Here are a few highlights, noted as a percentage of that $3.65 trillion:
** Retail Prescription Drugs-10 percent
** Dental Services-4 percent
** Home Health Care-3 percent
** Other Professional Services-3 percent. This includes health practitioners (except physicians and dentists) that primarily provide services such as physical therapy, optometry, podiatry, or chiropractic medicine.
** Other Non-durable Medical Products-2 percent. This includes retail expenditures for items such as over-the-counter medicines, medical instruments, and surgical dressings.
** Durable Medical Equipment-2 percent. This includes retail expenditures for items such as contact lenses, eyeglasses, and hearing aids.
The marketplace for the $1.5 trillion (pharmaceuticals and other products) encompasses healthcare providers (HCP) and general consumers. But, how do manufacturers and vendors reach these potential customers? Advertising, and plenty of it. According to a JAMA Special Communication, annual healthcare marketing in 2016 reached $29.9 billion, strongly affected by an increase in direct-to-consumer (DTC) advertisements for prescription drugs ($9.6 billion).
Readers of a certain age remember when DTC ads were limited to over-the-counter products only. Here are two memorable commercials from Anacin. (1 and 2) But, in May, 1983, Boots Pharmaceuticals aired the first broadcast television commercial in the United States for a prescription drug, the pain reliever Rufen. These days, DTC ads for pharmaceuticals seem to be everywhere.
Still, according to that JAMA study, marketing of pharmaceuticals to healthcare providers is the biggest portion of the $29.9 billion, coming in at an astounding $20.3 billion for 2016. And, this figure was reached in spite of policies at hospitals and medical schools designed to limit industry influence over prescribing.
The Web contains many articles professing to have the secrets to marketing to physicians. True North Custom recommends e-mail for initial communications, stressing educational content, and being mobile-friendly.
Mediaspace Solutions suggests focusing on MDs and DOs, stressing e-mail, and not worrying about social media. Then, they take a trip down memory lane with "Back in the day, it was easy to get a doctor's attention. You simply sent a rep to the office and over lunch, he or she would tell the doctor and staff all about the product or medication. Easy peasy."
Oh yes, things have gotten a lot more complicated.
Given the huge expenditures on marketing to the HCP segment, we are reminded of department store magnate John Wanamaker's lament: "Half the money I spend on advertising is wasted; the trouble is I don't know which half." Some current authorities believe that the 50 percent figure is much too low.
Wharton marketing professor Peter Fader believes that a very small proportion of your current and potential customers account for a very large proportion of your profitability. (The old "80-20" rule?) Thus, marketers should relentlessly concentrate their marketing resources on those individuals.
Great advice, but how does one accomplish this in the real world? I was just introduced to a powerful new tool that can go a long way in helping marketers reach that goal. It's called MarketMatchTM for Advertisers from DeepIntent. This new product centralizes and connects all campaign activities so marketers can identify and target high-value healthcare providers (HCPs), measure performance at the provider-level and optimize campaigns in-flight-all within a single programmatic platform.
MarketMatch for Advertisers consists of two connected applications: MarketMatch Planner (supports HCP advertising strategy) and the MarketMatch DSP (supports HCP advertising activation). Users can toggle seamlessly between these applications to plan, activate, measure, and optimize HCP campaigns within one programmatic platform.
As Chris Paquette, CEO and Co-Founder of DeepIntent told me: "MarketMatch for Advertisers makes campaigns that previously took weeks to plan for now only take minutes to forecast, build and launch. It will continue to improve the way healthcare providers learn about and employ the latest information about life-changing treatments and therapies for patients."
Michael D. Shaw