Your Guide To Allocate Budget For Digital Pharma Marketing
Pharma companies are known to spend anywhere between 10-23% of their annual budgets in marketing activities. A large chunk of these budgets are generally allocated for traditional marketing activities which have been associated with them. However, in the last few years, Pharma companies have started taking initiatives in the digital marketing space. A majority of the companies are still lagging behind in their digital marketing initiatives and the cause can be attributed to inadequate resources and inaccuracy in budget allocation. Marketing budgets are always under scrutiny by C-suite in any industry. Justifying the marketing budgets to internal and external stakeholders is one of the toughest tasks for marketing managers in cases KPIs are not defined correctly.
Pharma companies who wish to initiate digital marketing activities need to be vigilant while allocating budgets and bifurcate the budget in such a way that it is flexible to accommodate innovative marketing initiatives, on both traditional and digital channels.
Why Should Pharma Shift Budgets to Digital Marketing?
Digital marketing has more to do with strategy and reaching the right audience, at the right time and at the right place. Strategies should incorporate every single aspect that drives the operations and budgets. This is why a sound and optimized plan is essential for success. Regular optimization of budgets in your marketing mix are essential for:
- Appropriate distribution of resources to execute marketing activities: Money drives. A good mix of digital and traditional marketing activities encourages business growth and promotes reach to the right audience. It ensures a healthy balance is maintained between traditional marketing and digital marketing efforts to support the business goals holistically.
- The necessity to adapt and evolve: No idea is perfect and no marketing activity can always be 100% successful. Additionally, the trends around marketing always keep changing and thus necessitates the adoption of new ideas. Inadequate budget creates a cash-crunch and marketers are not able to execute new concepts resulting in loss of opportunities
- 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. Oftentimes, some digital solutions may appear as a costly affair at the outset. This perception is mainly due to inadequate understanding of digital channels and their processes. In reality, investment in digital marketing brings far more positive and long-lasting effects as compared to conventional but outdated practices
- Demonstrates commitment of C-suite towards digital marketing: Appropriate budgetary allocation and defining KPIs in advance are one of the most effective ways to communicate organizational goals. Mid and junior level executives always use this parameter to gauge where they should focus their efforts. Therefore, optimal budget allocation and analysis of the performance of campaigns and support from C-suite ensures that risk-taking behavior is fostered in marketers who want to achieve results.
How and How Much Budget You Should Allocate for Digital Marketing?
Well, when we talk about money, it’s always a serious business. While moving from traditional marketing to digital marketing, the first question that comes to Pharma marketers is, “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 a preeminent strategy. Some may argue this number is arbitrary and should be based case-to-case. Well, here is where digital marketing differentiates from all other channels. Several events and opportunities which arise from digital marketing can hardly be predicted with the traditional marketing approach and mindset. Hence, having a budget that is flexible is something that digital marketing warrants.
An effective strategy would be:
- Periodical adjustments 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 the digital world. 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. When you are new to digital marketing, 10-15% figure is an appropriate number to begin with. Ensure that 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
- Continuous process of measuring campaign performance: The good thing about digital marketing is that most of its aspects can be measured by digital analytical tools. Social media platforms such as Docplexus can provide statistical insights about the impact of digital marketing initiatives through numerous efforts such as competitive analysis, sentiment analysis and platform analysis. 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 robust foundation for optimized budget allocation and enables marketers to focus on the activities that work best. For example, interactive webinars and online CME courses on professional communities provide a greater impact than content on non-professional digital channels such as mainline news websites. Thus, professional social media is the most effective channel for marketers in the Pharma industry.