Medicare Plans: Moving advertising in-house?
In my 20+ years in advertising, I have seen a shift in how health plans utilize creative agencies — from agencies of record, to specialized agencies, and now to the continued growth of health plans and organizations implementing in-house agencies.
The use of in-house agencies is nothing new. Amid the recession 10+ years ago, clients began reducing work from external agencies in an attempt to reduce costs. However, today, the number of in-house agencies has risen significantly. According to a recent study conducted by the Association of National Advertisers (ANA), 78% of ANA members reported having some form of an in-house agency, compared to just 58% in 2013 and 42% in 2008.* The reasons for moving work from external agencies to in-house agencies included: cost efficiencies, better knowledge of brands, speed and nimbleness, and institutional knowledge.
And while I completely agree with the rationale for bringing some services in-house, I do caution Medicare plans that may be considering moving work from an external agency to an in-house agency to be careful, as there are pitfalls you need to strongly consider.
In-house vs. external agency
In-house agencies typically suffer from tunnel vision in creative thinking
The attempt to take more ownership of a brand by moving creative services in-house can backfire. Think about it. The team working on the creative assignment will certainly have more connectivity to the beliefs and be more aware of what’s going on in the four walls of your company, but they may lack the ideology and creative thinking that is applicable to the world outside. Creative campaigns that are executed via an in-house agency run the risk of “tunnel vision” thinking, and that can be very dangerous to a brand.
Running an in-house agency can lead to greater expenses
Paying employee salaries, taxes and benefits can really add up over time. There are also expensive software tools that you need to factor into your operating expenses along with employee training. By working with an agency, you can negotiate a fee that works within your budget.
Agencies can leverage experiences from other industries
Regardless of the goal being to acquire more members or keep more of them, health plans are not unique in their challenges. We’ve leveraged experiences with our clients in industries such as consumer packaged goods, home services and financial institutions to build programs and advertising campaigns for our health plans. Whether it’s launching a new plan, expanding service areas or repositioning your brand in a competitive market, having a strategic team with deep and meaningful experience building business is essential.
Agencies can capitalize on existing relationships with media and production vendors
A qualified health care marketing agency will have strong and favorable affiliations with emerging technology and media companies. In successful agency-client relationships, these contacts are leveraged for your benefit. Successful health care agencies also have access to a range of proven suppliers, including database providers, call centers, printers and mail shops. These are crucial functions that play a vital role in the success of any health plan.
Are you considering switching agencies or working with an external agency for the first time? Here are some tips for finding the right health care marketing agency.
- Hire a health care marketing agency that speaks your language
Look, we get it. For those of us who work with Medicare plans, we live in a strange world. CMS restrictions on marketing communications and required disclaimers have us speaking our own language. We use terms such as AEP, OEP and SEP. The agency you hire needs to speak the same language as you. The learning curve for a potential new entry is just too steep and you can’t afford for them to learn on the job. It’s a waste of your resources.
- Look for a health care marketing agency with proven experience
With constant increases in enrollment forecasts and sometimes shrinking advertising budgets, you can’t afford to hire an agency that does not have a track record of delivering successful results. Partner with a health care marketing agency that has recent and relevant experience meeting similar objectives. Ask for case studies!
- Find the right “chemistry” fit
When it comes down to it, the client-agency relationship is all about people working with people. The chemistry has to be there. Take the time to get to know the potential agencies. Are they collaborative? Are they accountable? Are they forward-thinking? How do they handle and resolve potential client-agency issues? These topics should be explored beyond just a “paper” relationship. Meet them in person.
- Do your homework
References are great. But remember the prospective agency would not have included the contact as a reference if they didn’t believe the individual would speak highly of them. Look for third-party resources. Clutch is a leading B2B research, ratings and review company. Check them out here.
- Require full billing transparency
Yes, some agencies have a bad reputation for not being fully transparent with their billing. Some agencies include “hidden” upcharges. Be sure to check how the agency bills for outside services, as some agencies mark up these costs quite a bit. Be sure to request full billing transparency from your health care marketing agency. Find one that provides outside services at cost.
If you are considering a new agency, don’t miss the opportunity to work with a “strategic partner”
One of the biggest advantages GKV provides to our health care clients is a 360-degree view of the environment in which health plans operate. Working with a partner who has experience on the delivery side, including hospitals, long-term care providers and technology companies that support health care systems, can be a real advantage when developing creative and marketing strategies.
If you are looking for a new health care marketing agency, get started today. I can tell you from my experience that the selection process and creative ramp-up will take longer than expected. It always does.
*The Continued Rise of the In-House Agency (August 2018)