ADVERTISING, DISTRIBUTION, & SALES
Few aspects of the medical world are one-dimensional, and marketing within the healthcare field is no exception. Faced with a diverseand sometimes skepticalmix of customers, medical product marketing must extend beyond a catchy jingle or sleek logo if it is to woo its audience. At its pinnacle, medical marketing not only catches the attention of its targeted consumers but also conveys valuable information and convincing data to support the use of a product.
The Medical Marketing Association (MMA; San Francisco) issues its International Awards of Excellence (In-Awe) annually to recognize creative and effective work in medical and healthcare marketing for professional and consumer audiences. Now in its 22nd year, the In-Awe competition has grown to be one of the largest of its kind within the medical marketing industry.
In early June, MMA presented a total of 111 awards spanning more than 40 categories, including print, broadcast, electronic, and interactive marketing. This year's competition attracted nearly 1000 entries, which were judged by a panel of 50 judges for their creativity, strategic merit, and measurable results. Awards were presented during MMA's annual meeting in Chicago.
As in years past, marketing campaigns for medical devices received significant recognition at the In-Awe awards ceremony. More than 40 awards were bestowed on more than two dozen teams for their work in marketing devices. Winners included medical marketing firms as well as in-house marketing teams of medtech manufacturers. In addition, this year's MMA Marketer of the Year Award was presented to Holley Malia, director of global brand management at device firm Inamed (Santa Barbara, CA), for her work in developing an innovative direct-to-consumer (DTC) education campaign for the company's surgical alternative to gastric bypass surgery.
"In some areas, there is a still a stigma that advertising is cheap or unprofessionaltrying to make a profit off a disease," says Malia, who has since left Inamed to work as a consultant. "But when it comes to devices or drugs, marketing or advertising should be supporting education. If that is kept at the root of any initiative, then I believe that companies should be safe from unfavorable perceptions."
An Evolving Marketplace
Shifting demographics continue to influence the face of today's marketing, particularly in the medical realm. "The continued aging of the baby boomers is one of the single biggest factors that has affected medical device marketing trends in the last yearand will continue to do so for years to come," says Mark Perlotto, executive vice president and chief marketing officer for Adair-Greene Healthcare Communications (Atlanta). "This population of outspoken, well-educated consumers willing and, in fact, demanding to be involved in decisions affecting their healthcare is unlike anything medical marketers have seen. This population of consumers of healthcare products could potentially be one of the greatest boons ever to surface for medical device marketing."
However, despite the boon of baby boomers, medical device companies in all sectors are facing increasingly crowded marketplaces, increasing the need for effective product differentiation in the face of potential commoditization of their products.
"There are more medical devices entering the market than ever before," says Robert Mangone, senior vice president of account services for GSW Worldwide (Westerville, OH). "And in most cases, these new products are not fulfilling unmet needs as much as they are providing incremental improvements over existing medical solutions. In spite of the many options, physicians are not always eager to make the switch to a new technology, particularly if they are already comfortable with proven treatment options. Marketers are starting to recognize this and change their communications to physicians as a result."
Tim Sellers, a partner at Inferno LLC (Memphis), which received recognition at the In-Awe ceremony for its work for Smith & Nephew (London), agrees. "The medical device industry is extremely cluttered, requiring companies to become more dynamic in the way they present new implant systems," he says. "The old adage was, 'The implant will get you into the operating room, the instruments will get you kicked out.' The reality is that the success of today's systems requires companies to effectively demonstrate that the system as a wholeimplants and instrumentselevates the quality of the procedure."
Competing in a crowded marketplace requires dynamic marketing approaches that harness the power of emerging technologies, as evidenced in Inferno's campaign for Smith & Nephew. "Animation technology enabling the customer to experience the surgical technique is becoming more and more prevalent," Sellers says. "With very little time allowed to present to surgeons, sales representatives equipped with this sort of technology have an advantage over the competition."
Steve Coldiron, creative director for Jocoto Advertising Inc. (San Ramon, CA), says his agency sees a continued trend toward more inventive, compelling, and creative advertising in the medical device space. "It is not enough to simply feature a product shot with a bunch of product specs," he says. "Our campaigns push even harder to create interest, intrigue, and delight through a combination of message and visual."
Charity Williams, director of marketing at Zevex, agrees that simple spec sheets for a product are not enough to capture consumers' interest. "Consumers and physicians need to know how things such as battery life and accuracy solve their problems," she says. "We have reacted by translating our device specifications into case studies describing how product features affect patient outcomes. For example, by weaving documented consumer interactions with a product into its training video, we seamlessly teach the proper use of the device as well as differentiate our brand as leading better patient care." Produced by Mallory Multimedia (Layton, UT), Zevex's training documentary received a silver award in the 2006 In-Awe competition.
