Financial services, pharmaceutical, and healthcare are ripe for social marketing. Here's why.
Conventional wisdom would probably say that social marketing is impossible in industries like financial services, pharmaceutical, and healthcare due to heavy regulations and requirements for disclosure. More specifically, in the pharmaceutical industry there exists a regulation that requires companies to report "adverse events" to the Federal Drug Administration within 72 hours of "hearing" it. At first glance, this single regulation could render most forms of online marketing -- which are based on two-way communications -- to be out of bounds; especially social media, where people talk online.
Conventional Wisdom Is Not Wise
We'll argue that this conventional wisdom isn't wise at all. There are many other examples where traditional advertising thinking no longer even applies. For example, "Go where the people are," (today, they're on social networks). It used to be true that it would be better to place your ads on TV shows or magazines that had the highest viewership or circulation. Now, even though there are 300 million users on Facebook (125 million unique visitors a month), it doesn't necessarily mean that advertising there will have an impact on sales. People are there to socialize with their friends, not to look at your ads. In fact, Facebook ad metrics have been documented to be far below standard banner ad metrics, which are dismally low themselves.
Another example where conventional advertising "wisdom" no longer applies is advertisers who are still desperately seeking reach and frequency (how many consumers can be beat over the head with ads and how often). So when they hear that a social network like Facebook generates over 100 billion page views per month, they start drooling. Some ad agencies further perpetuate this myth by representing that social networks have finally reached the "tonnage and scale" to be viable alternatives to traditional mass channels like TV, print, and radio. What isn't considered is that those massive page views aren't generated by people looking at ads. Also, the thinking of reach and frequency "tonnage" is diametrically opposed to the greater opportunity of extremely fine-tuned targeting that is possible using self-declared and observed parameters available on social networks.
Traditional Regulations Apply to 'Push' Advertising Techniques
Regulations that are especially heavy in the pharmaceutical and financial industries are primarily concerned with sufficient and proper disclosure of risks. For example, direct-to-consumer drug ads on TV have been forced to refer to ads in magazines in order to provide more fine print on warnings and risks that could not be communicated within the :30 ad. Financial services ranging from insurance to brokerages to mutual funds are required to provide reams of paper that spell out investment risks and warnings (not that consumers read or understand most of it anyway). When advertisers "push" a message out at consumers and make claims about how great their products or services are, regulations step in to protect consumers from exaggerated, misrepresented, inaccurate, or downright false claims.
However, most regulations don't apply to scenarios where the consumer pulls for the information themselves -- by asking a friend about a mutual fund or going online to research a medication. Consumers are in the habit of doing their own search and research, online and through communicating in blogs, forums, social networks, etc. Consumers are looking out for their own interests and don't rely as much on regulations to do this for them. And when thousands of people cry foul about a product online, that has a far more dramatic impact on sales than any regulation ever could.
Social Marketing Is a 'Pull' Technique
So how do advertisers and marketers in heavily regulated industries leverage social media and do social marketing? They have to change their thinking -- in fact, they have to think exactly the opposite of the way they've been thinking.
Social marketing isn't about pushing ads at target consumers, even if you know where to find them. It's about listening to what they're saying. Think of it as free research, to know what consumers care about and are concerned about. Then you can change your marketing messages to address these concerns and play up what they think is valuable.
Social marketing isn't about shouting a made-up claim that your product is great. It's about respectfully asking their opinion and observing how they tell their friends and peers about why they love or hate your product. Then you can continue to innovate and improve your product to better serve their needs and wants.
Social marketing isn't about getting your message to a ton of people (reach). In fact, it's better if only those people who wanted the information could find it, when they wanted it. It may be a tiny number compared to the mass channels of traditional advertising, but it could be larger than the number of people who saw a broadcast ad, remembered it, and took action.
Social marketing isn't about how often you beat people with your ads (frequency). It's about allowing them to find your information in the words they choose to use when they search. It's about being a reliable source of information that others have vetted and agree is a trustworthy and accurate source.
So, is Social Marketing an Option in Heavily Regulated Industries?
It's the only option. As additional regulations begin to force traditional push advertising techniques out of existence, social marketing becomes more important. It may even be the only option. But this requires advertisers to think of social marketing not as a push technique, but a way to do research and to respond to users' pull for information with the right answer and the most valuable information.
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Dr. Augustine Fou is the senior digital strategy advisor to CMOs, marketing executives, and global brands. Dr. Fou has over 15 years of Internet strategy consulting experience and is an expert in social media marketing strategy, data/analytics, and consumer insights, with specific knowledge in the consumer packaged goods, financial services/credit cards, food/beverage, retail/apparel, and pharmaceutical/healthcare sectors.
He is a frequent panelist, moderator, and keynote speaker at industry conferences. Dr. Fou is also an Adjunct Professor at NYU in the School for Continuing and Professional Studies and at Rutgers University at the Center for Management Development, where he teaches executive courses on digital strategy and integrated marketing.
Dr. Fou completed his PhD at MIT at the age of 23. He started his career with McKinsey & Company and previously served as SVP, digital strategy lead, McCann/MRM Worldwide and group chief digital officer of Omnicom's Healthcare Consultancy Group (HCG). He writes a blog "Rants, Raves about Digital Marketing" and can be found on Twitter at @acfou.
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