You see it on the television, you read it in the newspapers – the global economy is slowing. The IMF has cut GDP estimates for the world as a whole to 4.0%, highlights the threat of renewed recession in the US and EU, has curbed estimates on China slightly, and projects a sharp drop-off in India’s economic growth compared to last year. Other economies are projected to show sharply weaker growth as well. Huge public debts also threaten austerity in major economies. All in all, the global economy is in a very precarious position … but what does that mean for you, the manufacturers and distributors of life science research tools?
Overall, the global life sciences research market will likely contract, and we are already seeing supporting evidence of such. The proposed 2012 NIH budget is trimmed by a modest 0.6%. I expect European and Japanese life science R&D spending to be trimmed by a similar amount. While many developed economies are struggling with debt, investments in research don’t seem to be high-priority chopping block items. What about the massive $100bn+ pharmaceutical and biotech research and development budgets? Well, while one may reasonably postulate that people in developed economies are losing their health care along with their jobs and this would lead to falling revenues, that does not seem to be the case. In fact, the largest threat to pharma / biotech seems to be generics, but even then global sales growth is still projected to be positive, albeit diminished. That being the case, don’t expect private-sector R&D to grow, but it shouldn’t shrink either. Overall, we will likely see only a very modest contraction in overall life science R&D spending. That’s good news.
The bad news is that this cuts the “growth” out of the market, although this is worse news if you’re a large company or an established player in your market segment. These companies rely more on growth in the market in order to grow themselves (at least organically), and companies with a high market share or those that have seen their market share plateau are more likely to see a sales contraction from a contraction in global life science R&D funding. Smaller companies that have plateaued will need to assess their technology and competencies in order to develop plans for value-added innovation in current markets and / or expansion into new markets in order to sustain growth, or else they will simply contract with the market. Larger companies with more cash will likely use M&A to achieve growth. Look for them to acquire early-stage companies with very promising high-impact technologies as well as established small-to-mid size companies that have high-quality product lines that are complimentary to their own.
Contrary to general consumer behavior, we are unlikely to see a move to lower-cost products within the research tools market. Less research funding generally means less labs or smaller labs, not across-the-board cuts in funding to all labs. In other words, the dollars spent per researcher will likely be roughly the same, but the overall number of researchers will decrease, spreading the contractile pressure fairly evenly across all laboratory products instead of driving researchers to lower-cost products. Practically speaking, this means that manufacturers and distributors who sell products that compete on price will feel the squeeze just as bad, if not worse since many of these “generic” or “commodity” type manufacturers do not have the technology and R&D capability to expand into new markets. As these companies have thin margins and already focus on efficiency, thereby not leaving much more room to squeeze out additional efficiency, they will feel the pain of any contraction quite acutely if they haven’t been saving cash.
On the other hand, small and mid-size companies that rely more heavily on technology adoption for growth will likely still have strong performance, as companies will still want to put their research dollars into tools that make research faster, better, and easier. These companies don’t rely so much on market growth since they are, in effect, building sub-markets and carving out new space. While their effective “ceiling” may be decreased, this will likely affect them only minimally since they are still in the growth phase and have not come close to reaching their maximum potential. One exception to this could be those companies that manufacture high-value capital equipment that is most often purchased to upgrade from an older instrument and / or technology. Look for sales in these products to decline somewhat as organizations look to decrease their R&D overhead by decreasing funding to core facilities and putting off large, non-critical purchases. With few exceptions, however, scientists will continue to adopt new technologies.
Another way a contraction will affect the life science research tools market is by decreasing marketing ROI. With an overall decrease in spending, there will be more marketing dollars chasing fewer customers, so marketing ROI will likely decrease by a few percentage points, especially since new players in the market will likely continue to enter given its size and comparative stability, and also to seize opportunities created by new technologies. While sales forces can shrink to demand, the channels through which marketers need to reach customers do not shrink, and this puts a fairly strict limit on how much a marketing budget can contract without negatively affecting sales.
A contracting global economy certainly will not effect the research products markets as much as it will the consumer markets, and this is very good news for those in the space and for the future of biomedical research a a whole. Nevertheless, any slowing or contraction presents risks. By understanding the situation and the likelihood of future possibilities and preparing for what may lie ahead, life science companies can plan for and mitigate those risks to help ensure continued success.
