February 20, 2017
By Cliff Echols, BioSpace.com Contributor
SCORR Marketing recently published the results of our third annual Health Sciences Marketing Trends Survey Report. While the report covers a broad range of information on marketing trends in our industry, one of the more notable findings is the shrinking size of marketing teams.
In 2015, SCORR’s Health Sciences Marketing Trends Survey Report found 60 percent of companies have a marketing team consisting of five or fewer professionals; however, in 2016 that number jumped to 79 percent. Is this an anomaly or is this the start of a new trend in the health sciences industry? If this is the new trend, what could be the cause?
A solid case can be made in favor of this being a new trend based on the findings of a similar question in that same survey. The survey also asked respondents if they had engaged with an external marketing agency in the past year. In reviewing the results, we noticed an increase in companies who are now relying solely on a partnership with an external agency.
So, if we’ve noticed a decline in the average marketing team size and an increase in reliance on external marketing agencies, we can conclude a market shift is happening. But why?
In the 2016 U.S. State of Marketing Work Report (prepared by Workfront), it was noted that marketing professionals are working more hours per week in 2016 (45.9 hours) than they were in 2015 (44.3 hours). One possible explanation for this is the adage of doing more with less.
Historically, when corporate revenues constrict, marketing budgets are usually one of the first places that get cut. If we put this in the context of the health sciences industry, sure the market as a whole has seen ample growth over the past few years; however, that market growth has enticed new players to enter the industry. The problem arises from these new players as they too will demand a piece of the profit pie, but in doing so they are taking profits away from others.
So we have a growing market and growing competition, which is a recipe for smaller profit margins all around. With smaller profit margins, corporate decision makers are limiting marketing budgets, which has the effect of reducing average marketing team size. But we can’t stop here.
Although marketing teams and their budgets are smaller, competition is growing. This is no time to sit back and weather the storm; instead marketing teams must look to maximize ROI in their campaigns and tactics in order to retain (and grow) their market share. In the same Health Sciences Marketing Trends Survey Report, we asked marketing professionals how they are allocating their budgets and what tactics were most effective.
Not surprisingly, marketing departments allocate the lion’s share of their budget for trade shows: attendance, booth and related materials. This leaves a relatively small portion of the budget left over to keep messaging on point and brand identity strong. Here is where the external marketing agency enters.
We’ve gone full circle here. We identified that marketing teams are getting smaller and the external agency utilization is becoming more popular. We also looked into a potential driver for this change in the health sciences industry and identified the effect a driver like this would have on our marketing departments.
Is this trend likely to continue? Yes, but only until market profits dwindle enough to discourage new players from entering the market.
Will marketing departments become obsolete? No. The foundation for which marketing agencies exist is to exploit the benefits of economies of scale. Instead of marketing agencies replacing internal marketing teams, internal marketing teams will likely embrace marketing agencies as an extension of their own workforce to reach maximum efficiency, thereby maximizing ROI of their marketing budget.
Cliff Echols is the Director of Market Intelligence at SCORR Marketing, a full-service marketing and communications firm. Cliff helps clients develop strategic marketing campaigns using the latest market information obtained through primary and secondary research. His demonstrated expertise in data science and research further ensures the quality of insights derived from custom research projects. A veteran in B2B market research, he holds a Master of Science degree in applied economics from Rutgers, The State University of New Jersey.
