How to determine the DTC budget

QUICK READ: You’re getting ready to launch a new drug. The sales projections are in, the salesforce is budgeted but now you have to convince management how much you need for effective DTC. Here’s how…

Among the biggest line item that we usually do for clients is a review of budgets. Budgeting is part science and part influencing decision-makers. However, the changes in the way consumers are consuming media and staying away from their doctor need to be factored in. The message you develop has to be so good that it negates the patient’s fear of going to the doctor’s office.

Hopefully, before you determine your DTC budget you have a nice set of market research findings. You have tested your key message(s) and have a feel what will motivate your target audience to ask for or switch to your product.

What I find a lot of times is that although DTC marketers have a target market they don’t have a psychographic profile of that target market. You need an in-depth understanding of each micro-segment within your target market. Where are they online? Where do they go to get up to date medical information? What TV programs do they watch and what magazines/newspapers do they read?

Once you have that it’s time to get down to business. A number of businesses offer simulated media spending breakdowns. It’s an online spreadsheet that allows you to enter certain budget amounts for each bucket such as digital, TV, and print. By changing the mix you can determine the effect of your spending.

Even with these simulators you need to plan for unknowns. For example, it seems that consumers are staying away from a lot of retail businesses that have reopened because they are scared. So can a patient use email to contact their prescriber to ask for your product or does their doctor want to meet with them in person first?

This brings me back to the message. The message has to contain two key elements. The first has to be a message that is personally relevant to your audience in THEIR terms. The second is that you need to educate patients on the dangers of putting off treatment. Right now the delay of essential tests and treatments are going to cost us a fortune.

This message should not scare online health seekers but, rather it has to appeal to their rational side. Another mistake marketers make is talking down to consumers who are ver savvy, especially when it comes to THEIR healthcare.

So how much over time?

OK, you have a budget and your rationale is tight. Don’t think that you’re going to get a blank check right away.

We usually recommend that brand teams set up “triggers” for funding, usually by quarters. This is done by setting quantitative measurements by group. For example, you might want to say that given your projected DTC spend you’re going to attain 35% brand awareness with your target audience as determined by your market research people.

Other measurements, in the introduction phase, also might be the number of people who come to your website coupled with the bounce rate or the number of people who download the coupons.

You also need to know when to pull budget dollars from one bucket into another bucket. TV is great at awareness but once you reach a certain. awareness level you need to think about where you can spend to “pull” your audience into the brand.

There is a mistaken belief among DTC marketers that pulling the GRP’s on TV ads is a mistake. That is garbage. Running TV ads longer and longer actually have a negative correlation on awareness and sales.

Finally, the issue you need to continually monitor is the effectiveness of your message. I’ve seen brand do a lot of testing and stick with messages too long before making a change to a message that’s more effective. If your website is not doing well you need to ask “why?”. If your TV ad missed the target you need to challenge your agency who gets pid even if your DTC is ineffective.

Being a DTC Director can be a very stressful job. Too many DTC people spend more time covering their asses than correcting and optimizing their media. There is no one formula that’s going to work for all brands so don’t fall into the trap of doing what someone else did.

Originally published at https://worldofdtcmarketing.com on June 15, 2020.

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Richard A Meyer

Richard A Meyer

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Marketing and Political thought leader — Writer- Audiophile