Pharma: Is Private-label Media a New Kind of Marketing?

The growing popularity of ‘private-label media’, as Booz & Co. like to call it, is one of the more provocative – and potentially disruptive- developments occurring in today’s marketing and media ecosystems, according to their recent report entitled, The Promise of Private-label Media.  The emergence of private label media represents both a compelling way to engage consumers and yet another challenge to long standing media business models - And the more that is spent on private-label media, the less that may be spent on traditional advertising, especially in the digital realm.

So what is private-label media?

Just about every company and brand has a website.  But today, many marketers are going much further. They are transforming their presence into powerful media channels. Private-label media offerings bring the brand directly to the consumer, and allow marketers to bypass traditional media. The term ‘private-label media’ usually refers to a company’s website and the turning of the website into a powerful media channel.  Online, consumers interact directly with the brand and other consumers, strengthening brand relationship, fostering new leads, testing new products and even negotiating discounts. (Definition by Ed McMann)

These are not digital infomercials; the best private label media connect consumers directly to brands. Consumers can design and test new products, enter online forums to talk to others who may share their perspective, and take advantage of unique brand offers and ancillary services. 

The practice is prevalent enough that, as the research firm Outsell Inc. reported in July 2008, about 62% of marketers’ online advertising and media budgets are spent on their own digital media, up from 58% in 2007.  These marketers recognize that with the right mix of content, utility, community and product, they can create compelling premium experiences for consumers.  And they see that these efforts can deliver powerful benefits in branding, relationship building, product testing and lead generation.

While private label media poses great opportunities for companies/brands, it poses great challenges for ad agencies and media companies. As marketers bulk up their private-label media offerings, tensions are increasing between agencies and media companies, as each strives to become marketers’ preferred partner. In a recent Booz & Company study, Marketing & Media Ecosystem 2010, conducted with the Association of National Advertisers, the Interactive Advertising Bureau and the American Association of Advertising Agencies, 70 per cent of the agency respondents said they were taking on “publisher roles”: developing content and other intellectual property for their clients, and 53 per cent of media companies reported they were working more directly with marketers. They are increasingly taking on some of the services formerly provided by agencies that support the development of custom or private-label media. Going forward, it will be increasingly important for marketers to choose their partners wisely.

In non-pharma, company websites began directly targeting consumers about a decade ago. Since then there have been some high profile and expensive ‘mistakes’.  But there have also been many notable successes of strong use of private-label media, E.G., General Mills’ www.Betty Crocker.com enjoys more than eight million unique visitors per month, roughly comparable to the numbers at www.foodnetwork.com – a rival with a popular television network sibling. Kraft Foods’ iFood Assistant ranks among the most frequently downloaded applications on Apple’s iPhone. Procter & Gamble’s Olay for You platform for personalized consumer education in the health and beauty category includes a highly trafficked website and in-store kiosks rolled out in partnership with Wal-Mart. Rapid growth in private-label media has also occurred among business-to-business markets. The Home Depot launched www.hdbusinesstoolbox.com to deepen its connection to contractors, offering them business management tools as well as negotiated discounts and services such as insurance, telecom and printing.

The Lego Group has built an extensive set of consumer touch points using its own digital media: a fan club (of which my lego-loving son is a member), a social network, online games, message boards, online movies and soon its own massive multi-player game. On www.legofactory.com, consumers can design their own products. By joining a network of approximately 120,000 self-identified volunteer designers, fans interact, suggest product ideas and become “ambassadors” to spread the word about new offerings. In this way, Lego facilitates direct conversations between the company and its consumers as well as conversations among the brand’s devotees. This digital marketing innovation is one of the contributors to Lego’s recent success, posting a 19 per cent annual sales increase in 2008 despite a declining global market for toys, according to the Booz & Co. Strategy-Business Report.

Perhaps you’re thinking, what does private-label media have to do with highly regulated Pharma?

While there is much interest in social media right now, and trying to decipher FDA regulations for web 2.0, it is important for Pharma to think about the role that a brand website can play. It remains an important asset with the potential to create a magnet for consumers-but only if it:

  • provides important and useful information, tools, offers and/or services beyond what is offered by other healthcare sites
  • is interactive
  • affords personalization,
  • enables community building with others, and…
  • represents a unique and valuable treatment

Effective private-label media will not replace other forms of digital marketing entirely, but it will inevitably raise the bar in terms of quality and ROI.

Private-label media is not about ‘building it and they will come’, but having a deep and insightful understanding of how your brand can add value and improve the health and well being of non-users and/or patients and their families. It is often reported that consumers generally don’t want to get their information from pharma websites; this is likely the case for certain types of information–but is it not pharma’s formidable challenge to identify the right type of information, tools, services, and experience to help patients succeed and thrive on their treatment regimens? What are other ways that Pharma can benefit their patients?

Pharma: are you ready to excel with private-label media in 2010?

Many pharma brands are pushing out with their websites to secure stronger connections with their patients and families–will yours be one of them?