Advertising Budgets Down 20%
Hospital marketing budgets in the last few years haven't budged much, increasing less than 2 percent from 1995 to 1996 to an average of $467,400, according to the most recent 1996 Hospital Marketers' Survey released by Opinion Research Corp. Int'l (Evanston, Ill.). Although marketing expenditures for 1997 will not be released until the beginning of 1998, recent spending trends are showing that more dollars are being allocated to community-based campaigns, while traditional ad spending is dwindling. In 1996 the average advertising budget dipped 20 percent to $195,100 from $243,100 in 1995, according to the survey of 200 hospitals nationwide.
This telling disparity between marketing and advertising budgets reflects a "benchmarking fever" by hospital systems that are increasingly consolidating and needing to carve out a community identity, according to Steven Steiber, PhD., senior VP at ORC.
Hospitals in saturated markets like Florida and Texas are looking to community outreach programs to win managed care contracts and market share, a trend that is impacting hospital marketing on a national level.
'United Way' Approach
For Memorial Healthcare's nine-hospital system in Houston, $500,000 was spent in 1997 on conventional media buys while $1.5 million was spent on marketing campaigns (with a lion's share of the marketing budget committed to community programs that promote the hospital). In addition, Memorial commits 10 percent of its margins ($2.5 million) to educational community projects that do not promote the hospital but educate the community on key healthcare issues. (The state requires not-for-profits like Memorial to invest 5 percent of its margins to the community). "We take a 'United Way' approach to marketing that involves school-based programs, sheltering arms and preventive care. We are known for having a very strong not-for-profit stance," said Don Wagner, Memorial's director of corporate communications.
Memorial's ad budget, which has remained flat for the last two years, is used to promote its five service lines: cancer, pediatrics, orthopedics, cardiovascular and rehabilitative care, primarily with broadcast ads (60 percent).
The rest of its media mix is spread fairly even among radio (15 percent), outdoor (15 percent) and newspaper (10 percent).
This media strategy strongly contrasts with average hospital advertising trends, according to the survey. The average hospital reported that:
- 43 percent of the ad budget was spent on newspaper and magazines (down a hair from last year at 46 percent),
- 14 percent on radio;
- 12 percent on direct mail;
- 11 percent on TV; and
- 20 percent on yellow pages, bus/billboards and other media But for a hospital system of Memorial's size, TV is the favored medium, representing two-and-one-half times that of a typical facility, the survey points out.
In addition, Memorial exploits the high visibility of TV because of the hotbed of hospital competition in Texas. In addition to the area's three major not-for-profits, the for-profit sector is formidable with Columbia's 19 sites and Tenet's six. "We are heavy on TV because our [not-for-profit] competition uses outdoor and the for-profits take out a lot of full-page ads in the newspaper," Wagner said.
One-One Strategy Replaces Mass Media Focus
For Florida Hospital (FH) in Orlando, with five locations throughout Central Florida and a sixth one opening in November, its marketing efforts in 1996 exceeded its advertising campaigns at $800,000 by a two-to-one ratio. "In the '80s, we got away from a community focus and relied on mass media [for image building]. Now we're coming full circle and stressing one-to-one communications with community-based projects," said Melissa Keller, Florida Hospital's assistant director of marketing.
Now, only a quarter of Florida's advertising budget is spent on corporate positioning campaigns with the remainder earmarked for promoting its 25 service lines that include Diabetes, cancer and cardiology.
This marketing strategy has also impacted Florida's media mix, which in 1996 primarily relied on television and billboards for mass branding exposure. Now, an even mix of print, billboards and television is being used because print generates better consumer response to hospital services, according to Keller.
More With Less
Much like the national average, Florida's marketing and advertising budgets have not fluctuated much from last year, in spite of the fact that cultivating "one-to-one" marketing relationships can be costlier to develop.
This is one of the more pressing challenges for hospital marketers: creating customized (often more expensive) marketing programs with a yearly budget that has not increased commensurately.
To do more with less requires coalition-building and partnering with other healthcare organizations and communicating "synergistically" with quality of care messages. "We have to emphasize in every message with consumers, consistent messages of quality and how we've been a part of the community for 90 years," says Keller. Florida has started to make its messages more uniform across its continuum of care with similar graphics throughout and consumer endorsements. (ORC, 847-492-2500; FH, 407/897-1917; MHS, 713/776-5115)