RJ (PMN): Hi this is RJ Lewis, your host of the pharma marketing network podcast and I’m excited today to have with me a couple of executives from Klick Health to talk about CCPA. We have Holly Henry on the phone who is the chief medical officer of klick, and we also have Kamran Shah who is the EVP of technology and media. Welcome to the podcast!
Kamran (KH): Hey R.J. How’s it going?
Holly (KH): Hi RJ!
Holly (KH): So, I think we need to start thinking about it almost yesterday. We need to start thinking about how we need to be compliant when it comes to CCPA and how we need to ensure that we understand the changes in the technology, in particular in cookies as we’re beginning to think about our brands, not just from a technology perspective but from even beginning to build the brands.
Kamran (KH): Yea thanks for having us on RJ. From when we should worry about it, I think there’s two things that have occurred. One is regulatory legislation with CCPA but also companies such as Apple and Google have also gone in and made privacy become more relevant and important with how they are treating cookies. So both of those have been in market for almost a year and a half so the reality is, the impact is already being seen in how media is targeted and how analytics is done and now because you have a combination of regulation and technology changes kind of merging together, it is important to really make sure we are set up correctly to succeed in the market.
RJ (PMN): Yea, and with an election you kind of have a perfect storm there. Let’s take a step back for just a second and make sure the audience really understands what CCPA is. Can you just give a high-level overview of CCPA, and more specifically the intent of the law?
Holly (KH): Sure, so CCPA is the California Consumer Privacy Act and ultimately the intent is quite simple. It’s really to ensure that the customers have the rights to their own data. This really came about because of the fact that customers are concerned about their data.
Kamran (KH): Right, and when you look at CCPA, the things it really gets into is, what data are you collecting about me, how open are you about letting you know what data you are collecting, and you also have to give me the ability to get that data from you and also I should be able to ask you to remove it. Now most pharmaceutical companies that are global in nature will already encounter this from a European compliance standpoint with the GDPR regulation that is more geared toward the US European union. Really what CCPA does is now extend that specifically in California. So, this isn’t really something that would technically be super new to pharmaceutical companies that are global. However, it does mean a lot of practices that were allowed in the United States need to be re-excited.
RJ (PMN): Why does this impact health and pharma more than other industries like automotive, or beauty products etc.
Kamran (KH): That’s a really good question, and I think the reason why there’s a larger impact to pharmaceutical brands is that you have privacy regulation such as CCPA plus technology changes with cookies coming together. For example, if you look at CCPA, which is California based on pending legislation in New York, just those two states would cover 20% of healthcare professionals and we had a POV we released mid last year talking about this. In addition, we look at pharmaceutical brands, Klick estimates about 40% to 50% of site traffic is actually on Safari and HCP use IOS a lot more than they do android. Since Apple went down the path of blocking third party cookies, a lot of marketing and ad tech is actually based off of that infrastructure. That’s why there’s such a heavier impact of both the technical changes and the regulatory changes on this industry specifically.
Holly (KH): I think in addition from a technology perspective and who we’re talking about, I think this has such an impact on healthcare, because when we think about the type of customer and the patients and the healthcare providers that are utilizing and digesting this information and need this information, the type of patient and healthcare provider, it’s more important to insure that we have appropriate communication with them. We’re not talking about shampoo, we’re not talking about a car, we’re talking about the health of the patient. So, with that perspective it’s even more critical.
Kamran (KH): And RJ, the thing you’ll also see is the NAI international advertising initiative is reacting to this as well so new guidelines for the NIA are putting more restrictions on things like retargeting ads based on specific conditions. Ad tech vendors are turning off the ability retarget certain things like depression because they feel like that is sensitive enough where people don’t want to be followed around.
RJ (PMN): Is this more of an impact to the pharmaceutical marketer from a marketing proactive outreach standpoint or is this also impacting things like their web analytics and the ability to measure who’s coming to their websites?
