Healthcare practices adjust to tightening budgets

Though healthcare is faring better than other industries at the moment, the sector and its PR practices are not immune to economic strains.

Though healthcare is faring better than other industries at the moment, the sector and its PR practices are not immune to economic strains. Agencies are reprioritizing projects and redistributing resources amid increasing client pressure and thinning budgets.

Chris Foster, chairman of Burson-Marsteller's US healthcare practice, explains that clients in that sector are tightening budgets because the recession and new presidential ad-ministration have created a complex and uncertain environment.

“We have to... be more efficient, whether it's leveraging the digital space or working with third-party groups differently,” he says.

Mainly, adds Foster, the agency is under more pressure to provide clients with short-term results from healthcare campaigns.

“If you think of some of the historical disease education campaigns, [we'd] go into markets and over a year or two, [we'd look to] raise awareness,” he says. “Now we look at specific targeted media... so we can measure results differently.”

He says that in some cases, the team is now providing clients with reports on market conditions, consumer behavior, and health outcomes in three-month intervals.

Aside from budget cuts, he says that clients now have generally “less appetite for investments in new ideas.” In order to have campaigns that deliver better results, there's more integration between the agency's public affairs, technology, and corporate practice groups.

“We want to move toward proven campaigns and strategy that we know will work because there's pressure to deliver ROI,” notes Foster.

At Schwartz Communications, dealing with budget cuts means taking on more project-based work in hopes of securing long-term accounts.

According to Lloyd Benson, EVP at Schwartz, the practice is growing despite the down economy, but price competition between agencies is more significant.

“We're confident in our ability to prove ourselves to the [short-term] client and make that a more lasting, durable relationship,” he says.

He explains that for existing clients – privately held, venture-backed companies are watching every dollar, Benson says pointedly – the firm is reprioritizing objectives to focus only on critical areas. For example, if a client has a pre-clinical trial product not yet on the market, the firm might drop a marketing objective aimed at consumers and focus on generating physician awareness.

Julianna Richter, EVP and global client relationship manager in Edelman's healthcare division, agrees that clients are tightening budgets. She says that healthcare teams might save on costs by integrating efforts and executing one central campaign across global markets.

“Almost all clients are looking for [their] agency to be more efficient than ever,” adds Richter. “In the past, we might have five teams in different markets working on five distinct programs [for a client]. Now, we're really looking at an integrated approach, one central campaign being pulled through in local markets.”

Richter says the practice is putting a fine point on consumer messaging that focuses on the long-term benefits and value of medication and treatment.

Key Points:

Due to recessionary pressures, healthcare practices should provide clients with short-term campaign results

Taking on short-term projects can lead to long-term client relationships

Agencies can save on global costs by integrating campaign resources in local markets

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