Healthy Skepticism Library item: 2297

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Publication type: Journal Article

Roner L
Operationalized measurement of marketing programs
eyeforpharma Briefing 2005 Aug 17; (151):
http://www.eyeforpharma.com/index.asp?nli=o&g-p&nld=8/17/2005&news=47332

Full text:

Operationalizing, according to Steve Smith, CEO of Optas, is taking something hard to measure and putting a process together that makes it a repeatable operation. And it is an integral step, he says, toward fact-based marketing.

Smith recently told attendees at eyeforpharma’s Marketing ROI Congress USA 2005 in Philadelphia that if marketing measurement is a special event, they probably haven’t operationalized it.

Operationalized measurement, he says, is routinely calculated and used in repeatable, scalable and systematic ways to become part of the operational cycle of marketing.

Marketing, Smith says, has three different stages of “evolution.” The first is program-based, in which companies “just do it” and then measure its outcomes later. The second stage is operational, he says, and includes putting some of the infrastructure together that makes measuring easier. And the final stage is fact-based marketing.

With the waning return on investment from television advertising, Smith says, the marketing mix for many industries, including pharma, is becoming more complex. And with that complexity measurement also becomes more complicated.

In 1960, he says, to reach 80% of women with a message, it was a simple matter of buying an advertising spot on the three major US television networks. Today, Smith says, you would need spots on about 80 different networks. And there also are more than 17,000 magazines and 4.4 billion web sites that contain advertising.

It is a huge opportunity but a highly complex one.

Program-based marketing requires lots of time on execution but very little with technology. Smith says most pharma companies are currently making the transition from program-based to operational marketing.

Smith finds that organizational dynamics is a key aspect of measuring marketing programs and that with the sophistication of programs is really “stepping up,” operationalizing marketing measurement is providing tools and infrastructure to make it easier.

A prime example, Smith says, is Pfizer’s recent launch of Relpax, a new migraine medication.

“They really did their homework and figured out their target was active, young mothers and that they were not watching TV all the time,” he says.

Pfizer’s research, Smith says, showed that its potential new patients listen to the radio in the car, are on the Internet late at night after their kids go to bed and read magazines in their few quiet moments.

“Those are the types of payouts you get when you measure well,” Smith says. “You can figure out where folks will be and the best channels to reach them with.”

Companies need an infrastructure to do segmentation management, he advises. It streamlines analysis, he says, and allows you to use what you learn from each marketing program on the next one.

Measurement is not complicated, according to Smith, and can “be done on a napkin at lunch” if good experimental design and data are used.

“So much of successful measurement is doing the right thing on the front end,” Smith says.

He suggests getting by-in from everyone involved, especially on setting aside a control group, and cautions that “some really have to be educated about what the value is going to be.”

Smith warns that one common mistake is when brand managers rely on the analytics teams without talking to end users. “You can come up with a great model and analysis, but if the guys making buying decisions about which channels to use don’t understand it, it is going to be difficult to make that pay off,” he advises. “Brand managers, senior managers and analytics teams need to be on board early on.”

Some companies in pharma, Smith says, are already doing fact-based marketing at the project level. For the rest, he says, it’s time to roll up their sleeves and start building the operational infrastructure that will be needed to make improvements.

“Remember what you did yesterday and it will yield great results,” Smith encourages.