As the Zevex campaign and others honored at the competition demonstrate, medical marketers are increasingly reaching beyond the limits of the industry's traditionally accepted marketing paths to connect with physicians and end-users in entirely new ways. "Building brands around emotions and personalities has been viewed as radical thinking and risky, and taking this kind of message directly to consumers has been seen as even riskier," says Tom Haan, a partner in account services at marketing firm ODA (San Francisco). "Thus, the majority of device companies still have very conservative brands that do little to raise an eyebrow. But this paradigm is starting to shift, and with pharmaceutical marketing as a model, medical device marketing may just venture into the land of creativity."
Despite an increased willingness to experiment with new marketing concepts and media, medical device marketers face significant challenges and restraints when it comes to communicating in a complex, crowded, and heavily regulated environment.
"Technology is growing by leaps and bounds, making the decision for investment a difficult one," says Jonathan Peischl, vice president and creative director for Kane and Finkel Healthcare Communications (San Francisco). "Institutions and practices must be cautious in how they expend their resources when it comes to capital equipment acquisition. The risk is that manufacturers will fall into the trap of competing on the basis of features and abandon efforts in building strong brands, both on the product and corporate level."
Indeed, to stand out in an industry teeming with competitors, medical device firms are increasingly focusing additional resources on building their brand identities. "We're seeing more emphasis on selling the company as well as the product," says Jo Seidler, principal at Seidler Bernstein Inc. (Cambridge, MA). "Virtually all of our campaigns in the past year featured an element of corporate brandingthat the brand value is about people as well as product. In fact, these days, most of our clients seem to be just as concerned about branding their support services as they are about branding their devices or diagnostics."
In addition to marketing in an evermore competitive environment, medtech manufacturers must also make their cases to a wider audience of decision makers. "Healthcare professionals beyond the physician, as well as office staff and reimbursement personnel, need to feel understood and included in the process: how will a purchase decision benefit them as well?" says Coldiron. "Creating targeted messaging and working on helping these individuals connect with the product and company can go a long way toward smoothing the path for sales."
"While physicians and surgeons are still key decision makers when it comes to hospital-based products, medical device marketers need to recognize that other audiences influence the decision as well, and therefore need to be included in the marketing strategy," agrees Mangone. "Marketers should seek to genuinely embrace a more comprehensive role in serving a broader base of customers in hospitals, ranging from materials managers and operating room nurses to operating room directors and chief financial officers."
Jack Curran, president of LehmanMillet (Boston), says he believes clinicians will continue to have significant influence with respect to the adoption of innovative products. "However, we have all witnessed examples of clinical innovations that exhibit great promise but stall due to forces outside of the clinician's control," he says. Curran points specifically to instances in which the payer community has severely restricted payment forand therefore use ofinnovative medical technology in the areas of artificial disks and laparoscopic bypass and laparoscopic banding.
"As technology has continued to improve the ability to provide better healthcare, there is increased demand for that technology," says Adair-Greene's Perlotto. "With that increased demand come greater costs to the healthcare system and greater difficulty for payersbe they patients, the government, or third-party payersin managing those costs. As a result, everyone marketing medical products today is being required to demonstrate positive long-term outcomes, lower overall costs to the system, or other such measurements to justify the expense of their products and technologies."
Along with reimbursement, regulatory restrictions are another fact of life for manufacturers looking to market their devices. "Regulatory agencies are playing an ever-increasing role because a few industry players have stretched the limits of what should be done," says Pier Lalonde, senior creative director for LXB Communication Marketing (Quebec City, QC, Canada). "Unfortunately, there may be an imbalance as to the strictness of the agencies' recommendations and rulings. The challenge for agencies will be to get a clear understanding of the dos and don'ts and find the inventive opportunities within this space."
Recognizing the lack of attention that has traditionally been paid to regulating DTC marketing of medical devices, FDA last year held a public hearing to seek input on whether the agency needs to revise its approach to the promotion of medical products, including restricted devices.
"FDA has not taken a very active role in regulating the marketing of medical devices due to the limited amount of DTC activity," says Mark Klapper, vice president of strategic planning for MicroMass Communications Inc. (Cary, NC ). "As marketing strategies evolve, one can only assume this will change."
"FDA has certainly been urged to take a more aggressive role in monitoring labeling and reprimanding companies for violations as a result of the increase in DTC marketing," Malia says. "There is a fine line between marketing to sell and marketing within a product's labeling scope to sell. Often companies are focused on getting devices approved by FDA as quickly as possible, but their trials don't necessarily support the marketing value proposition they'd like to use to launch and sell into profitability. They get it approved, but with a narrow label, making it more challenging to really market directly to consumers with the messages they want."
