I read with interest the report in the June issue of MM&M, "Healthcare Marketers Trend Report 2013." The report benchmarks and analyzes topics that affect pharma marketers such as budgets, channel mix, perceived challenges, and more. One area that resonated with me was the one on how pharma companies choose their marketing/agency partners. The findings show that the larger the pharma organization, the more likely they are to use procurement services and preferred partner lists.
In my experience, procurement or purchasing organizations limit the number of agencies within their organization and partner up with traditional networks for (perceived) cost savings. In reality, I'm not sure I hear often that those cost savings played out as reality. And the limitations might be hurting those company's ability to partner with more specialized agencies with a mind for innovation.
"I do think the procurement pendulum has swung a little too far in the big companies," one consultant was quoted as saying. "To me, you see a lot of the more innovative stuff in the smaller companies, so you have to ask: 'Is procurement inhibiting innovation?'"
Being on the front lines of the agency side of partner searches, I’ve been hearing a few trends of my own lately:
- “We have contracts with networks. But we need more innovative thinking. So we’re maintaining a roster of agencies outside of that list.” – Top 10 pharma
- “We have plenty of holding company agencies we work with. But our sense is there are likely some more interesting and more innovative agencies out there … independent and outside of those networks.” – Agency search consultant on behalf of a top 20 pharma
- “I’m looking for a pharma-focused digital agency with a strength in social media.” – Top 10 pharm
- “My more traditional/branding agencies are adding digital capabilities, so lately they’ve been pushing to do our digital work. But what we’re learning is that they don’t know it as well as they say they do. Things are breaking. And they’re still not staying on top of the changing landscape.” – Mid-size pharma
- "My AOR is handling my digital work. I'm afraid we're missing major opportunities because digital/social/mobile is not their strength." - Top 20 pharma
- “I need someone to help up our game in social media. My current agencies just aren’t cutting it. And they’re really expensive.” – Mid-size pharma
If you’re a pharma brand manager and these challenges sound familiar, rest assured you’re not alone.
So is procucrement inhibiting innovation? If they are, it doesn't have to be that way.
Pharma procurement departments and the marketers they serve can have the best of both worlds. If they must do contracts with large holding company networks and they feel that works for them, great. But if they then feel they aren't quite getting what they need, or if they fear they are missing out on opportunities to innovate, procurement groups can easily set up a roster of agencies outside of that network. These may be the smaller, independent, more nimble agencies that look at things a little differently. Call it a "rogue roster," an "innovation agency list," or "preferred partner" list ... whatever you call it, it can be a source of new ideas and new ways of looking at things.
This month (July) marks my 10th year in digital marketing, and I’ve certainly seen a lot change. But one thing that hasn’t changed is that there continues to be a need for highly specialized firms that not only understand pharma marketing, they look at it through a digital lens. They understand the importance of the digital channel and all its capabilities. And they have a drive to stay ahead of the technology curve and continue to innovate on behalf of the industry.
Agency relationships can be complicated. To be fair, I also still hear from brand managers who would rather manage just one agency, and they’d rather that agency’s strength be branding. Or they feel that the digital work that their traditional network agency is doing is “good enough” for what they are trying to accomplish. And that’s okay. Sometimes the right agency setup depends on your own comfort level as well as partnerships with long-trusted partners.
I’ve heard some people say “digital marketing will cease to be digital marketing … it will just be 'marketing.'" And same with social. And same with mobile. But I dare to disagree. These channels are more highly specialized and rapidly evolving than any channel before them. They demand a new level of attention, appreciation and understanding. And often, not just any old agency will do.