A 2011 survey performed by BioBM found that when looking for a new laboratory product, 90% of life scientists will first turn to one of two places. Half of that 90% will first turn to colleagues for recommendations, and the other half will turn to search engines (and the search engine of choice for scientists is overwhelmingly Google). Ensuring that your products are held in high esteem by a large enough number of life scientists to influence the 45% that turn to colleagues first for product recommendations is a complex, difficult problem, as well as one that takes a significant amount of tiime and money to tackle. Being seen by those 45% that will turn to Google or other search engines, however, is much easier and cheaper. Consider this: an Enquiro / Eyetools eye-tracking study (Enquiro, “Enquiro Eye Tracking Report I: Google”, March 2005) found that 100% of people performing Google searches will see the top three search results. Not to understate the competitiveness of organic search, but if your search engine optimization efforts are sufficient to get you into the top three search results for the relevant terms, you can more or less guarantee yourself that your products will be seen by 45% of scientists who are looking for your kinds of products. That is huge.
Now while much of the life sciences is competitive enough that getting into the top three positions in a search term is not a trivial task, you can still make a significant difference in your web traffic (and subsequently your leads and sales) by, for example, going from the fourth page of a major search term to the second page. Various research has shown that 70-90% of searchers do not go past the first page, and 90-99% do not go past the third page. Also, the aforementioned Enquiro / Eyetools study found that the position on the page makes a huge difference as well. While 100% of study participants saw the first three results on a search page, only 10% saw the 10th result. Moving from 9th or 10th to even 5th or 6th can make a big difference.
So… What do you need to know to help prop up your search rankings? Instead of writing a book on the topic, we’ll just list some tips below. If you have any questions or would like some elaboration, feel free to contact us.
- The page title is very important to SEO. The meta description is important to the searcher, but is irrelevant to SEO. Using the wrong title HTML (meta_title= instead of title=) can significantly hurt your SEO.
- Content is king. Nothing will improve your SEO better than more content, especially if you don’t have a lot of content to begin with. What is “not a lot of content”? Under 100 pages is certainly little enough content that more content can yield an easily noticeable improvement. If you are looking for ways to increase content while staying relevant, look into content marketing methods, such as blogging.
- If you have content on external websites, try to bring it onto your site. For example, some companies have a primary website and then an online store at a different URL (either because of the restrictions of the e-commerce platform they are using, or just due to poor planning). Many companies have off-site blogs. These things should be brought onto your primary site so your SEO is not diluted across multiple sites.
- Links back to your site are also very important for SEO. Google also determines contextual relevance, so links back from more relevant sites are more important, as are links from more popular (read: high traffic) sites. Just as an example, we recently did a very fast back-link campaign where we deployed about a dozen relevant links via product news releases and the client saw an average 13 place jump in search rankings for relevant terms.
- Don’t try to fool Google. They know most of the tricks, and trying to trick them will likely either hurt your SEO or get your site completely de-listed. (see the Wikipedia article on “spamdexing” for a good list of what not to do)
- Site traffic is highly important and creates a bit of a chicken-or-egg problem. Traffic is a very important factor in determining search engine rankings, but in order to get a lot more traffic you need better search engine rankings. Honestly, it’s not as much of a conundrum as it sounds. The key is trying to maintain the upward spiral (better SEO → more hits → better SEO → more hits, etc…).
- Checking your search rankings manually is a pain. Seobook.com used to have a Rank Checker plugin for Firefox that allowed you to save up to 100 desired search terms and then to see if you are in the top 200 results on Google, Yahoo, and Bing and output the results as a csv file, which you can open in Excel. Unfortunately, last I checked it was no longer working. Until it’s up and running again, the rankchecker.net SEO tool should hold you over.
- Trial-and-error is okay. Play with your content and see what works.
Another strategy worth noting is to become the first result for an ancillary search term. Regarding ancillary results, allow me to give an example using a company that I’m familiar with. Next Advance manufactures a high-throughput bead-mill homogenizer for disruption and lysis of tissue and cells. There are a lot of companies that sell homogenizers, many of which are larger than Next Advance and have been around for a long time. This crowding makes it relatively difficult to get to the top of search results. For the search term “homogenizer”, Next Advance first shows up on the fourth page of the results, as result #34. However, they know that “homogenizer” is not the only thing their potential customers are searching for, so they also optimized for less competitive terms. If you search for “tissue homognizer” they are 5th. For “liver homogenization” they are first. By enacting SEO strategies that allow them to leverage these alternate terms, they can drive a lot of traffic from search without having to compete for the highly competitive terms.
SEO is a great marketing tactic, especially for small companies on a limited marketing budget. It’s a low-cost, high-ROI form of internet marketing that can put your life science company directly in the sights of your potential customers by being where they are looking: search engines. It’s not rare at all for SEO to be a company’s highest-ROI form of marketing, and given the massive amount of scientists that are turning to search engines for product information, that shouldn’t be a surprise. With a meager budget and some sustained effort, you can help your company drive web-derived leads and sales through SEO.
