Marketing a Biotech Startup
From the Classroom to the Fieldby Anjali Kansagara and On Amir
The marketing budget is a key driver of how one’s marketing plan is implemented. The strategies and tactics defined in a marketing plan determine how the funds will be allocated to bring that plan to reality. While some things are absolutely not negotiable, there are other elements of a marketing budget that can be negotiated and, if executed strategically, can help you maximize your marketing dollars. The goal of this article is to provide a framework for ascertaining the next steps once a marketing plan has been thought through and a budget has been approved. In a rigorous MBA program or a series of intense marketing courses, you may have learned the key frameworks of marketing — sometimes referred to as the 3C (company, customer, competition) or 4P (product, price, place, promotion) analysis and the importance of a positioning statement. What you may not have learned is how to operationalize the marketing plan, and the strategies involved in optimizing the marketing dollars in the process. We aim to open this discussion here, and carry it further in an interactive online blog open to the Rady community, where we can harness the collective wisdom of Rady professionals.
Back to Basics
Assuming that you are indeed a marketing professional in a startup environment with limited time, money and human resources, you may not have the means to write a formal marketing plan. However, it is imperative to conduct the 3C and 4P analysis. With the first framework, you are essentially aiming to understand (1) the capabilities of your own company and the product or products that you wish to bring to the market based on your company’s core competencies, (2) the needs and wants of your customers, and (3) the competition, what is already out there and what may be missing. By understanding these three C’s, you will be more successful in bringing the right product to the market.
The 4P analysis focuses specifically on the product. The first P is for product, and defines the features and benefits of the product. The second P is very important, but often underestimated or misjudged in the startup environment — and that is pricing. Typically, with lack of historical data and/or funds for a thorough pricing study, products are often mispriced on the low side. The third P stands for place and refers to the channels of distribution. Will the product be sold directly, or via a distribution network? The most important question to ask when setting up product distribution is: Will there be channel conflict? Finally, promotion — also known as marketing communications strategy — focuses on such issues as: how to get word out about your product, and where to advertise, to whom, in what medium, etc. The combination of these two frameworks is the “positioning statement,” which clearly states the purpose of your product(s) to your target customer/audience.
The Marketing Budget
It is not our goal to suggest how you should divide your marketing dollars, for each company may have a unique set of goals that drive the marketing budget. For example, depending on a company’s life cycle, one company may be focused on laying down its marketing infrastructure while another may be focused on customer and/or channel acquisition, and yet another may be ramping up its communications. However, it is worth mentioning that it is important to put the budget within the context of a bigger picture and leave room for revisions. The ultimate goal of marketing, especially in a startup environment, is to support the sales team and drive sales for top-line growth. Just as the small size of a startup allows it to be nimble and make rapid course corrections, a marketing budget should also be nimble and responsive to overall changes in a company's strategy. This responsiveness can take many forms. One example is in advertising and conference booking: don't commit all of your marketing dollars too early. It’s prudent to plan ahead, but keep the dollars liquid by making advertising space reservations or booking only key conferences where your company must have a presence.
As we previously mentioned, we plan to begin the conversation here and carry it forward in an interactive forum via an online marketing blog. The significance of marketing operations is often minimized and reduced to being considered as mere execution of tactics. However, in reality, a well-thought-out, strategic approach to implementing the tactics can make the difference between a successful startup and one that’s barely hanging on. Our goal is to fill in the knowledge gap between marketing theory in the classroom and applied marketing in the field through our discussions on specific components of marketing operations. A few topics of discussion include implementation strategies for the advertising plan, understanding biotech advertising and the various available options, navigating through the life science conference jungle, marketing materials for the biotech startup, marketing coordination and logistics tips, tradeshow booking and related communications strategy. Although the example discussed herein is specific to biotech startups, this approach can conceivably be applied to other industries and organizations.
We will begin our discussions with biotech advertising. Advertising is a major component of any reasonable marketing communications plan and budget. How the funds are spent has a direct influence on marketing's overall goals and effectiveness. While there is much written about general consumer products advertising, not much can be found about biotech or life science product advertising in a startup environment. Simply having the knowledge to ask the right questions is enough to get most marketers on the path to success. In this regard, we ask: How does one navigate the maze of the biotech ad world, especially with a limited budget, limited human resources and limited time, all the while competing with the “big fish?” Many looming questions may come to mind, such as whether to hire an agency or go direct, comparing print and online communication strategies, and so forth. But often the most crucial question is, simply, where to start? Where’s the best place to begin if you’re completely new to marketing management? We hope to provide you with a few tangible tools that will allow you to take immediate action on your advertising strategy as a marketing professional in a biotech startup.
As you sit down at your new desk, you will probably face several pressing decisions. You may need to place an ad in a journal, assess an online communication strategy or even decide what type of communication should go out next. Let’s first explore these micro-decisions, and then zoom out and look at the bigger picture. Assuming that you plan to advertise in a life science journal, the first step is to review the advertising kit of each journal you intend to advertise in. The advertising kit is usually accessible online at the journal Web site and includes data on the target audience, distribution, advertising rates, frequency, ad specifications, etc.
