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Why is Healthcare Shunning Programmatic Advertising?

Stephen Heitz, Chief Innovation Officer

Your knee is killing you.

You do a little digging online and decide to see an orthopedic doctor. While sitting in the waiting room, you open your mobile browser to check the news and head to one of your favorite websites. There, you see an ad for a nearby imaging facility promoting X-rays and other radiology services.

That’s strange.

Is someone stalking you? How did they know you were at an orthopedic office and were a likely candidate for an X-ray? Do they know whether or not the clinic has its own X-ray facility, or if you have a choice of imaging providers? Are you being followed?

In a way, you are. This is the advantage of programmatic advertising—a way to deliver a unique message to a specific person or audience based on data.

The person sitting in the orthopedic office spent time online researching knee pain and might even have chosen the doctor based on location. This online activity created a digital “footprint” that allowed a smart marketer to find you. And through a technique called geofencing, you were found at the right time (visiting an orthopedic doctor’s office) and the right place (near the imaging center).

This is marketing gold. And it’s the reason programmatic digital display advertising is exploding. In 2017, it accounted for 78% of all digital display ads, with spending exceeding $31.8 billion.

How excited is the healthcare industry about programmatic media advertising? Not so much.

HIPAA anxiety

In 2016, healthcare and pharma accounted for only 2.8% of all digital ad spending. And of industries choosing the hyper-targeted programmatic advertising tactic, healthcare and pharma companies accounted for only 1.7% of the pie.

Do healthcare professionals know something other industries don’t? Not really.

Much of healthcare’s hesitancy about programmatic advertising can be traced to the Health Insurance Portability and Accountability Act of 1996, affectionately known as HIPAA. Overseen by the U.S. Department of Health and Human Services, HIPAA set forth rules and regulations about how patient medical records and data can be used.

Since it went into effect, healthcare providers and institutions have been fearful of violating privacy rules, especially those relating to marketing. A single act of noncompliance can result in fines of up to $50,000. It’s no wonder that healthcare institutions have approached data-driven marketing with apprehension.

Opportunity knocks 

With so many healthcare marketing organizations not taking advantage of programmatic advertising, an open-field opportunity now exists for pacesetter institutions willing to jump in. With a few careful measures and oversight, programmatic advertising can provide a significant competitive advantage in reaching your target audiences.

It’s important that sectors of the healthcare industry approach programmatic advertising differently, because they have varying degrees of concern over consumer medical records.

For example, the previously mentioned X-ray company can pretty much market its services with impunity as long as it doesn’t use customer data. While it’s certainly a little creepy to have seen the imaging company’s ad while sitting in the orthopedic doctor’s office, there’s nothing inherently wrong or illegal about it. However, it does raise a fascinating question: Is there such a thing as too much targeting?

Good question. We certainly do have the ability to target individuals with laser-like accuracy. But just because we can do it doesn’t mean we should. And that’s particularly true in healthcare. We advise our clients to carefully consider the ramifications of appearing too invasive, which could also cause problems.

Consider this scenario. You suffer an episode of diabetic ketoacidosis and are hospitalized for a few days. Thankfully, you have a full recovery. The hospital now has sensitive data about you, including the knowledge that you suffer from diabetes. It also probably knows what kind of insulin you use. With few exceptions and without your permission, HIPAA forbids the hospital from marketing to you because it knows you have diabetes. Similarly, your health insurance company now knows you have diabetes, so they can’t try to promote a new blood glucose monitor to you.

Here’s where it gets tricky. What if the hospital’s marketing team—who have no information about your stay in the facility—tracked your online behavior and found that you were searching for information about diabetes, glucose monitors or wound care. With that data, the hospital can target you using programmatic advertising. Your health plan could do the same. And when you see the message, you’ll either be happy . . . or jump to the false conclusion that your private medical records have been breached. This could cause harm to your hospital’s reputation and result in an investigation.

Bells and whistles 

This coincidental appearance of impropriety has kept some healthcare marketers and their organizations on the programmatic sideline. But, again, programmatic advertising offers choices, and marketers don’t have to take advantage of all its bells and whistles. You can choose to target a bit more broadly. You can even decide when to reach people. For example, rather than hitting the person in the orthopedic waiting room, you can wait a day or two.

Marketers can also select their programmatic methodology as a way to minimize risk. The most popular form of programmatic advertising is via automated auction or real-time bidding, in which an open exchange identifies a category, but not the exact sites where the advertising will appear. A narrower form is direct programmatic, a technique that allows the selection of specific websites where an ad can appear. Programmatic can also be tuned to “blackball” a website so it will never host a specific ad.

You can call this the art of programmatic advertising, and that’s the real key to making it successful. Fine tuning available methods and tactics is what will keep the HIPAA police from knocking on your door.

Need help?

Not sure where to start? No problem. LAVIDGE experts in programmatic advertising for healthcare can point the way.

To learn more, give us a call at 480.998.2600 or send email to [email protected].

Top 5 Reasons You Should Be Using Programmatic Advertising 

Has your company adopted programmatic advertising? If not, here are five trends worth considering.

  1. Programmatic advertising is highly targeted, delivering specific messages to your target markets in real-time.

  2. There’s very little waste when using programmatic advertising. It is extremely efficient.

  3. Programmatic advertising is mostly automated, which controls labor and human error.

  4. Programmatic advertising can help you discover new and non-traditional sites where your buyers dwell.

  5. It’s here to stay. Programmatic digital display advertising accounted for 78% of all digital display spending in 2017.

    ( and eMarketer)

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