Running On Instinct vs Return On Investment

In the Across Health annual Digital Barometer survey, ROI is consistently one of the top 3 hurdles in digital adoption; in China it is even number 1. Paradox: why does it continue to be so difficult to measure the impact of digital, arguably the most quantifiable channel around?

Perhaps it has to do with 3 things. First, the business case of a digital project is rarely ever done before it is launched. Assessing the relative cost per contact based on the fixed & variable project cost, the expected reach and the estimated impact based on a clear definition of the expected behavioural change is not a standard procedure yet. If you have not defined the key impact metrics upfront, how will you be able to measure them afterwards? This is what I would call “running on instinct”.

Further to that, budget plays a key role too. How can you expect a 20-40K digital investment to “move the needle” in a rep-dominated environment with outlays that are 100, 200 and even more times the digital budget? Other industries spend up to 20% of their marketing budget on digital, in pharma it is only 7-8% (and only 1-2% of sales & marketing budget).
Last but not least, ROI is arguably the most difficult, time-consuming and expensive way of measuring digital impact. In advanced industries like FMCG, an impact quadrant is used, with 4 types of metrics: 2 channel-related quadrants (quantitative and qualitative) and 2 brand-related ones (also qualitative & quantitative). This 2x2 should be seen as a sequence: if the quantitative channel metrics (for instance “visits”) look good, the qualitative channel scores are great (for instance “channel NPS”), and the qualitative brand perception is positive (for instance “intent to Rx”), you can assume that the quantitative brand impact will be high (ROI etc). So, in most cases, 3 types of metrics suffice to monitor the impact of your initiative. In addition, measuring ROI is sometimes not allowed (medical education), and it is always very expensive (50+K) and comes with a time lag (2-3 months). More importantly even, there is no such thing as the absolute ROI of a channel – it always depends on the competitor activities and the quality of your strategy & (integrated) execution.

One of the key leading metrics we recommend is the well-known Net Promoter Score (NPS), which is a good indicator of sales evolution - also in pharma. The other one is the “rep equivalent” model, in which you relate the impact of any offline/online channel to that of the gold standard: the representative. These assessments are always done for a specific TA, geographic market and physician type, and hence give you a robust assessment of the relative impact of say erep vs website vs vdetailing vs rep and you can start to construct your multichannel campaign based on rep equivalents and cost per impact. On the consumer health marketing side, the same can be done based on the “TV equivalent” model.
So, am I suggesting not to measure ROI at all? Certainly not. In high-investment innovative pilots, I would absolutely recommend to add ROI to the impact measurement set. But for more obvious projects, I would recommend sticking to a limited set of metrics within the 3 other quadrants…Indeed, is anyone still asking what the ROI of a telephone is? in the “New Normal”, everyone expects you to offer your services “anywhere, anytime”… not offering this interactive channel would be putting you squarely at a competitive disadvantage!

Written by Fonny Schenck

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