This article is sponsored by Dreamscape Marketing. This article is based on a Behavioral Health Business discussion with Dan Gemp, President of Dreamscape Marketing. The discussion took place on October 13, 2022 during the BHB Invest Conference in Chicago. The article below has been edited for length and clarity.
Behavioral Health Business: We’re going to talk a little bit about some digital trends here that Dan has seen in the marketplace, where they’re arguably the largest provider providing these services in the market.
To kick it off, so I guess we’ve got some of the biggest operators and investors in the room today. How are you suggesting these clients invest in digital in 2023?
Dan Gemp: Do everything differently than you’re doing it now. There’s some macro trends. COVID was a reset for how we shopped for health care. It used to be weighted towards digital, Google was a great resource, and now it’s entirely digital. You’re all under-investing dramatically. You’re wildly under-investing in organic SEO, in direct comparison to paid ads, which you don’t own. There’s Google-flation, there’s an inflationary cost to all Google ads. I’m saying Google specifically, it’s not the internet, it’s not internet ads.
It’s Google that controls all health care, your top medical referral source is Google, and their costs go up, historically, by 12% a year. Over the last three years, it slowed down a bit, LegitScript, if you’re in SUD, has hedged it a bit but it still goes up about 2% or 3% a year. If you’re not adjusting your budget 3% upward annually, you’re losing market share. If you’re not doing organic SEO, which is a fixed cost to hedge your PPC, which is never expanding costs, you’re going to cost yourself tremendously. Competition is heating up, and models are changing. There’s a lot going on in 2023 that you need to just change entirely.
BHB: We’re obviously focusing on digital here, you talked about how things are going up. There’s been so much venture capital that’s been invested in this space, specifically in digital. Everyone in this room is now competing with people with $3 billion valuations, which they should or should not be. I guess, how are you advising your clients? These guys have huge budgets, and they’re just driving up the cost. Should they be trying to compete with these people, or are there other ways that they should be managing their business in terms of marketing dollars?
Gemp: There’s two options, and some of these guys are publishing content on it. There’s the model itself, MAT is blowing up. Outpatient telehealth, they’re very specific use cases that are succeeding. You’re going to see these models keep shifting, you’re going to see psychedelics ketamine keep growing, and you’re going to see value-based care come on the scene. We ask clients what they sell to begin every strategy conversation, what do you sell? I’ve never heard the same answer twice. They talk about hope and whatnot, and you’re not going to compete with a $3 billion company by selling hope, you need to have a specialty and invest in that, and that’s how you do tactical marketing against a Goliath entity.
BHB: I’m going to pick on the CEO of Teladoc who came out and actually said that digital spending right now, doesn’t make any sense. Would you agree with that, do you think it’s gotten so overhyped?
Gemp: There is a hubris in private equity, where their math is wrong. I’m not saying that I am right, I am saying that you all should check your math just in case. Digital marketing at a hyperlocal level is the cheapest source of medical patients across all channels, dentists, MAT, residential treatment. When you try to compete at a national scale, and you’re just trying to outbid the other guy at the auction, then you just have to outbid the other guy at the auction.
I would recommend becoming net publishers of content, you’re not going to really be a social influencer, the biggest social influencer in the space is Eminem. Not sure if anybody knows that. It’s not Hazelden Betty Ford, it’s not the Caring Foundation, it is Marshall Mathers. He has the most content published on addiction-specific become better, he has entire albums about it, and the most fans and followers. There’s even still an opportunity to become the biggest brand in this space, and that brand value will hedge your marketing costs as well.
BHB: All right, so you’re suggesting that they go local to be able to compete on cost and have a better opportunity.
Gemp: The bigger you are, the more local you need to go with your marketing.
BHB: Why is that?
Gemp: Waste. Oh, we’re big, so we’ll spend nationally, okay, if you’re comfortable wasting 30% or 40% of your budget, go for it. If you take that national budget and break it down at the town or county level, you can look at Chicagoland, very specific neighborhoods that have different primary drugs. It’s the same SUD problem, but it’s heroin here, fentanyl here, alcohol here, and it’s a pretty predictable market. There’s data sources, Bio-Spatial is one that we use for our campaigns. You can literally see a little red dot on a map of every single SUD-related hospital admission. You can map every little locale that you service and market to the town and county level, and you’re going to see massive efficiency that your in-house team is probably not even looking at.
BHB: I’d love to hear, so obviously invest locally, you’re going to get a better price for it. How do you recommend clients balance the short term versus long term in managing that process?
Gemp: That’s a tactical question. Marketing is marketing, but when you’re trying to go short-term versus long-term, it changes the strategies you use. It’s Google, digital marketing is still going to be your primary source, your dollars will best be spent on digital first, you’ll still have an outreach team, you will still have other partnerships. A short-term strategy, like we just opened a new location, we need to fill it up, that’s PPC, you do Google Pay Per Click advertising, you have to buy your initial market share. Long term, most operators never change that, and should actually cross over with organic SEO, you need to become a net publisher of content. That’s actually why we’re all here because of net publishers of content.
