy, is testament to that belief.

To further demonstrate the viability of digital marketing and encourage its use, many providers of digital services are moving towards some combination of a risk share and cost-per-engagement model. We are putting some “skin in the game” if you will, to show our commitment. This model is not unlike our sales service counterparts who place part of their fees at risk based on the sales performance of the represented brand. Indeed the vast majority of contracts for outsourced sales services have a performance risk component with a certain percentage of the management fee put at risk, and built-in penalties and rewards for sales above and below an agreed upon target.

The risk share model for a typical interactive campaign (several email campaigns, direct mail, tele-detailing) might place certain elements of the campaign at risk. Risk share may be offered in reaching or exceeding a targeted engagement rate and/or open rate for an e-detail or generating a targeted number of sample requests. The risk may put a certain percentage of the program management fee at risk, and offer one of the email blasts in a series of two to three blasts at no charge if the agreed upon targets are not met. There is any number of possible combinations of fees to put at risk in these programs based on delivery of key metrics.

As mentioned earlier, one of the key factors in digital marketing success is the quality of the target panel. Because there is a greater breadth in recruiting digitally versus traditional singular recruitment, our pharmaceutical clients are using multiple vendors to gain the greatest reach of the best quality. This use of multiple vendors makes it even more imperative for the digital marketing provider to offer a risk share contract—an assurance that we are all in this together.



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