Background DMD’s Email Year in Review features data from millions of emails sent to healthcare professionals (HCPs) in 2020 by pharmaceutical, medical device, and diagnostic companies. This report provides healthcare marketers with benchmarks and insights to guide their planning and execution of email marketing in the year ahead. SM The analysis draws from DMD’s True Identity database, the only database of first-party sourced, opted-in, and legally compliant HCP identity data. This database also includes records of the digital engagement (web and email) for all participating HCPs. For this report, email data from October 31, 2019 to October 31, 2020 was analyzed, covering 32 million emails to U.S.-based physicians, nurse practitioners, physician assistants, nurses, and pharmacists on behalf of healthcare brands. This analysis also includes a deeper dive into the email performance of several therapeutic specialties. With data for 27 medical specialties and 114 subspecialties, DMD can provide additional analyses to meet your needs. Contact DMD if you would like a custom analysis. Contents Background ..................................... 1 Email Marketing to HCPs: The COVID-19 Impact............................. 2 Open Rates in a Pandemic .......... 2 Personal Email Addresses vs Professional Address................... 3 COVID Email Campaigns.............. 3 Target List Coverage........................ 4 Email Engagement Metrics ............. 5 Open Rate ...................... 5 Click-To-Open Rate (CTOR) ......... 5 Read Time ................................... 6 Bounces and Unsubscribes ......... 6 Deployment and Deliverability ....... 7 Deliverability ............................... 7 Inbox Challenges in 2020 ............ 7 Gmail ....................................... 7 Yahoo ...................................... 8 Send Time Optimization ............. 8 Predicting 2021 ............................... 8 www.dmdconnects.com ©2020 DMD Marketing Corp. | Proprietary and Confidential 1 Email Marketing to HCPs: The COVID-19 Impact Open Rates in a Pandemic In 2019, emails deployed to HCPs by DMD on behalf of pharmaceutical, medical device, and diagnostic companies had an average open rate of 9.4%. However, as COVID began to receive coverage in the professional and lay press as early as January 2020, open rates began to climb. At the peak of the COVID-19 outbreak in April 2020, the open rate average was 18.9% [Figure 1], a nearly 300% increase compared to the April 2019 average open rate of 7.0%. Figure 1. The increase in open rates may have been the result of: • • Reduced sales rep visits leading to more reliance from HCPs on email to obtain drug and brand information. Medical professionals seeking COVID information from credible sources, including pharma. While not all pharma email during this period mentioned COVID, pharma email did experience an unprecedented lift in opens, suggesting HCPs were investigating all sources for relevant information. Whether driven by COVID or other factors, the open rate for 2020 is holding at several points higher than 2019, suggesting a new normal for this audience. www.dmdconnects.com ©2020 DMD Marketing Corp. | Proprietary and Confidential 2 Personal Email Addresses vs Professional Address Historically, emails sent to HCPs at their opted-in personal addresses have a higher open rate than the same message sent to a business address. This remained consistent during the initial COVID period [Figure 2]. However, by July 2020 open rates at personal addresses had returned to their traditional levels, while professional addresses remained elevated. Figure 2. COVID Email Campaigns From March 2020 to June 2020, DMD deployed 21 pharma campaigns that included COVID in the subject line. By July, the mention of COVID in these emails had dropped to almost zero. For comparison, DMD’s hospital clients still routinely include COVID content in outbound emails. Takeaway The COVID-19 pandemic seemed to have a dramatic effect on the engagement rates of email sent by pharmaceutical, medical device, and diagnostic companies to their HCP audiences. While metrics such as open rates have come down from the highs seen early in 2020, they remain elevated over previous years. COVID-19 is still a highly relevant and engaging topic to HCPs. DMD’s AIM® XR data, which monitors physician activity across 2,100-plus medical websites, continues to show that stories related to COVID are among the most read content, regardless of specialty. If your brand or company has any COVID content, DMD’s recommendation is to include it in your HCP email marketing. www.dmdconnects.com ©2020 DMD Marketing Corp. | Proprietary and Confidential 3 Target List Coverage A key to successful HCP email marketing is reaching as many individuals as possible from a target list. During the reporting period, DMD received 273 target lists from pharma companies, and matched them to the DMD True IdentitySM database to determine how many target prescribers could be reached via email. Overall Match 93.3% Average match rate of opted-in emails on a target list Therapeutic Categories with Highest Match Rate 