PR: The DTC You Don't See

Medical Marketing & Media, by Matthew Arnold, February 2004

There was a time when communications professionals languished on the fringe of the pharma and biotech marketing mix, called on only to deliver bad news and defuse crises. But now, with the increasing primacy of the consumer, proliferation of constituencies and a wave of restructurings, PR is emerging from the shadows as a strategic force.

Genentech's head of corporate relations, Mary Stutts, reckons the drug industry could do with fewer celebrity endorsers and more heroes. That's why Napoleone "Napo" Ferrara is the new face of Genentech.

Ferrara isn't a high-flying C-suite denizen, nor is he a polished celebrity pitchman. He's less Bentley. more Bunsen. And yet, he's in the running for this year's Fast Company Fast 50 list of innovators. Dr. Ferrara is the guy who, during the time Genentech allots its scientists to work on pet projects, developed Avastin, a potential breakthrough colorectal cancer therapy that many in the medical community had said couldn't work. And increasingly of late, he's getting out of the laboratory to meet with reporters as part of Genentech's oncology leadership programming.

Gone are the not-so-distant days when pharmaceutical and biotechnology companies only talked to physicians, Wall Street and the elite press. Now, the drug industry must court consumers and third-party advocates as well—and it's an industry badly in need of a friendly face. All that has brought about a renaissance in pharmaceutical public relations, and with it, fresh ideas on how firms should present themselves and their products to their various publics.

"We're really featuring [Ferrara] a lot and talking about his persistence," says Stutts. "Just like we try to put a face on the patient, we need to start putting a face on the people working at the company—the everyday person who's coming to work every day doing their job, and how they're coming up with these novel therapeutics."

PR proves its value

Not only does Dr. Ferrara put a human face to the company, he does so at far less cost than a gauzy corporate advertising campaign ever could.

"It's still a very cost-effective way to target audiences," says Steve Lampert, executive director of public affairs at AstraZeneca. "Our brand PR budgets have continued to increase pretty significantly year on year, and the dollars committed to PR in the total marketing and promotional mix has been increasing significantly for the past several years. We're much more integrated now, and I think the marketing teams truly feel PR is now an integral part of their total promotional mix." Lampert says his team has benefited from being able to demonstrate the value of its work.

But just how to do that in a field so littered with intangibles is a quandary that has long bedeviled communicators. The most important measure may be the most obvious. Setting baseline targets, whether quantitative or qualitative, is key, says Lori Kraut, senior director for U.S. commercial communications at Aventis. "We're always being challenged by our marketing colleagues to show the value of the work we're doing, and that requires us to always look for ways to demonstrate that. It may not be something tangible, in the case of, for example, explaining the value of relationships with third parties."

"What you need to do is demonstrate business impact," says Rebecca Tillet, director and team leader, Pfizer U.S. pharmaceutical public relations. While some in the industry agonize over the unavailability of precise metrics for calculating the return on investment of PR, Tillet points out that even packaged goods advertisers can't agree on a model.

Lampert says new technologies have eased the task somewhat, noting Biz360, which allows clients to track media impressions in real time online. "So if we're at a major medical convention, we can quickly get an analysis of how we're doing in terms of awareness and publicity results versus our competitors," says Lampert. "It's much more in line with the expectations of commercial marketers, because it's similar to what they're used to seeing on a marketing analysis."

"Everybody understands the media impressions, and that's fine, but we're creating our own model," says Stutts. "We're looking at things like increasing product awareness, especially pre-launch, when there's no marketing going on. We've also been looking at local prescription sales increases, and we've been able to measure that in some local markets. That's something we certainly want to investigate more."

Genentech recently committed to setting a PR budget for a product earlier in the commercialization process—typically before Phase III trials begin. "It was a big success for PR," says Stutts, "and it shows how much this company values PR. For Genentech, it's particularly important, because we focus on novel therapeutics and first-in-class drugs where there's a lot of education that needs to be done. So people get it."

Restructurings put the consumer in focus

Stutts is typical of top biotech communicators in that she reports directly to her chief executive. Biotechs run lean and mean. Lacking the funds for the massive DTC advertising of their big pharma counterparts, and with fewer products that need plugging to skeptical investors and prospective partners earlier in development, they rely heavily on PR to get the word out on their drugs, and industry communicators are far more often heard in the boardroom than are their counterparts in pharmaceutical firms.

