Is your DTC budget working?

QUICK READ: The question that most DTC managers are going to be asked is “what happens if you cut your DTC budget by X%?”. That’s when you go back to your desk and, in a panic, call your agencies for help to justify your budget dollars. How much do you really need?

A lot of DTC people feel that they are free to spend allocated budgets. The reality, in today’s market, is that you’re probably going to have to not only justify your spending but deal with potential budget cutbacks.

So how can you determine which DTC buckets are providing the best ROI? The first way is to conduct research with new customers and simply ask “what made you ask for/about our product?”. We did this for a diabetes drug and the DTC Director was really taken back by the fact that most new patients were recommended the product by their doctor, not the DTC ads.

With TV ads you’re looking for a correlation between GRP’s and new Rx’s. However, you need to be careful as there is usually an uptake once the product is introduced. Once the introductory period is over a great way to determine if your TV ads are effective is by measuring awareness/ new Rx’s in markets with full DTC vs. markets that are blacked out in a test.

You can also use digital measuring tools. When a TV ad runs in only a handful of markets, you can set up audience segments in Google Analytics and run a test. Set one market as a test, and set other comparable markets where the ad isn’t running as the control markets. You can then analyze lifts in direct website traffic, organic search, and branded paid search to quantify the lift in demand driven by TV relative to comparable control markets. Armed with this knowledge, you can increase investment in approaches proven to work and reallocate resources from those that aren’t. Or, as we like to say, “Spend less, make more.”

Neilsen can also help. NielsenDigital Ad Ratings provides you with the metrics you need to understand who a campaign reached online. By combining aggregated, anonymous demographic information from participating online data providers with high-quality Nielsen Cross-Platform Homes Panel data, Nielsen Digital Ad Ratings delivers several advancements critical to improving transparency, efficacy and consistency in your online advertising campaign. Overnight, TV-comparable metrics such as reach, frequency and gross rating points (GRPs) by age, gender and demographic market area enable easy cross-screen measurement and evaluation. Nielsen Total Ad Ratings takes this one step further by measuring the reach of a campaign across TV and online, revealing who saw an ad online, who saw it on TV and who saw it both places—allowing for strategic duplication and incremental reach.

Notice that you’re using digital to help measure your TV. This is crucial. Today, patients don’t run to their doctor after seeing a TV ad for a new prescription drug. They go online either to your website or by using Google. But that’s not the whole story. You need an in-depth understanding of what they’re doing online. For example, how many of your website pages did they read, what was the time on the site and, perhaps more importantly, where did they go after visiting your website.

Finally, you need an understanding of the intended action vs. lag time. People may want your new product but it may take them 2-3 weeks to get into their doctor to ask about it.

The bucket which can be measured extensively is your digital spend. Website metrics, including custom reports, can tell you what people are doing on your site but, more importantly, they can give you a clergies picture of how they are going through the decision process via the path through the site.

The biggest waste of DTC dollars that I have observed are in two areas; Google paid search and TV ads. The TV ads usually continue to run because the media has already been paid for but DTC managers need to understand that running ads too frequently can backfire as people get tired of seeing them.