96.0% Rheumatology average match rate of opted-in emails on a 93.7% Blood disorders (non-oncology) average match rate of opted- 93.5% Oncology average match rate of opted-in emails on a target target list in emails on a target list list Match Rates for Most Requested Therapeutic Categories 93.5% Oncology average match rate of opted-in emails on a target 92.4% Respiratory average match rate of opted-in emails on a 90.5% Dermatology average match rate of opted-in emails on a list target list target list Takeaway Expect a 93% email address match for your target list with a variance of ±3%. Medical specialties with less target list demand may have a slightly lower match rate. Target lists with NPs and PAs might have a lower match rate. www.dmdconnects.com ©2020 DMD Marketing Corp. | Proprietary and Confidential 4 Email Engagement Metrics Email is an important channel for every brand’s marketing goals, playing a crucial role in a brand’s strategy and communication efforts. To understand the effectiveness of email campaigns, three engagement metrics are commonly used: open rate, click-to-open rate, and read time. Open Rate Opens by Device Type Definition: Total opens divided by total delivered emails Average open rate for all therapeutic areas 12.28% Average open rates for 3 most requested therapeutic areas Oncology 10.29% Respiratory 12.74% Dermatology 14.7% Click-To-Open Rate (CTOR) Definition: Total clicks divided by total email opens Average CTOR for all therapeutic areas 3.10% Average CTOR for 3 most requested therapeutic areas Oncology 2.64% Respiratory 3.86% Dermatology 3.33% www.dmdconnects.com ©2020 DMD Marketing Corp. | Proprietary and Confidential 5 Read Time Definition: The percent of email recipients who had the email open for one of three time ranges. Read Glanced Skimmed more than 8 sec. 2-8 sec. less than 2 sec. All therapeutic areas 51.82% 16.16% 32.02% Oncology 56.59% 14.41% 29.02% Respiratory 53.22% 15.95% 30.82% Dermatology 51.86% 15.93% 32. 21% From 2016 to 2019, the Read category (more than 8 seconds) averaged 36% of email opens. Read time engagement is up significantly in 2020. Bounces and Unsubscribes DMD-measured trends for bounces and unsubscribes have been consistent year over year. All Pharma emails Hard Bounce 0.39% Unsubscribe Rate 0.29% Unsubscribes/Opens Rate 3.33% Takeaway Due in large part to peaks in email engagement resulting from COVID information-seeking in the first half of the year, all engagement metrics are up over last year. However, it should also be noted that engagement during the June to October period remains up over the same period last year. This implies that either email activity during COVID has had a lasting effect or that other factors are contributing to increased engagement this year. Going into 2021, these higher engagement rates appear to be the new norm. www.dmdconnects.com ©2020 DMD Marketing Corp. | Proprietary and Confidential 6 Deployment and Deliverability During the reporting period, DMD deployed 84,969,830 emails to HCPs, of which 32,288,532 were on behalf of pharmaceutical, medical device, and diagnostic companies. DMD uses a deployment architecture custom-built for healthcare consisting of: • • • • 3 email software platforms (ESPs): o Adobe Campaign, Oracle Responsys, and Acoustic Marketing Cloud 7 sending domains 14 IPs o Specific IPs dedicated to leading email service providers such as Gmail and Yahoo o Specific IPs dedicated to the delivery of email to consumers (i.e. patients) Included on the whitelists of 93 health and hospital systems Deliverability To estimate inbox deliverability, DMD uses a service provided by eDataSource (https://www.edatasource.com/). 86% Average inbox deliverability score Inbox Challenges in 2020 Because of the challenges posed by email delivery to email service providers, such as Gmail and Yahoo/AOL, some pharmaceutical companies have abandoned sending to these addresses (which is, unfortunately, a significant missed opportunity: on average, 22% of HCPs are excluded when Gmail addresses are not used). Here is what DMD observed regarding these two leading platforms during this reporting period: Gmail Gmail continues to be a challenge for anyone sending promotional email. In 2020, Gmail made frequent changes to their filtering algorithm, including moving away from looking at the last time a recipient engaged with the sender, to adopting a message stream view. This approach contextualizes emails from a sender into distinct marketing streams, then places the emails within a folder structure in Gmail based on the last time a recipient engaged with that specific stream. During the course of the reporting period, DMD adapted its Gmail sending strategies to work with this new message stream approach. These adaptations were possible because DMD maintains a dedicated Gmail delivery IP/domain, coupled with the unique ability to select the most active email addresses on a daily basis. Between March and May, Gmail, like many other commercial inbox providers, loosened their overall filters to allow for a more fluid transfer of pandemic information. COVID-related emails, in particular, saw very high