Marketing Opportunities and Performance Expectations: The Pro-Forma Tool


Posted by Iyiola Obayomi from Ogilvy CommonHealth Worldwide — North America on June 26, 2018


The second of a four-part series, exploring foundational questions that marketers should (and do) ask when setting performance expectations and details on the tools available to marketers when addressing these important questions.



We’ve now identified the foundational questions marketers ask (or should ask) to elicit the right data-backed evidence to help inform decision making at different stages of a typical strategy formulation and communications planning exercise. We introduced three tools (including those we employ here at OCHWW) and touched briefly on the attributes of each tool. Here, we’ll begin delving more deeply into each tool, highlighting how each works, with client examples, and share the impact experienced by each client.


While the marketing consultancies and agencies that have these tools (and capabilities) may refer to them with different names, the important point to bear in mind is that these tools exist and a capable partner should be able to address them.  Let’s look at these tools in detail, highlighting real-world applications, outcomes, and considerations you should be familiar with, starting with the Pro-Forma tool.


Case and context for the Pro-Forma tool


The Pro-Forma tool addresses foundational opportunities and helps to identify expectations and questions at the earliest stages of your strategy process. Here, we’ll illustrate the application of this tool with an assignment that typifies the significant investment and revenue riding on making a strategic decision.


The client is a healthcare brand with less than four years to loss of exclusivity (LOE) and is in the process of evaluating optimal strategies to maximize brand impact for the remaining years. The brand is one of the few branded offerings in a category that has been significantly impacted by generic penetration.


The key questions being addressed:


• Should we ramp down marketing support for the brand and take whatever revenues we can realize over the next few years? Or should we invest in a new marketing push?

• If we decide to support the brand with marketing efforts, should this be a broad market push (cross-branded and unbranded) or should we focus on the shrinking branded market?

• What can we expect from a marketing push? Where will the incremental volume come from? And how much should we be willing to spend to optimize our marketing investment?


The Pro-Forma tool provides one of the most efficient ways to address these types of market opportunities, strategy evaluations, and investment-levels decisions. Other approaches, such as survey-based simulation (when elements of the strategy are put into a survey and used as input for a simulation model, or in-market test, and then piloted in a geographic subset for a brief period in an attempt to prove the idea out), are more expensive and require more time. The Pro-Forma tool is sometimes used as the first step for addressing the strategic questions, and then other, more time-intensive and expensive tools are deployed subsequently to further validate the model’s recommendations.


To put it simply, the Pro-Forma tool is a modelling and simulation tool that identifies market opportunity for broader marketing investment. It simulates potential opportunities and sources of business and provides one of the lowest-cost approaches to understanding opportunities in the marketplace.


The Pro-Forma tool


The tool comprises three key parts, with each part adequately customized to address the brand’s questions:


1. Inputs: This ensures the model is built on a strong foundation of factual realities within the market. It therefore includes key inputs such as current and forecasted incidence rates, diagnosis rates, and treatment in the category, customer attributes and segments, the treatment and flow patterns, current brand awareness and share levels, economic attributes of the brands, and other similar factual market data.

2. Impact levers: This captures the performance levers a brand is able to influence or the key environmental drivers that can influence future outcomes. In other words, these are the “what if?” data points. For this particular brand, we captured the audience that could be reached, the impact of brand communications, responses to brand communications, changes in patient or prescriber behaviors, changes in investment levels, and changes in the competitive landscape. We used a combination of benchmarks, performance analogs, and historical brand performance metrics to “seed” the impact levers with reasonable and conservative estimates.

3. Outcomes: This reflects the areas of interest in business outcomes and could include one or more of the following: market share, sales, number of patients, revenue, ROI. These are the simulated outcomes expected, based on the range of values of the impact levers. For this brand, the output covered market share, sales, number of patients, revenue, ROI. The Pro-Forma model detailed the range of values for these outcomes, informing us of the most to least likely ranges of expectations.


A key to success with exercises such as these involves collaboration with the brand team and other data and analytics stakeholders to collate and capture the required input and performance lever entries. This requires clear articulation of the data needed—“must haves” and “nice to haves”—access to the right internal teams who have these datasets, research studies and outputs, and access to our benchmarks, analogues, and historical performance ranges. We worked closely with internal analytics teams and they were invaluable partners in stress-testing the model and providing helpful perspective and internal experience.


Overall, the model showed that the most efficient strategy was to focus on the branded category. While the broad strategy did show incremental gains, ROI and investment efficiency were highest when the brand focused and competed within the branded category. This direction was not only the winning quantitative strategy, the rationales around such outcomes were intuitive and easy to articulate verbally. Besides situations wherein a particular brand is clearly the most appropriate for a patient, HCPs tend to decide between generic and branded, and then between the branded alternatives.


The model also identified the need to target the large base of HCPs who were not as productive when compared to the highest Rx writers, but when targeted with highly efficient, non-personal promotional (NPP) tactics, the small incremental productivity from the large base of HCPs using the NPP tactics became a vital part of unlocking the last-stage opportunity.


The superiority of the branded strategy


The focused strategy was adopted and formed the basis for the communications plan for the last few years. The brand did increase its raw market share toward the end of its life cycle and attribution modelling attributed part of the lift to the focused strategy.


The Pro-Forma tool is a very helpful, efficient approach to setting quantitative strategic goals, deciding between broad strategic alternatives, estimating allowable marketing investments, identifying sources of business volume, or setting performance expectations for subsequent validation studies. In our next post for this series, we will explore how the Impact Estimator Tool can be used as a useful comparative program assessment tool during the evaluation stage.