In the vast life science world, it’s easy to become lost in the numerous venues available. How do you decide which journal to advertise in? Should you go with a top-tier journal, a tabloid or a targeted journal with a smaller distribution? Furthermore, you have several advertising options available under the guise of what are called application notes, tech notes, corporate profiles, protocols, case studies or product/supplier showcases. And, of course, each has a price tag. First off, determining which journal to advertise in may, in part, be dictated by which conference or tradeshow your company is committed to attending. Typically, each one will have a conference publication that is officially sponsored by the conference organizers or the society which organizes the conference. Perhaps the impact factor of advertising on the outside back cover (OBC) of a top-tier journal that will also be distributed at the show may be significant to your company's product launch and may be worth the premium position price tag.
A second key decision is whether to advertise in print, or online or both. Even with all the sophisticated technology available that tracks online users to better and more accurately calculate the return on investment, it seems that the strictly online option may not reap the rewards and results that one might expect, especially in the biotech world. However, it is quite difficult to calculate the ROI for a print ad, even with creative tracking strategies such as call to action via a Web site landing page. The jury is still out on whether print ads trump those online, or vice versa. However, it's definitely easier to track the ROI for online ads.
The third important decision concerns the type of advertisement. The costs of anything more than a simple print ad are significantly greater. However, if a well-written, informative tech note or a case-study — even if marked as advertisement — can provide tangible benefit to the reader, it can be referenced in subsequent ad copy, thereby improving the return on the initial expense.
In this regard, a successful advertising plan is based on a balanced communications plan. There are many options for getting the word out and advertising your company and products. But, how do all the individual components fit together? With so many options, you must ground yourself with at least one anchor point, which will then allow you make subsequent strategic decisions. And this doesn’t mean positioning in a strategic sense, but specifically where you start when you come to work Monday. One anchor option that is useful is the conference schedule. Once the conference schedule is in place, it can become the driver of other key marketing activities within your company. For example, the conference schedule can then drive your advertisement schedule, which then may dictate your product launch schedule, which in turn may affect the rate of the new product development cycle. The advertisement schedule at the next level of granularity may be dictated by the ad venue’s editorial calendar. In some cases, space and availability drive the advertisement schedule, but this is typically not an issue for a small biotech startup because the price of a single ad may exclude you from competing for the most coveted ad spaces, namely, the OBC.
This scheduling approach allows you to start estimating the necessary funds and optimizing your planned activities given the budgetary constraints. You can then review the effectiveness of these scheduled activities as specific goals measured over specific time periods. For example, you can see whether an ad in a peer reviewed journal increases traffic to your Web site. Obviously, the goals need to be set in advance, but the scheduling approach makes it easier to operationalize and to meet those goals.
And, there are more issues. Suppose you decide that an ad in a journal might be a good marketing investment. First, you need to relate this back to the basics of the 3C and 4P analysis and the positioning statement — determine the target audience, the state of the target audience, and your goals. This is great, you say, but how? What questions do you need to answer to decide on the journal and on the ad? What are the parameters that actually need to be decided upon? Well, many. Here is a list of the types of questions you should answer before you sign the insertion order (I/O):
- Who is the target readership?
- Can the readership be described by title, function, etc.?
- How is the journal marketed? What is the publication distribution?
- What is the conference distribution schedule for the print journal?
- Is there a business publication audit (BPA) statement available? How is their readership changing (annual growth rate)?
- If advertising online, what is the average traffic to the Web site? What is the average time spent on the advertising Web site? What is the average number of page views per visit?
- How is their rate card structured for online advertising? Is the online space rental based on time, such as cost per month, or is it fixed “cost per mille” (CPM) aka cost per one thousand impressions? How often do they provide traffic reports?
- Are their electronic table of contents (eTOCs) opt-in/out?
Remember, it’s your budget, and you have to choose the best vehicle for your messages.
While having a solid understanding of the reach and frequency of an ad is important, negotiating the price of that ad space is just as important and can help bolster the return on your marketing dollars. Advertising space is very negotiable, at least in the life science publications. In addition to seeking a lower price, other strategies include receiving comps, such as agency discounts and honorable editorial mentions.
This is simply the beginning of a discussion on marketing operations, in context of a more global company marketing strategy, for the startup marketing professional. These and many more questions will be addressed in subsequent editions of the Rady Journal and in a marketing series on the Rady Marketing blog. The goal is to bridge the gap between the classroom and the field, and make marketing a powerful business tool.
Anjali Kansagara (’07) is a marketing professional at a San Diego biotech startup. In her dual-role managing software and hardware product marketing and marketing communications, she makes strategic and tactical decisions on corporate communications and advertising. Anjali brings a well-rounded perspective on the application of classroom concepts in the field.