Holly (KH): I think it’s impacting both. From the marketer perspective, what this does is it requires us to think more about the patient and the patient journey and understand the patient and the insights that we understand what their needs are and what they are looking for when they’re looking for information on a particular brand or their disease. What that is going to require of us as marketers to think more about the content that we’re creating and the content that we’re providing for them and the content is going to need to be richer and more appropriately matched with that patient journey.
Kamran (KH): Yea and when you look at marketer vs analytics usually there is a loop, when Klick looks at it a little bit differently that it isn’t a one-time marketing campaign, it really lives for the lifetime of a brand and when you have an ad that you’re targeting or trying to reach a certain audience, how do you put that out? Well anything that uses third party cookies is more restricted now. When somebody comes to your site how do you know where they came from and how do you know if somebody came once or multiple times. So, things like unique visitor accounts are now impacted by cookie lifetime changes. Being able to do multi touch attribution is more limited now that their third-party cookies are being blocked. That then impacts my optimization of my marketing campaign, so it really does impact both of those areas.
Holly (KH): Just to add on to that Kamran, thinking about how we look at from a user experience when we’re developing a website for a particular brand or a franchise. We need to think about from a unique visitor perspective if a particular client has two products that would be in the GI space, do we create two separate sites, or one site that has both of the brands on there because we need to think about when that particular customer comes to that particular site, is it going to be one or two unique visitors that they’ll be seen as. Those are the kinds of things we need to think about when we’re developing those.
RJ (PMN): Interesting, Kamran can you talk a little bit more about the first party vs the third party and where the greatest impact is happening. It sounds like it’s happening in both areas.
Kamran (KH): Let me first decipher what a first party cookie is and what a third-party cookie is. First party cookie let’s say you go to your bank’s site, you enter your username and password and the next time you go back in, it shows your username, so you don’t have to reenter it. That is generally what you think of a first party cookie. Third party cookies traditionally were used for retargeting ads and you can think of that as something where I’m on amazon, I search for something and now I’m on CNN and I see an ad for that product that I was trying to explore. A lot of those things are based off of third-party cookies. The change that’s occurring is the third-party cookies are becoming more restricted and blocked. With the release of ITP in 2018, the first version the public released, kind of what Apple did, they basically blocked third party cookies by default and now Google will start making third party cookies easier to block. So, a lot of the things that relied on third party cookies are multi touch attribution, AB testing on your site, retargeting ads have to be re-examined. First party cookies are where web analytics generally live. One of the things that marketers use a lot is how many unique people are coming to my site, because that is a measure of reach. Well traditionally, if I visit a website on day one and I came back on day 15, over that month that was one unique visitor. What Safari has done, as said, hey you know what? First party cookies can only live for seven days, so now that metric will actually show two, so we have to reexamine our baseline. To Holly’s point, if we really want to understand a patient’s journey and their experience with us, what do we do as a marketer to increase the frequency of interaction and engagement with our consumers. If I can get them to come more often, then I can get a better picture of who they are and give them more relevant content.
RJ (PMN): In a lot of ways, this has gotten much more challenging for the marketer in terms of both reach of a target audience as well as attribution. As long as I’ve been in this business marketers have kind of been obsessed over this idea of attribution, understanding which touches are working, where the shift is occurring in the funnel through any kind of a sales process to understand when somebody goes from stage to stage, what was the mechanism that created that impact. The idea of this closed loop marketing, fully understanding the spending of every dollar. It sounds like that just got a lot harder.
Kamran (KH): I think in some ways it got harder, and in some ways, technology is at a point where we can do things we couldn’t in the past. I’ll give you a couple of examples of that. What’s gotten harder is what I would call, fingerprinting, and that is being able to tie everything back to a specific person. When you think of healthcare, from a HIPAA standpoint like tying everything back just like an individual does, you know start drawing some boundaries. So what Apple, Google, and most technology vendors were saying is, we really want to get away from fingerprinting. So, it’s about a person but more about behavioral profiling where we can target the right person based on their need. So, for marketers, that’s a shift on…it isn’t about “I’m going after this person” it’s based on the context of the content they’re viewing and their first party information, which I own, how can I better deliver information to people. This really goes back to marketing fundamentals of understanding who you’re targeting, what is their journey, what information do they value, and how do you deliver that to them based on their behavior attributes.