inbox placement and engagement in Gmail during this time. However, by mid-July Gmail returned to their pre-COVID filtering practices, and typical challenges with Gmail inbox deliverability returned. www.dmdconnects.com ©2020 DMD Marketing Corp. | Proprietary and Confidential 7 Yahoo The Yahoo/AOL platform is only slightly less challenging than Gmail. In 2020, Yahoo/AOL continued to tighten its filters to become more like Gmail. However, unlike Gmail, Yahoo/AOL is still using the traditional last-engagement-with-sender method. DMD anticipates that in 2021 Yahoo/AOL will move towards a message stream approach. To deal with these new and evolving changes, and to maintain email deliverability, DMD dedicated additional IPs/domains to Yahoo/AOL in 2020, as well as throttled deployment volumes more aggressively. Send Time Optimization Because of the challenges of delivery and engagement, DMD invested many more resources during this reporting period into send time optimization (STO). STO is a data-driven technique to place an email into an HCP inbox when they are most likely to be able to open it. STO typically drives a 2-percentage point improvement in open rates, i.e. 10% goes to 12%. In addition to the obvious benefit for engagement, the improved open rates affect delivery algorithms, leading to more email successfully placed in the inbox. DMD strongly recommends using STO for maximum engagement and deliverability. In 2021, DMD will launch an advancement to STO called strategic send time optimization (SSTO). Any healthcare marketers already using STO should consider adopting SSTO to further enhance email performance. Takeaway All healthcare marketers need to monitor inbox placement for their email campaigns, and continually optimize to achieve the best results. Strive for at least an 80% deliverability rate as measured by a third-party service. Do not give up on consumer platforms like Gmail and Yahoo/AOL. Although it takes more work to achieve optimal delivery on these platforms, you are likely to lose a portion of your audience if you don’t. If you are not achieving the open rates you expect, look to deliverability as an area of opportunity for improvement. Predicting 2021 2020 was a year of uncertainty and change in the United States, and this was reflected in the email channel. Engagement rates are up and historic learnings about things like optimal delivery times have changed. We do not yet know if the results observed in 2020 will hold for 2021 or will return to their previous levels. Deployment to email addresses at consumer email service providers will continue to be a challenge and will require constant monitoring and adjustment to ensure optimal deliverability. For those brands willing to do this, they will reach more of their target audience than their competitors. However, given the low cost, high engagement and target-level reporting, along with uncertainty around personal promotion, email may be the most important marketing channel to HCPs in 2021. We are predicting that 2021 will be the year of triggered email. Many brands are already doing these types of campaigns but we think that triggered email will become mainstream in pharma and healthcare in the coming year. When combined with traditional broadcast email delivery, triggered campaigns are returning the highest engagement rates that DMD has measured in this industry. www.dmdconnects.com ©2020 DMD Marketing Corp. | Proprietary and Confidential 8 Another trend we saw gain traction in 2021 is matching programmatic and social segments with the corresponding email segment, to serve timely and related ads or social campaigns during email campaigns. This creates an opportunity to surround the HCP with brand messaging, and offers many opportunities for triggered engagements. Due to its effectiveness, DMD strongly believes this omnichannel trend will continue to increase in 2021. While many brands are already using send time optimization (STO), we see this also becoming mainstream in 2021. For a minor investment, STO consistently adds two percentage points to open rates. Leading edge brands will transition to strategic send time optimization (SSTO) this year. Email continues to bring value to HCP omnichannel strategies. Successful optimization of email marketing campaigns should return significant dividends in 2021. Engagement rates are up (and expected to stay up), while unsubscribes have stayed consistently low, and costs remain flat. Never before has there been a more important time for pharmaceutical, medical device, and diagnostic marketers to be data-driven in their HCP email marketing. Not only do marketers need to collect and analyze data generated by each email deployment, but they must also act quickly on learnings. To realize even greater email success, it is crucial to have email experts available to your brand. The channel is in flux and requires daily monitoring and optimization. Now is the time to evaluate how the transforming landscape of HCP email will affect your 2021 goals – and DMD can help. Contact us today to discuss. www.dmdconnects.com ©2020 DMD Marketing Corp. | Proprietary and Confidential 9