But pharmaceutical communicators, until recently, often found themselves shut in isolated silos, with few ties to upper management or even to their colleagues in marketing. With broader support, many industry communicators have gained a far stronger share of voice among senior management.

"It's important to see how the communications structure is organized when attempting to determine where the locus of control is," says Aventis' Kraut. "Within some companies, PR is subsumed under marketing management. At others, it's a line function up to the top officer in a region or even at the corporate level, and that speaks volumes about how PR professionals are viewed in that company." Kraut views the communications function as being better served when treated as a specialty, a center of excellence in which communicators are housed together and can learn from one another. The trend seems to be one of communicators diversifying and reshaping their teams—long limited to corporate communications—to incorporate product communications personnel, often housed with brand teams. Both Pfizer and Schering-Plough have recently reorganized their departments in this way.

Jeff Winton, group vice president, global communications at Schering-Plough, is an old hand at product PR, having earlier built the Pharmacia product PR team. "Using PR as part of the marketing mix is something that we're doing much better than we were 10 years ago," says Winton, whose ongoing restructuring of Schering-Plough's 20-strong communications department includes the recent hires of his Pharmacia colleagues Mary-Frances Faraji as head of global product communications and Rosemarie Yancosek as executive director, global communications—both new positions. Winton also hired a longtime AT&T communicator, Fred Malley, as manager, global internal communications, and says he's committed to hiring from outside the industry as well as within. "[Malley] thinks differently," says Winton. "He knows how to communicate with consumers because of the work he's done with Ma Bell. It doesn't make sense to only hire people that think and act and look like we do. You need to hire people with a different outlook and who know how to truly communicate with consumers."

Winton says that an increasing openness among communications executives to hiring from outside the industry has brought new skill sets into the industry and raised the caliber of staffs. "There's a very good abundance of PR people in the industry right now," says Winton, "and I think that's because we've gotten beyond this myopic approach where we were only hiring from within the industry."

Building on Winton's Pharmacia PR model, Pfizer recently launched its first product communications unit, with eight communicators housed within product marketing teams. "It's true that until recently, we didn't put the muscle behind product PR," says Tillet, "and I would say that's part of the evolution of the industry toward being more consumer-focused and utilizing a greater part of the marketing mix."

Going global and courting allies

The growing value of global markets—particularly Japan and Europe, where most DTC pharmaceutical advertising is forbidden—has heightened the discipline's profile and brought about a global realignment, parallel to that taking place within marketing departments and their vendors, breaking down the traditional departmental divide between U.S. and international units.

"We run communications here as a network, and we have well over 200 communicators worldwide across all companies and divisions," says Novartis head of global communications, Bob Pearson, from his new roost in Basel, Switzerland. "It's very important for us to focus on the 24/7 news cycle on a global basis, and that's really what pulls us together as a team."

"Certain customer groups are emerging as being of greater importance than they might have been," says Avenus' Kraut. "Look at the senior markets, the diversity markets, the employer market, the government market." And this explosion of constituencies has, in turn, made cultivating relationships with third-party influencers more important. "It's expanding the PR model to be more a public affairs model," says Kraut. "We are, of course, keeping the traditional PR and media components and ensuring that we have the skills and capabilities necessary to work with the media and place the stories, but looking from a public affairs standpoint, ensuring that we have the ability to work with third-party constituent groups in a grassroots fashion to really help people make the healthcare decisions they need to make at a much more personal level."

"We've really gone from being a PR group to being a public affairs group," concurs AstraZeneca's Lampert, "now consisting not just of product PR, but also ally relations, government affairs, federal and state public policy, corporate communications and community relations. We want to make sure we're presenting integrated public affairs plans to our commercial people, and that's a big change."

That change has been fueled, in part, by the DTC revolution, which opened industry marketers to promotional methods outside the traditional mix and fostered a demand for consumer communications that go deeper than advertising. It's also a result of the unprecedented pressures the industry is under, from Washington and Wall Street to Main Street. Schering-Plough's Winton takes a Nietzchean, that-which-does-not-kill-me view of the industry's challenges. "I think we're coming out of this adversity stronger," says Winton. "It's been a positive thing from a communications standpoint, because it's making us rethink how we tell our story and to whom we tell our story, and we're getting our story out to the end-user now."