There is often a disconnect in communication and reporting among the marketing and sales / business development teams in life science companies that makes the calculation of ROI less relevant, or just flat out less correct, than it should be. Each team or division generally focuses largely on what they can control and what their end-goals are. Usually for life sciences marketing teams the metric of choice is leads, and for sales teams the metrics of choice are sales and conversion rate. Considered separately, these metrics do not form a holistic approach that considers the interests of the company.
Primarily at odds when marketing and sales metrics are considered and reported separately is lead quality. As most marketers and practically all salespeople know, poorly designed or poorly targeted marketing communications can often generate large amounts of poor-quality leads. The large volume of leads will look good for marketing, but ultimately will be bad for sales, as few of the leads will convert. Because of this, an overarching reporting structure that considers both leads and sales should be implemented which tracks lead capture and development over the complete cycle. With such an overarching reporting structure, a better understanding of ROI can be gained.
Simply reporting a more holistic measure of ROI is not sufficient, however, as ultimately companies are not interested in reports, but in revenues. Certainly there are many problems that can be identified and subsequently fixed through improved reporting, however there need to be methods of direct contact, information flow, and feedback between marketing and sales teams.
Some products may not require sales teams, and for these products marketing will directly lead to sales without the intermediate step of lead generation. While in these situations it is easy for ROI to be measured, for many products and virtually all services it is not so simple. In these situations marketing and sales must collaborate, and data from one function must be related to data from the other. Only with more holistic approaches can a meaningful measure of ROI be grasped and meaningful strategies developed to increase it.
Technology provides scientific salesmen with great tools. Perhaps the best example of this in recent history, at least in terms of visibility and adoption, are salesmen’s use of tablet devices to deliver sales presentations, product information, and other marketing content to prospective customers. Advances in technology, however, are often underutilized, especially in smaller life science companies. While general-purpose adoption is often good, these companies often fail to realize the full potential of such technology.
Too frequently, small life science companies (and sometimes larger ones as well) adopt new sales technologies by retrofitting the last generation of content for it without ever considering what benefits the new technology offers that could be leveraged to actually improve content delivery. In doing so, only a portion of the total potential benefit is realized. Let’s go back to the example of tablets. Sales presentations used to often require binders full of product information, salespeople would have to carry around brochures and other product information to leave with potential customers, and all of this created a lot of bulk that was heavy to carry around and could be clumsy to dig through on the spot. Companies also incurred the costs of printing, storing, and supplying such materials to their sales reps. Furthermore, customers could easily misplace a few pieces of paper and these materials were not readily shared and disseminated with labmates or other colleagues. Tablet computers were seen a way to solve these problems, and many companies and independent reps have adopted this technology. However, few examined how they could further improve their content delivery beyond alleviating these obvious issues. They simply retrofitted their previous content for electronic delivery via tablet (through pdf, powerpoints, word documents, existing web content, etc).
Now think about what could be possible if these companies thought about creating content that took advantage of the improvements in technology. Think about all the ways that various content could interact. Think about how content could potentially be created that is dynamic and allows salespeople to respond to expressed customer needs with specialized information that is more pertinent to those specific needs (the “landing pages” of next-gen content delivery). Think about how content delivery could become both more fluid and functional. These kinds of questions represent some of the forward thinking that needs to be done in order to truly leverage advances in technology to improve life science sales.
Technology is constantly changing, evolving, and improving. In order to maintain a truly up-to-date and highly effective sales force, life science tools companies need to not only adopt these technologies, but escape the paradigms created by previous technologies in order to create new and better ways to perform and support sales.
Scientists are very analytical people, in general. This is not surprising and is an easy assumption to make, but many novice life science marketers over-interpret this analytical nature. They presume it to mean that life science marketing should be relatively dry and that it should only provide information. While I admit that life scientists are exceptionally good at sniffing out marketing, and greatly prefer information to gimmicks or catch phrases, that’s not to say that your life science marketing communications need to be boring. What they should do is have an understanding of what is important to your audience and the psychology of your audience. Regardless of the market segment that you are targeting, one thing that you can be reasonably certain of when marketing to any type of scientists is that they will be highly curious and inquisitive, and this is something that you can leverage to your advantage.