Holly (KH): I think one of the things you had mentioned in the beginning RJ “is it more difficult, is it going to be harder as a marketer” I think we all agree that privacy is extremely important and ensuring that we’re compliant particularly in this space because it’s so important. We’re talking about patients with very significant diseases and their data is very important to them. As a marketer, one of the things that is really important and it does come down to our fundamentals is understanding the needs of that patient, understanding the needs of that customer. Both the patient and the healthcare provider. So, in a sense, even though it’s going to be more challenging because there’s a lot for us to learn. There’s a lot for us to be diligent about in terms of maintaining on top of what are the changes to legislations, what are the changes to the technology, to ensure that we understand what’s happening to maintain compliance, but it also is allowing us to really look at the customer journeys more deeply, to gain better insights, to really look at what they are and to create that content that’s more engaging with customers, and by creating that content that’s going to be more engaging based on what the richness of the understanding of that customer journey is will allow us to really help for our customers to form a stronger relationship with the brands. Even though it will be challenging, I think it will be better overall for everyone.
RJ (PMN): We will be back in just a minute with Holly and Kamran after a word from our sponsor.
RJ (PMN): Okay we are back with Holly and Kamran from Klick Health and we’re going to jump right back into it. Are there any specific businesses that you see more at risk here versus others? I’ll give you an example, one of the things that I hear a lot about when you listen to Wall Street talk about CCPA and the privacy regulations happening in other states as well, is that they feel that this is erecting very strong boundaries to entry for the larger incumbent. So, Google, Facebook, Amazon, the ones who have first party data on individuals and they have them logged in all the time. In a lot of ways this potentially gives them an even bigger competitive advantage. Do you see it that way and do you see any particular businesses being potentially disruptive more than others?
Kamran (KH): I do think first party information and companies who really have a mindset towards building that will be in a stronger position and with our clients we’re working on is thinking more about how they can build out first party audiences for their portfolio of brands. What Holly mentioned for example, if you have a portfolio for GI do you treat those brands as two independent brands or do you really start thinking about those as a unified portfolio where you’re looking at each healthcare professional as well as each patient across both of those, and that does enable pharmaceutical companies and brands to start building first party audiences. To your point, the wall gardens you always hear about, whether it’s Facebook or Google do have an ability to have a rich understanding of people’s behaviors that enable us to go in targeting those behaviors versus an individual so we are kind of anonymizing who the person is but they are in a stronger position for sure.
RJ (PMN): Yea, so for everyone’s benefit this law went into effect on January 1st CCPA but technically it’s retroactive for January 1st, 2019 and that you have to be able to answer incoming queries about data that’s been collected since that time. So, in some ways it’s ironic that it’s January 7th and we’re talking about it and yet the topic is still so highly relevant. There’s a study that eMarketer did, granted this is not pharma specifically, but it’s a survey of US businesses and specifically the security professionals within US businesses asking them if they are compliant with CCPA. This survey was taken in October of 2019 and 30% said they are currently compliant, 18% said that they will be compliant by the end of 2019, so just three months before the due date if you will. That left 52% answering otherwise, and that 52%, 27% of them said that they will be compliant sometime in 2020, 13% said that they will be compliant sometime after 2020, and 12% said that they have no plans to be compliant with CCPA. So, I’m wondering from where you sit, how is pharma positioned today? They tend to really be white knuckled about this kind of thing when it comes down the pike, are they ready and is the whole ecosystem within healthcare ready today in your view?
