Two Ingredients Your DTC ROI is Likely Missing - Return On Focus Return On Focus | | Return On Focus

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Two Ingredients Your DTC ROI is Likely Missing

I have had the opportunity through our Level of Evidence (LOE) appraisal service to examine more than a dozen third-party developed DTC/DTP ROI models that outline the business case behind the investment. Over the years, I’ve noticed a consistent pattern to all the ROI models examined. . . no, it’s not that the company creating the model has a significant stake in the model proving a positive ROI for DTC/DTP. That could be a whole other blog post!

IngredientsIt’s that two essential ingredients for the DTC/DTP ROI Model are missing all together:

  1. Relationship between Reach and Investment – The number of potential patients you’re able to reach via media execution is inextricably linked your investment levels, unless you really only have one media outlet. The practice of using a general DTC reach average or an even more general percent of the disease prevalence as the reach number in your DTC model ignores the fact that your media investment level has a profound impact on the number of patients you can reach. A sure sign of this is crazy large reach assumptions like ~ 50% of the market within the first year with a modest DTC budget. It not only doesn’t pass the red-faced test, but it also invites senior management to question the need for additional DTC after Year 2 when you’ve saturated the market based on your model.
  2. Impact of Creative Execution – Several key variables that may already be in your model – unaided awareness, aided awareness, likelihood to take action, branded request, etc. – are dependent on the power of your creative execution. Most ROI models, even those developed by the consumer agency, all but ignore the impact of the creative execution. Market research companies, such as IPSOS, Millward Brown, and Phoenix Marketing International, have DTC/DTP creative norms that can be and should be leveraged to look at the elasticity of your model depending on an average creative execution versus an above average creative execution.

It’s clear to me that Clients responsible for evaluating the DTC marketing opportunity get worn down by just collecting all the basic data points to put together the business case. Seeking counsel from an objective, external party to gut check the assumptions and corresponding numbers could not only re-energize the DTC marketer, but also ensure all the right ingredients are accounted for in the final model.

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