The challenge, then is piquing that inquisitiveness. How can you use your audience’s natural scientific curiosity to your advantage? Is your technology interesting or complex? Perhaps you can offer to explain it to them and / or show them how it works. Are you claiming that your company / product / service / technology performs better than that of competitors? Perhaps you can show them why. If your market is extremely niche, or there are a limited number of ways to use a product that you are marketing, you can often draw an even closer link to the underlying science and / or methods, and this close connection with the science can be a powerful draw on scientists desire to learn.
Regardless of the specific technique used, so long as the message stays relevant to the interests of your scientific audience, you can captivate your scientific audience while providing them with information that shows off the benefits of your product or service. The curious scientist will then be much more receptive to further marketing and / or information, is more likely to act, and can be more easily engaged.
There are many reasons why any life science tools company should be using search engine marketing (SEM), yet many do not. Scientists are frequently on search engines to look for publications, protocols, product info, scientific knowledge, and more. In a field so highly dependent on information, and on such a wide variety of information from so many different sources, you can bet that scientists are on search engines a lot. Search engine marketing can not only provide a large audience to market to, but since you select which search terms you want your ads to appear on, it can provide a highly targeted audience as well. Best of all, and my favorite thing about any cost-per-click (CPC) based marketing – you only pay for results.
Please note that the following advice pertains mostly to major search engines (such as Google, Yahoo, and Bing), as they will have the full set of features that these tips assume the search engine to have. There are certainly other search engine tools that have reasonably good features and very competitive cost-per-click rates, but although some of the advice will likely be applicable to smaller and / or more focused platforms as well, we will leave those for a separate discussion.
Understand how SEM works
If you and your life science company are new to search engine marketing, you’ll want to familiarize yourself with the basics. It’s easy to have a poor ROI if you don’t know what you’re doing. Each search engine will likely have a wealth of literature for you to read and watch, likely enough for you to gain quite a good proficiency with each system if you bother to take the time. For example, you could spend weeks reading all the information that the Google AdWords help center provides. Perhaps one of the most important lessons to learn before you initiate an SEM campaign is how the bidding process works and how CPC is determined. Again using Google AdWords as an example, they have a helpful intro video explaining the process (albeit a bit simplified from how it actually works).
Use the tools that each SEM platform provides
Google AdWords, for example, will provide you with all sorts of lovely info. It will give an index of competition for any given keywords, provide estimates on how many searches are performed for any given term, both globally and within a given region, and estimate the cost-per-click that you would need to bid. It will even provide suggestions on additional search terms, and give historical search estimates month-by-month. This information can help you tremendously in determining what search terms are best to target.
Be an opportunist
In part because life science tools companies do so little search engine marketing compared to the breadth of terms used in the field (and perhaps in part due to many life science marketers general inexperience with SEM), there are a lot of opportunities out there that can drive down your cost-per-click, drive up your ROI, and result in more sales. To start doing this, think like a scientist. What could they be searching for that may not be a product, but may be related to your product. For example, if you are selling DNA extraction kits, perhaps you could target not only users who are searching for DNA extraction kits, but DNA extraction protocols, phenol / chloroform extraction, DNA purification, etc. There are many terms that would indicate that someone is performing DNA extraction. Alternative methods, related upstream or downstream procedures, and even names of competitors products are all good search terms to consider. Find those terms with a low CPC and take advantage of them.
Monitor, update, repeat
Major search engines will try to maximize their income by displaying the ads that make them the most money. This, simply stated, is based on cost per click multiplied by the click-through rate (CTR). Click-through-rate is the rate at which your ad is clicked on by searchers for any given term. If your ad gets clicked on a lot, the search engine gets more money, and you get more visitors. Everyone goes home happy. Search engines will reward ads that have a higher CTR with lower CPC, higher ad placement, or both. An eye-tracking study found that the top-placed ad to the right of Google search results is viewed five times as frequently as the ad that is fifth on the list, so ad placement is an important thing that should not be undervalued. By monitoring your results and tweaking our ads as necessary, you can drive up your CTR, lower your CPC, and improve your ad placement.
One last thing deserves mention. We are often asked by life science companies how much is the correct amount for them to dedicate to search engine marketing. This question doesn’t have a numeric answer. The answer is: as much as you can while getting the desired ROI (and without breaking your budget). Note that this will not be an “infinite” amount of money; you will be limited by the number of searchers. However, so long as you are achieving the desired return-on-investment from your SEM campaign, you should continue to reinvest in it to continue to drive sales growth.
Search engine marketing is a valuable, highly scalable, and readily accessible tool that can generate lots of traffic for your site and, more importantly, lots of sales for your company. Properly utilized with a well-designed site including the appropriate landing pages, your life science tools company can realize a high ROI from your SEM investment and grow both your sales and your company.