 |
Hard Facts About a Soft Spend: How Print Advertising Pays Off by Milton Liebman Executive Summary A major study of advertising campaigns has shown various factors contributed to a successful promotion. Combining print media with detailing provided penetration and power if not the highest ROI. Other contributions to success included an effective message, market position, and adequate funding. Ineffective campaigns suffered from unbelievability, an irrelevant message, market saturation, and/or improper niche marketing. Sure, your company advertises in medical journals. Why? Because it always has. Right idea. Wrong reason. Print advertising in medical journals -- with reasonable funding and a believable, relevant message -- will invariably increase market share and bring a return on promotional investment (ROI). Those are the hard facts on a soft spend according to a million-dollar study by HCI, Inc. of 1995 product advertising campaigns. The study gives insight into advertising strategy and execution that leads to gaining greater market share for a product. Given today's pressure for cost containment, it's nice to be able to support a promotional expenditure with proof that it can bring a financial return. The proof, in terms of promotional ROI, comes from analysis of 20 product campaigns from 11 major pharmaceutical companies (see Exhibit 1) undertaken by HCI, the Princeton-based market research organization. Dollars spent on each promotional campaign varied, and the selection of products was random -- old and new, big and small. But results show an average ROI of $3.27 for every dollar spent in combined media of print advertising and detailing (see Table 1). Print-only brought a better $4.94 ROI, but not the penetration and power that the combined effort achieved. And detailing alone provided greater penetration with less return. It had an ROI of only $3.04. Exhibit 1
Table 1  Source: HCI, Inc. It takes more than money As marketing executives know, successful promotion is not just a matter of throwing money at media. Not all of the 20 campaigns studied were successful. A majority of 13, or two-thirds, had an effective promotional message, according to Marshall Paul, president of HCI, and a return on investment. Along with message quality, there are other factors, such as market position and adequate funding that explain results. The seven ÒineffectiveÓ campaigns, each of which reduced ROI, suffered from lack of believability, irrelevant message, market saturation, and/or improper niche marketing. HCI utilizes a base of more than a decade of research findings against which current studies are applied. Called a Campaign Tracking System (CTS-2000), each study uses a sample of 2000 physicians -- or 40,000 physicians' responses for the 20 campaigns analyzed. The variables of print promotion (mostly journal advertising) and detailing (with and without coordinated sales aids) are measured against each other as well as against a "no promotion" control cell to determine the measured dollar return. Typical message association Promotional effectiveness is determined by factors such as a physician's ad recognition (with the name of the product and company blocked out), product name recall, and association of the major product message with the ad. Taking a "typical" product tracked by the HCI system, here are the results in terms of product message association by physicians with use of differing promotional media. Such testing shows that with no promotion, 10 percent of physicians identify a product message, having learned it through word-of-mouth, convention exhibits -- so-called "ambient" media exposure (see Table 2). Using print advertising-only, association with the product message is increased to 32 percent. Detailing-only, without advertising or use of a sales aid, achieves a low 18 percent message recall, while detailing-only, but with a sales aid, boosts that recall to 31 percent. The best message association is achieved when a product is detailed with a sales aid and is accompanied by journal advertising: fully 62 percent of physicians associate the product message to the ad. Table 2  •All M.D.'s Source: HCI, Inc. The message is the medium Marshall Paul stresses that an advertising message that is "believable and relevant" is the key to promotional success. "When you have the right thing to say in your promotion, you will drive sales." And when the right message is also unique, it becomes even more effective. The message is the medium that provokes prescriptions. Of the 13 campaigns analyzed as effective and profitable, 11 left a message that the physician could respond to. The other two were already number one in market share. "As might be expected, campaigns mounted to promote market leaders provided the highest ROI using any promotional scenario," Paul reported. "In these situations the product name itself becomes the real message." Where the problems are The seven ineffective campaigns produced a negative ad ROI. Not only did the ineffective advertising not pay for itself when it was the only medium used, it lowered the ROI for detailing when the two elements were combined. They illustrate the need for strategic planning as well as execution, as different products face the market in different circumstances. In a classic situation, three had an unbelievable, irrelevant message, according to the study. Two of the campaigns focused on niche marketing, with negative results, because of emphasis on a new minor indication. "It appears that advertising a new minor indication led physicians to reserve the product for the new indication and use other drugs for the major claim," HCI's Paul said. Detailing, on the other hand, effectively balanced use for both the major and minor indications. According to Paul, the results imply that advertising support for the established broader indication should continue when announcing a new minor one. Saturation was the key factor in the final two of the seven programs that did not result in a positive return on promotion spending. Where the products involved were well-established in the market, there was a strong promotional ROI for advertising-only, and for detailing-only but, in contrast to other campaigns, a reduced return when the two were employed together. "At this point, more costly detailing should be reduced since advertising can carry the message successfully at a fraction of the cost," Paul said. High cost/low cost exposures The need for proper balance of media becomes strikingly clear when cost is factored into the formula. The cost of an exposure through advertising is about 30 cents. The cost of a detail exposure is about 80 dollars. Print advertising does not pop off the page and grab the doctor by the collar, no matter what your art director says. But it does attract attention, as studies show, and much less expensively than the cost of a sales call. Marshall Paul puts it this way: "The power of promotion comes from use of detailing but the efficiencies are derived from effective use of print advertising, which are supportive and much less expensive." In other words, advertising makes the more expensive detail work better by providing prior product awareness and post detail reminder (see Table 3). What's the bottom line on spending? Obviously, there is a budget. Also, the cost of detailing, to put it mildly, may not offer much flexibility. In a change from past years, companies are now expanding their field forces. Pfizer has added a fourth sales unit and Bristol-Myers Squibb is increasing staff which bring the total number of company representatives of each to 3,000. "The goal is to maximize potential," Paul says. "The greatest value of advertising is its ability to cost-effectively magnify the impact of detailing. Advertising alone can also cost-effectively maintain a successful campaign." Paul points out that advertising should be looked at as an investment, rather than a cost. Everyone tries to cut costs. Everyone wants to make an investment that brings a return. Table 3  Source: HCI, Inc. Reference: Liebman M: Hard facts about a soft spend; how print advertising pays off. Medical Marketing & Media 1997;32(4):66-74. |
||||||
ARPP Analysis | RAPP Study | AMP/ABM Study | Medical Journal Advertising
Additional Reading | Other Sites | Contact | Site Map | Home
