How the smart digital health marketers are thinking about patient acquisition

Paid marketing used to be a lot less expensive. Many of the previous generation of digital health companies could run a fairly slick operation using venture capital dollars to fuel ad campaigns on social media sites, all with a goal of recruiting providers and patients. That could lead to some dizzying top-line revenue numbers within a matter of a few years, and sometimes even months. Depending on the business model, the goal for many of these companies was to bring down the cost over time - and many did so successfully.

That has all changed - and I rarely see direct-to-consumer health companies rely so heavily on paid marketing without investing in other channels. Investors I speak to regularly are also increasingly skeptical when they dig into the financials, and they see that a company has built a user base by relying heavily on targeted ads via Facebook and other platforms. It can be an inefficient way to acquire customers, and it only makes sense if the patient tends to stick around through multiple episodes of care — or if the intervention is high-priced enough to warrant it. 

It’s not just that companies are bidding on limited ad inventory. It’s that privacy-first policies, like third-party cookie depreciation, as well as the Apple iOS software update in 2020, have decimated attribution fidelity, notes Georgina McMillan, a consumer health investor at Headline. “The result is that customer acquisition costs go up because attribution windows are shorter, cross-device tracking is harder, and retargeting is weaker,” she explained, when we spoke on the topic last week. In other words, it’s really hard to know these days if a paid ad has reached its target audience, and therefore been successful. This has created a lot of challenges for health apps, and more broadly in the consumer-tech space.

So at a time when there’s more competition than ever before to acquire patients, how are companies successfully doing it? Making things more complex, AI has made personalized emails a commodity. Every possible sales target within an organization finds themselves filtering out a massive amount of unwanted emails.

I’m fascinated by these questions, so I've been asking companies in my network for their playbooks. And I figured I’d share a few! Note: This post is intended to provide tactical advice for companies that are marketing to consumers directly. That includes both D2C and B2B2C. As long as there’s a “C” somewhere — it’s not purely “B2B” — this post will offer wisdom. 

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