Kamran (KH): I think one thing I always think of is the pharmaceutical industry is probably more privacy minded than most just because of HIPAA and other regulations we have to work under. When you have that mindset, it really then gets me into “okay this is really an extension of that to marketing that wasn’t necessarily seeing those same restrictions.” So for me when we have these discussions and we started having these…I’d say the first, second quarter of 2019 with a lot of our clients and released a POV middle of last year because a lot goes into effect now and really enforcement will happen I believe middle of this year from the California attorney general standpoint. Really this has been…Yup got it. We understand. Let’s go in and audit all of our policies, let’s look at all of our forms, let’s make sure we get this stuff done in the opt in opt outs and the cookie pop up is correct if it’s coming from California. There are some policy decisions that have to be made by each legal team. I think of this as a natural extension of a patient centric pharmaceutical industry.
Holly (KH): Yea, I would agree, I think that pharma, this is the world in which we live in. I mean it’s the world in which we should live in. Privacy concerns are not at all or privacy changes are not at all a surprise to people in pharma. We live in this environment and we think it’s the right thing. So, I completely agree with Kamran, I think that one of the things that these legislations and the changes in technology sort of coming at the same time are bringing to us the reminder that we need to be hypervigilant in staying up to date on them. Being hypervigilant and understanding in education in terms of ensuring we know everything that’s happening. In terms of being on board if that makes sense, yes 100%.
Kamran (KH): RJ, one thing I think as Holly just mentioned being vigilant, I think that a lot of the legislative changes people paid a lot of attention to when you look at impact of cookies it’s almost frog frying pan situation where I think a number of people, even when I look at things I was reading in November to December weren’t really accounting for the impact. The reality is Safari started blocking third party cookies in 2018 and when you go in and start looking at your Google analytics information and you look at audience profiles within that you’ll see most of that data is coming from Chrome. So, everybody can go in and look at it. So this has already been happening as we go through it so now it’s really…That is really the area people are less aware of or were less aware of what is going on where as CCPA from a privacy regulation standpoint is something I think is just a natural mindset for this industry.
RJ (PMN): How does the technology change as you’re referring to specifically kind of the demise of the third-party cookie. How does it impact programmatic where so much of…people often refer to data as being the oil that drives the programmatic machine cause so much of it is about people targeting as opposed to contextual targeting? What’s your prediction on the impacts to programmatic advertising?
Kamran (KH): We have seen a shift in where programmatic ads are really being delivered. When you look at in app delivery versus website delivery programmatic on Safari will change. So, for our clients really what we look at is…what is the brand objective? What is the audience we’re trying to reach? What of that audience from a demographic and research standpoint is Safari versus Chrome based? Then we develop the plan to say what can we do hyper targeted, what proxies can we determine based on the data we have where we may not be able target an individual but use programmatic to do delivery. So, it is a little bit interesting, I really like it because you have to do a lot more thought behind how you adjust, and it is very unique to each brand and each pharmaceutical on their audience and their profile. So, what’s nice is it actually requires people to put their thinking caps back on and do a little bit more data modeling to effectively use programmatic platforms. So, we’ve been doing that as we see shifts in delivery, we’re now taking proxy measures on how we go after that audience where we couldn’t reach them in their traditional programmatic delivery standpoint.
RJ (PMN): You can say that the privacy debate if you will, the epicenter might be Facebook and Cambridge Analytica where I think some surprises came out in terms of how your Facebook usage might be used to profile you by some company you never heard of. It felt like, going into that, it felt like up until that moment privacy was kind of dying. Like the later generations didn’t seem to care as much about privacy. Where do you think the consumer falls into all of this? Let me ask that question in terms of demographics as well as the younger generations say under 30 and the 30+ generation. Is this something that they truly care about and are passionate about or is this something that potentially is an annoyance factor with more pop ups and more consent and more terms and conditions that people don’t read.