However, Seidler says the threat of increased regulation need not drastically alter how medical device marketers conduct their business. "If marketers stick to the three things physicians want to knowhow and why it works, the data that support it, and what the thought leaders are saying--they should stay on the straight and narrow," Seidler says. "Device marketing has always ridden the line between the clinical and the promotional and will continue to do so. We'll just have to work harder not to forsake one for the other."
Despite regulatory concerns, the trend toward DTC marketing in the medical device industry continues, with many of the In-Awe award-winning campaigns targeted to consumer audiences.
"Until recently device manufacturers focused exclusively on the physician, but consumers are getting more sophisticated in the device arena as they did with pharmaceuticals," says Malcolm MacKenzie, group client service director at Anderson DDB Health & Lifestyle (San Francisco). "Medical breakthroughs are often reported in the press, and there is a growing group of patients who track advances."
"It's largely about educating an unaware consumer, whether that is about a disease state or a solution," Malia says. "The consumer is taking on a more active role in educating him or herself on medical conditions and potential treatment options. They are arriving at the doctor's office more informed than ever. As a result, companies are shifting or at least adding a marketing channel to reach the consumer directly with their messaging."
However, DTC marketing is far from a perfect fit for every sector of the medical device industry. "The effectiveness of DTC marketing is largely dependent on the ability of the patient to influence decisions that physicians make about medical devices," says GSW's Mangone. "In many circumstances, the physician who is making a medical device decision may not be the patient's primary physician, and therefore the patient may be reluctant to start a dialogue about using a particular product."
With this in mind, certain sectors inherently lend themselves to DTC marketingand others do not. "In emergency and acute care situations, the consumer can't really control the type of care they receive or the products used, so DTC will never be an absolute," says Eric Williams, manager of marketing communications for Boston Scientific Neurovascular (Fremont, CA). "However, as the public continues to become more aware of treatment options and takes more responsibility for making decisions about their own healthcare, the importance of DTC will only continue to grow."
According to Adair-Greene's Perlotto, devices that lend themselves to DTC marketing are as follows.
Even in sectors in which DTC marketing seems a natural fit, the costs can be prohibitive. "The top DTC pharmaceutical advertiser spent more than $225 million in 2005 and the number 25 DTC pharmaceutical advertiser spent more than $63 million," Perlotto says. "That is obviously well beyond the resources of most medical device manufacturers for any single product investment. As technology continues to progress, though, I would expect that medical device manufacturers will likely be able to more selectively identify and target their potential consumers more efficiently and with less waste, thereby making DTC marketing activities more within the reach of select products and their budgets."
ODA's Haan agrees that there are ways to keep a DTC budget in checkif a marketer knows which approach to take. "Targeting a well-defined market of 10,000 physicians is a lot less expensive than going after millions of diverse patients," he says. "While many device companies feel that they have a message that would resonate with consumers, most do not feel that they have the budget to go after this target market. The prevalence of the Internet continues to change this sentiment since millions of consumers can now be accessed cost effectively, but the best approach to using the Web medium remains elusive to many device companies, and traditional media remain cost prohibitive."
Regardless of cost, medical device companies considering targeting consumers directly face an even graver concern than finances: the possibility of isolating another valued customerthe physician. "Many of our customers are still struggling with the trade-off between driving patient demand and the negative response that this creates with physiciansthe people who buy the actual product," says Jocoto's Coldiron. "The demand is a positive, but if a campaign serves to irritate or alienate the actual customer, then all is lost."
"Physicians tend to react negatively to patients learning about a product or procedure before they do," adds Seidler. "So there's a reluctance to approach consumers while there's still a need to educate physicians. A cadenced approach that gets physicians on board before beginning DTC efforts works best."
Erin Reynolds, account supervisor for Archer/Malmo (Memphis), agrees. "As more companies expand their DTC communication, there is a shifting of budgets and strategies," she says. "Marketers must ensure that internal and surgeon customers are kept informed and engaged during the process of speaking to consumers."
In addition to DTC marketing in cases in which it is appropriate, there are additional areas where medical device marketers perceive increased opportunities. For example, Seidler says that many device firms fail to capitalize on marketing opportunities associated with their service programs. "Many manufacturers offer service agreements but don't aggressively market them," she says. "In fact, purchased service guarantees could represent a great perceived value to the customer and an additional revenue stream to the company."
Likewise, Perlotto says that manufacturers must harness evolving technologies to better refine the target audiences for their products. "This will yield more-efficient marketing and higher return on investment with less wasting of marketing dollars and resources," he says. "This means better upfront planning and identification of target audience."
