Marketing is inefficient and costly. In the marketing of pharmaceuticals, billions of dollars are at stake. The scattershot, highly generalized models that have long been characteristic of marketing do a poor job of targeting consumers at a time when the cost of competing in highly diversified global markets is rising and the challenges of convincing consumers to buy your product are growing. Big data can change this. Marketing mix models such as Experfy has designed for the pharmaceutical sector can boost profits by reducing the cost of effectively reaching the exact consumers you need to grow your business.
Challenges and Opportunities
All markets are now global. This has produced enormous financial opportunity for drug companies but it also means that the cost of accessing those markets through effective marketing is greater than ever. Drugs are a physical good with high operational costs intrinsic to marketing. Each market and its consumers remains unique so adapting your marketing approach to maximize its effectiveness and generate the highest return on your promotional investment is more critical—and harder—than ever. In the US alone, over $30 billion is spent on pharmaceutical marketing annually. Pharmaceuticals are also a complex and expensive sector because of the imperative of communicating with a broad array of stakeholders including physicians, consumers, hospitals and HMOs. An effective and well-integrated strategy must be developed for reaching each of the major actors in this complex ecosystem. Reducing the cost of effectively targeting pharmaceutical marketing can be a financial bonanza to those in the drug industry especially at a time when health care costs—and the pressure to reduce them—are growing exponentially.
In our work, there have been specific marketing mix challenges that Experfy has had to overcome. Firstly, the data concerning marketing expenditures has not always been highly detailed (e.g. it was at the city level with some data at the national level). Another challenge related to the integrity of the data as multiple overlapping channels for marketing expenditures were employed simultaneously. Thirdly, we had to devise a data normalization scheme that would provide an unbiased estimate of effectiveness so as to account of variations in the sizes of the zip codes. Finally, we had to estimate the effectiveness of marketing across different cities and markets.
Using our world class data scientists, Experfy can help you to overcome these challenges and we can also help you to capitalize on the most innovative Artificial Intelligence and Big Data techniques to optimize your marketing mix model in the most user friendly, operationally efficient and profitable ways.
Experfy has deep expertise in the application of machine learning and AI more broadly to marketing mix models. Specifically, our solution entails the development of a Marketing Mix Model to forecast and track the effectiveness and impact of individual marketing channels. Our demonstrably effective approach involves:
- Harnessing government and private sector data sets to forecast the amount of localized spending via each marketing channel from city level monthly expenditure data.
- Forecasting integrated marketing campaign effectiveness and conversion to customer rates based upon the amount that the client spends per channel in a particular area.
- Determining the ROI for your Patient/Caregiver & HCP (health care professional) marketing vehicles.
- Using visualization technologies and dashboards to capture a detailed view of multi-channel marketing effectiveness and how different marketing expenditure interact and correlate with one another.
- Computing the optimal degree of localized expenditure for each product, demographic and channel and then normalizing that analysis to transform all metrics into an unbiased data set by zip code size.
- Categorizing publications based upon their effectiveness in targeting specific populations in diverse markets.
- Determining the optimal mix of marketing expenditures across channels so as to reduce overall marketing cost while increasing the strategic value of marketing insights obtained.
- Tracking performance so as to iteratively improve the marketing campaign over time.
- Helping you to determine the best amount to invest in DTV (direct to vendor) vs. HCP focused marketing and how to maximize your ROI so as to fully catalyze physician acquisition, NBRx (new-to-brand prescriptions), RRx (refilled prescriptions), and TRx (total prescriptions) by whatever market segmentation is most strategically significant to your organization.
- Understanding how external factors specific to each particular context impact your business operations.
Using this approach and marrying your existing data with external data sources, we can create a customized machine learning model with the capacity to predict sales for each mix of marketing channels—an unprecedented achievement in the pharmaceutical market.
Our solution can provide you with the improved information collection, better analytics and enhanced execution capabilities required to produce a superior marketing mix model. Experfy can also help to train your technical and business personnel in how to determine the optimal mix of marketing channels and leverage it in business strategy.
Tell Us About Your Specific Project
- What is the product you are looking to market and what features does it have?
- Who are your target customers?
- What marketing channels do you use?
- What markets do you operate in?
- How much data do you have?
- What sources do you leverage do make marketing decisions?
- What data techniques do you use to analyze the effectiveness of your marketing regime?
- How do you classify data?
Experfy leverages prescription sales data that is captured at the zip-code level, along with the knowledge base of myriad other firms, as data sources to help pharmaceutical companies model their marketing and sales activity with an explicit focus on information regarding cost per click ads, radio and TV ads, the specific names of journals in which ads have been placed, the amount of spending on advertisements in medical journals and other health professional publications, and the number of sales representative visits to doctors in an area. During these visits, sales representatives conduct “lunch and learn” meetings in the doctor’s offices and then report the data obtained and expenditures in their CRM which is also an important information source for Experfy. Digital advertising is growing but there are still bottlenecks. Different companies will report different degrees and types of marketing expenditures on the display ads and pay per click ads bought on platforms such as Google, Facebook and WebMD. By collating and comparing all of this marketing activity against data such as new prescriptions written and the absolute number of prescriptions including renewals, we have been able to predict which particular marketing mix is working most effectively in which region of a particular business. We have invented dashboards and mechanisms that enable us to track this data weekly and also track how these results compare to competitors. Consumers and how to best reach them differ dramatically by demographics, geography and the product that is being sold. Experfy has succeeded in being able to translate the lessons that we have learned—and continue to learn in real-time—about which mix of marketing expenditures works best for their product into actionable recommendations that have produced dramatic marketing cost savings of 17% and revenue increases of 11% for one major pharma client. Lower costs and higher revenues mean greater profits for your business.