Holly (KH): We first need to think about when we’re talking about the audience for pharma versus say shampoo or a car…very different, and when we think about the changes in legislation relating to privacy they came about because of the audience because of the consumers wanting to have more rights to their own data. It is different, I think it’s probably less of a demographic age difference and more of a difference in say we’re talking about healthcare people with health concerns and diseases and concerns about who’s going to see and what they’re looking at versus shampoo or shopping. From a privacy technology perspective for say shampoo or anything you would be shopping for online, it may be considered annoying in that regard, but when it comes to your healthcare, the data regarding that I think it is widely believed that the consumers as well as all of us in the industry think it’s very important. I think that the changes we are seeing are because of the consumers and all of us think it’s very important.
Kamran (KH): RJ I’ll give you a personal antidote just from over the holiday break. I was searching on my phone for some gym equipment, and all of the sudden my wife told me that on her Instagram feed she started seeing an ad from a gym equipment vendor. That happened to be because the way technology works is that it was basically looking at our IP address, we share an IP address because of the way our network is set up at home from the external world standpoint. So that was fine, but let’s think of that in another business context. If someone is searching for a sensitive health care condition, do you really want an ad to show up on someone else’s device related to it? I think that’s the fundamental thing to keep in mind is when talking about health care, it is different from a consumer purchase. That’s why you have an NAI and a lot of others saying for these healthcare conditions we actually want to change the policies and baselines of what we think is acceptable as well.
RJ (PMN): Yea, that’s a great point. So, we’re on day 7 of CCPA being in effect. What does your crystal ball say about how this is going to unfold from here? How is it going to be enforced, who are they going to potentially go after first if it’s going to be enforced in an aggressive way and when do you see that unfolding? Is this something that they sit back and look for egregious violations or is this going to be something that they’re salivating to go after other potential companies.
Holly (KH): So, we don’t have a crystal ball unfortunately, but I don’t think we can predict when, where to the extent they would go after people not being compliant. I will say that our industry is hypervigilant in being compliant when it comes to things like privacy, it is the world we exist in. We do believe this is the right thing to do when it comes to a patient and their data and their privacy. So I think the thing that we can expect and what we should expect is that those of us as marketers are going to continue to be very on top of what’s coming out and very on top of what’s new since a lot of things have changed so quickly, technology is changing, legislation is changing, so we need to maintain that vigilant education for understanding what’s changing and ensure that we and all of our partners and all of us know that we understand what it means to be compliant. I think that’s what we can expect, and I think we can expect everyone to really lean into doing that because that is as I said, the world that we live in.
Kamran (KH): Yea, and RJ the other thing I would echo from Holly’s standpoint is really the effort to be compliant is not huge and the benefits are pretty big and understanding that I think from an education standpoint is critical. Then the next thing is after CCPA if you look at all of the changes being made by Apple, Google, Firefox, and Microsoft. Those are actually happening at a very rapid pace and the most important thing there is to really stay on top of that and so that why right now we’re continuously looking at releasing more POV’s related to this because what you can target from your other comment on what can you do with programmatic today will actually probably be different from three months from now and six months from now. That and we’re spending most of our time staying on top of that so we’re keeping business objectives in mind and adjusting how we take advantage of technology as it evolves.
RJ (PMN): Right, well Holly, Kamran thank you so much for your time today I can talk about this all day and I hope we get to regroup maybe in six months or a year and see how this has played out it’s going to certainly be an interesting future as it always is in the digital marketing space. This has been your host RJ Lewis with Pharma Marketing Network. Holly, Kamran, how do people keep in touch with you if they want more information? Kamran you have mentioned a point of view paper that Klick had written on this maybe if you can give that address so people can get it.
Kamran (KH): Yes, my twitter handle is @Kamrans. The point of view is Klick.com/privacy-&-cookies
Holly (KH): My email address is Hhenry@klick.com
RJ (PMN): Excellent. Thank you so much for joining us today and we’ll talk to you soon.
Listen to this podcast, Ep. 007 – Holly Henry and Kamran Shah here: https://www.pharma-mkting.com/the-pharma-marketing-podcast/