One such evolving technology demanding greater attention is the Internet, Haan says. "Roughly 120 million Americans have searched online for health-related information, and yet most medical device companies fail to embrace or even understand this medium," he says. "Companies should be developing patient-oriented sections of their Web sites, complete with features like product and procedure tutorials, doctor locator databases, interactive quizzes, and patient testimonials.
"Further, beyond their own sites, medical device companies should be considering key-word buys with search engines, HTML e-mail newsletters, and nonbranded sites focused on consumer education," he adds. "All of these new media efforts aren't just to reach consumers; physicians themselves have become increasingly more Web savvy, with an increasing percentage of them turning to the Internet for general healthcare research and specific medical product information."
Larry Mickelberg, senior vice president for strategy and enablement at Medical Broadcasting Co. (Philadelphia) says he expects to see progressively less DTC marketing through mainstream media such as TV, radio, and printespecially for new brands. "More online marketing, including rich media, will join more-sophisticated online tools for motivated consumers, such as self-screeners and symptom assessors," he says. "For devices, we expect a greater variety and depth from online resources, such as how-to-use demonstrations."
"E-marketing in the medical device industry significantly lags that of other industries," says Williams of Boston Scientific. "This industry is behind in terms of basic Web presences, e-mail marketing, and analyticslet alone utilizing new media like RSS and Podcasts. As the cost of sales continues to climb, e-marketing offers a cost-effective channel with tangible, actionable metrics to support business decisions."
Malia agrees that the Internet is one of the greatest untapped marketing opportunities for medical device manufacturers due to the ability to track multiple metrics for visitors to a particular site or advertisement. However, she points out that the Internet's pros come with its cons as well. Although the Internet provides a cheap, fast way to reach the masses, it also eliminates a certain level of control over content, she says. Likewise, certain topics are highly competitive in the online environment, driving up the costs required for a manufacturer to break through the noise. In addition, the proliferation of spammers online has made online advertising and marketing a difficult proposition for legitimate companies, she says.
On the Horizon
In coming years, the popularity of marketing techniques that are currently seen as foreign or experimental by some medical device marketers is expected to grow. "Spending on branding, DTC marketing, and e-marketing will all grow in the face of the rising cost of sales and a significant reduction in access to physicians and customer groups," says Williams. "The return on the cost of a sales call is just getting very hard to justify. The industry will need to devise new channels to their customers."
"We expect to see a continued increasing emphasis on corporate branding, as more and more companies recognize the need to increase the sustainability of their brands," Seidler agrees. "We're seeing that our clients and other companies are reaching out to customers with value-added programs, more so than they have in the past. We also foresee companies continuing to take more-targeted approaches to reaching their customers."
An emerging emphasis on corporate branding is a theme echoed by many marketers. "We are seeing a rise in companies wanting to establish their position in their customers' minds more clearly," says Jocoto's Coldiron. "Hence the increase in rebranding and campaign development spending."
"Our experience suggests that the important, evolving constituencies of consumers, private payers, and others have a limited understanding of many medtech companies and their brands," says LehmanMillet's Curran. "For medtech companies with broad product portfolioswhich typically replace themselves every two to four yearswe believe it makes a lot of sense to look at investing in corporate brands in addition to or in place of product brands."
Adair-Greene's Perlotto, however, emphasizes that such an increased focus on corporate brands might not be appropriate for all industry players. "Corporate branding to a healthcare professional audience can be an important tool for those companies that have a diverse enough offering of products," he says. "While corporate branding may make executives in smaller corporations feel good to see their name in lights, it will likely do little to move the bottom line in terms of product sales for that company. Smaller companies would serve themselves and their shareholders better by focusing on spending the vast majority of their resources on driving individual product preferencebecause that is going to have the most efficient bottom-line impact on product sales."
Beyond new marketing channels, diversified audiences, increased competition, and evolving regulatory challenges, GSW's Mangone points to an even more basic trend that is altering the landscape of medical device marketing: the increased need for medical device manufacturers to build stability into their marketing efforts. "Marketing positions in medical device companies will increasingly be filled by career marketers rather than individuals who are moving up the ladder from sales," he says. "It seems that if we are committed to breaking the commoditization of the industry, we need career marketers in place, with long-term thinking deployed as a strategic advantage.
"There is no reason that brand managers can't organize their marketing teams to achieve both near-term results and a long-term vision," he adds. "Growth initiatives demand it, and there is no downside to orienting a brand architecture within organizations that prepares for future revenue downstream. Companies can and should make investments to accelerate opportunities yet to be imagined. The future cannot be predicted or foreseen, only created."