Your Guide To Allocate Budget For Digital Pharma Marketing
Pharma companies have known to spend about 10-23% of their annual budgets in marketing activities. A large portion of these budgets is still spent on traditional marketing approaches and activities which are associated with them. However, in the last few years, a handful of Pharma companies have started initiatives in digital marketing. A majority of the companies are still lagging behind in their digital marketing initiatives and the reason can be attributed to inadequate resource and budget allocation. Marketing budgets are always under scrutiny from C-suite in any industry. Justifying the marketing budgets internally in the marketing department and externally to other departments is one of the hardest tasks for marketing managers.
Pharma companies who wish to start new initiatives of digital marketing need to be very careful while allocating budgets. A budget that is neither meager nor ambitious needs to be fixed. It is very important to structure the budget in such a way that it becomes flexible to accommodate innovative marketing initiatives, both traditional and digital.
Why Should Pharma Shift Budgets to Digital Marketing?
Digital marketing is more to do with strategy and less with technology. Strategies encompass every single aspect that drives the operations and budgets are one of the most important factors. That is why sound and optimized budgets while initiating digital marketing are essential. Optimizing budgets are important because:
- Proper resource allocation for performing activities: Money drives. The commitment of good budgets for the mix of digital and traditional marketing activities ensures that activities which encourage business growth through reaching out to customers can be carried out. It ensures the balance between traditionally performing activities and novel digital initiatives that support the business as a whole.
- Necessary to cope up with pressurizing situations: No idea is perfect and no marketing activity is 100% successful. In addition, the atmosphere around marketing always keeps changing, warranting modification and adoption of new ideas during the campaigns. Inadequate budget creates a cash-crunch and then marketers are not able to add new ideas to the campaigns. Marketers and Pharma companies can lose a great opportunity just because of inadequate budget allocation.
- Encourages risk-taking by marketers: Following an initial assessment of the commitment and the budgetary allocation that digital initiatives demand, Pharma marketers feel hesitant to embrace digital marketing to the fullest. Often, some digital solutions appear costly affair at the outset. This perception is mainly due to inadequate understanding of digital channels and their operations. In reality, investment in digital marketing brings far more positive and long-lasting effects as compared to conventional but outdated practices. Adequate budgets, as well as the support from C-suite ensure that risk-taking behavior is fostered in marketers who want to achieve results.
- Shows commitment of C-suite towards digital marketing: The budgetary allocations and commitments are one of the most effective ways to communicate organization’s focus. Mid and junior level executives always use this parameter to gauge where they should be the focus.
How and How Much Budget You Should Allocate for Digital Marketing?
Well, when we talk money, it’s always a serious business. While moving from traditional marketing to digital marketing initiatives, Pharma marketers are going to face the question, “How much budget should we allocate?” There is no accurate answer for this question and that is why C-suite faces a big dilemma.
In the first year of digital marketing initiatives, allocating 10-15% of your company’s marketing budget towards digital marketing initiatives is the best strategy. Some may argue this number is arbitrary and should be based case-to-case. Well, that is something is different about digital marketing. Many activities and opportunities which arise from digital marketing can hardly be predicted with the traditional marketing approach and mindset. Having a budget that is flexible and adequate is something that digital marketing warrants.
The effective strategy would be:
- Periodical increment based on digital performance indicators: In most cases, an initial commitment of 10-15% of a company’s marketing budget is sufficient to cover the launch in digital. And yet, some companies have failed by allocating as much as 50% of their marketing budgets for digital initiatives. It is simply because they just didn’t know how to undertake digital marketing. As long as you are new to digital marketing, 10-15% figure is the smart number. Make sure you have a competent digital marketing partner who helps you understand the dynamics of your digital marketing initiatives.
- Investing in the right audience: Healthcare is a unique industry where consumers of medicine are not the same as its customers. Doctors define pharma’s revenues as they hold the power to decide which brand of medicine will ultimately be consumed by patients. And these ‘customers’ of pharma are actively embracing digital media for drug updates. Thus, a majority of your digital marketing budget must be targeted towards reaching out to doctors through digital channels.
- Measuring the effectiveness continuously: There is one good thing about digital marketing, many of its aspects can be measured by digital analytical tools. Especially social media platforms such as Docplexus can provide diverse insights about the impact of digital marketing initiatives. The effectiveness of your marketing initiatives should be measured and budgets should be optimized periodically to address the identified opportunities and gaps. Budget optimization based on digital analytics provides a very strong basis for optimized budget allocation. Focus on the activities that work better. For example, interactive webinars and online CME courses on professional community provide a greater impact than any plain content in non-professional digital channel such as mainline news website. Professional social media is the most effective channel and marketers must start using the channel effectively.