B2B marketing is often overlooked. It’s not as fun as B2C. It’s not as conspicuous. Everyone wants to make cutsy websites and fun TV ads. B2B marketing is often regulated, full of data, and meant for audiences that know a lot about their market. Anyway, there’s not much money in it. Is there?
Let’s just look at one particular industry – Pharma. Burdened with regulations and layers of approvals, unless you’ve worked with the industry you likely don’t appreciate the work done for it. I recall showing work my team had done for a particularly large pharma product to some agencies that were interested in me. They were hot agencies, known for their sexy consumer oriented advertising for travel companies, automotive, packaged goods. They looked at what we had done as sub par.
OK, pharma is clearly not sexy. But is it worth paying attention to?
According to this article The 12 Companies That Spend The Most On Advertising America’s 100 biggest advertisers spent $109 billion in advertising in 2013. Not one pharma company. Car companies, cable companies, cell phone networks, Disney. Fairly predictable. Fun clients. You get to do sexy, entertaining ads for them.
According to this article Big pharmaceutical companies are spending far more on marketing than research the 10 biggest pharma companies spent nearly $100 billion in marketing in 2013. You probably noticed right away that this is marketing, and the other article was about advertising. But how is it possible that an industry could be spending so much on marketing, and not even show up in the list of biggest advertisers? After all, just 10 companies in one industry are spending almost as much on marketing as the 12 companies spending the most on advertising.
According to the Big Pharma article approximately 90% of pharma marketing budgets go to B2B marketing, and only 10% goes to B2C. That’s right. You might feel like you’re seeing ads all the time on TV and in magazines for an array of medicines to help you sleep or wake up, or help your skin clear up, or your eyelashes grow, but that’s just the tip of the iceberg. The vast majority of pharma marketing spend goes to reach the people prescribing medicine – doctors.
According to Kaiser Family Foundation there are a little less than 900,000 medical doctors in the US. That’s primary care and specialists in every state in the union. Let’s assume they’re all reached out to by the pharma industry, which is doubtful. And let’s only think about the marketing budgets of the 10 biggest companies. 90% of $100 billion is $90 billion. Divided by 900,000 that’s $100,000. There’s a $100,000 marketing budget to reach each individual medical doctor.
To put that in perspective, if you had the entire B2B marketing budget of the 10 largest pharma companies to reach all of the medical doctors in North Dakota, the state with the fewest docs at just 1,802, we’d be talking about a budget of $180,200,000. But let’s be realistic. You wouldn’t get all 10 companies to give you their business. Just one. So that would be about a tenth of that. Just $18 million. Now imagine the budgets for California, New York, Florida and Texas.
Sounds worth considering now, doesn’t it?