Why Digital Marketing Has Become the Health-Care Industry's Rx for Revenue

Hospitals Take Business Where the Patients Are -- Online and on Mobile Devices

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Boston Children's Hospital's Facebook page
Boston Children's Hospital's Facebook page

Could digital marketing help cure the health-care industry?

Before the recession, nonprofit hospitals were posting revenue growth of 7% or more, but that slid to 3.9% last year, the smallest increase during the 23 years Moody's Investors Service has collected the data. Hospitals brought in an average of $11,299 in net revenue per adjusted patient admission in 2012, up 7.6% from $10,497 the previous year, according to the American Hospital Association. But admissions are falling as higher insurance rates prompt patients to seek more affordable care outside of hospitals and crimp the demand for elective procedures.

That's left hospitals, clinicals and medical centers -- which Kantar Media said spent about $1.8 billion on U.S. measured media last year -- scrambling for ways to attract revenue-generating patients while also controlling spending.

Many are turning to search, mobile and social for cost-effective marketing that reaches the growing number of consumers who look online for health-care information. Paired with advice from referring physicians, the internet is helping patients make more informed hospital choices. "The consumer-to-patient journey is largely a digital journey at their moment of need," said John Weston, CMO at Mayo Clinic. "If I were diagnosed with something tomorrow, one of the first things I would do is go online."

Search is key
Marketers used to cast a wide net through TV, radio, print and out-of-home ads to build brand awareness, but search-engine marketing is becoming a more significant part of plans as hospitals take a more-targeted approach. TV and newspapers still reap the largest hospital ad budgets because of their cost, but search is at the forefront of many campaigns.

Health-care chief marketing officers say digital's measurability helps them defend their budgets. "Return on investment is on the top of everybody's agenda," said Paul Matsen, CMO of Cleveland Clinic, which uses an aggressive digital strategy built around search that includes banners, patient testimonials, health guides and service-line-specific ads. He says about 80% of patients who are diagnosed with an illness go on the web to find information about their condition. The clinic works with Boathouse, based in Boston, for its digital creative and the Cleveland-based Adcom Group handles its media buys.

Health-care marketers like Mayo Clinic are building responsive sites that emphasize the mobile experience as consumers look for quick and easy access to wellness advice. Its pregnancy app, for example, is designed to be a companion for mothers from childbirth through their babies' first few months. And the clinic's patient app allows people to book appointments and access their health information.

Telemedicine, in which patients receive treatment via video calls, also has a growing presence in the industry (see story below). Smartphones with advanced video capabilities, like high-definition cameras, make it increasingly possible for patients to connect with quality doctors outside of their region and receive diagnoses. Telemedicine also cuts costs for hospitals and patients, which is why more health-care companies are offering this type of support.

Perhaps more than in any other field, the power of the testimonial is key in health care, as patients and families researching diagnoses often turn to patients with similar experiences. Social media gives hospitals and clinics the chance to share patient stories and connect consumers. "Patients really want an outlet for telling their stories and social is such beautiful way for people to do that," said Margaret Coughlin, senior VP-chief marketing and communications officer for Boston Children's Hospital, which has a strong presence on Facebook.

Boston Children's Hospital's annual marketing budget has been flat at about $5 million for the past few years, said Ms. Coughlin. But its net patient services revenue grew from $1 billion in 2011 to $1.4 billion in 2012, according to annual reports. Ms. Coughlin said the hospital's integrated marketing approach, which includes TV, print, digital, earned media, social and other types of direct marketing, contributed to the growth.

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