What you’ll see is the impact that is owned, you’re creating market share, you become a source of information, you are the answer to people’s questions on Google for free once you’ve built that content, and now you don’t have to pay for it anymore. Your media cost is edged by your long-term strategy of producing content, and that is SEO, you write pages, search engines, optimize them, and you outrank the other guy.
BHB: You keep bringing up the term net publisher of content, can you help explain what you mean there?
Gemp: Over the last few years, as new topics arrive, is MAT going to speak at the same event as Abstinence-based residential treatment? No, there was a war for like two years, and the clinicians didn’t even want to talk about each other. Now they’re sharing the stage, they’re on panels, all the models are relevant and growing. Value-based care, that’s what’s coming next, there are now events about it, and people are changing their models to fit that.
As a publisher of content, you have to discuss these things on your own assets on your website, with your staff, your clinicians, and need to write it down and put it on your website, and that’s all Google does. They read your content, and whatever words are in your content, you’re ranked for. If you optimize it, get some backlinks from other websites that are referencing your site as a source of information, then you outrank everybody. Hospitals do it, the Mayo Clinic advertised a 1.2% chance of survival for pancreatic cancer, but they wrote tons of content about it, and so far, as we all know, that is the best place to go in the world for pancreatic cancer treatment.
BHB: Interesting, so it’s about building that brand and making those long-term investments with that?
Gemp: If you’re storytelling, and you’re giving people answers to their questions, then you are a publisher.
BHB: Do you think enough people are actually telling the stories on their own websites right now?
Gemp: We recently learned that we’re the largest publisher in behavioral health, and to the point where we might even be skewing Google’s algorithm because of the volume of blogs we produce. We’re not your clinical team, we’re writing surface-level questions and answers to all content.
A lot of this content isn’t of a clinical depth, and that is what people are looking for. You need to really be producing multiple formats, video content, engage your team to speak at events, and do thought leadership and content sharing, and you’ll find that your cost per anything comes down dramatically. You become an influencer.
BHB: Obviously, it sounds like you guys are producing a lot of stuff at the higher level, do you recommend that people pull in their clinicians and get them in the mix to help create some more clinical content?
Gemp: Yes, but I would recommend your marketing people, your marketing team members interview the clinical staff and let them handle it. Your clinicians will not be good marketers. It’s inherently not in their program.
BHB: Can you ever go too deep on the clinical stuff or do you actually think that’s helpful?
Gemp: Surface level, Google reads in an eighth grade level and so do most Americans. I think that this industry forgets that, private equity folks are very good at math, very intelligent. This room is probably filled with the top 1% of IQs in the country, and your target audience is not necessarily that.
Keep it simple, if you’re interviewing clinicians don’t let them dive into the underlying traumas and all of that. Just get them to use buzzwords and explain why you’re a good fit for them, why you specialize in a single mother opiate addiction program, whatever that specialty may be. Have them talk about that and you’ll find more success at driving admissions from it.
BHB: All right. Let’s go back to the investors, because I know there’s a ton here. If I’m an investor in the room, how should I look at digital when looking at acquisitions today? Should I be able to put a value on that? How are you? Because before our conversation you actually said a lot of investors come to you to help put evaluation on things.
Gemp: It gets interesting. In marketing in this space, we’re this middle ground. People come to us before exiting saying, “I want to juice everything up so I can sell for maximum value.” We get a heads up six months, 12 months before someone goes to market and it works extremely well. You should sprint before you exit. Say that you’ve just acquired a place, here’s what happens.
You’ve got some marketing guy named Steve and you cut the marketing entirely. Our top source of client loss is acquisition. The acquirer always cuts the marketing and puts Steve in charge of it. Almost always 20% plus decline. We’re a private equity so Steve must be smarter than them. It’s not that I’m smart, it’s that I have everyone else’s data and your entire strategy should be based on data analytics paired with storytelling, your brand is storytelling.
Return on investment is data analytics. The example I give, is if you’re at an ATM machine and every time you put $1, $9 comes out and you bought a company that owned that, why would you turn that off? Why would you unplug that machine? It’s the reason you bought the company. I think that the two focuses would be, don’t stop marketing after you acquire somebody, accelerate it. Whether it’s internal or external doesn’t matter. Keep it going, don’t turn off the machine.
Then if you are looking at an exit yourself, always ramp up pre-exit. It’ll change your trajectory and it will impact your valuation, but focus on owned assets. It’s not just paid ads and rental media that’s going to help you. If you have a 1600 page website that outranks everybody, it’s a value add to buyers. It doesn’t necessarily impact the multiple, but it sure closes deals.
BHB: One thing I find interesting about space is I’ll pick on Lifestance and some other outpatient mental health companies, if they say they actually have wait lists of people that want to come. I guess for companies like that, how do you recommend, they don’t have the clinicians to staff it, how should they be investing in marketing and digital and things like that when they have a wait list? Do they not need to be doing it or is this a long-term plan?
Gemp: A little bit of offense and a little bit of defense. I would say that you could really minimize your paid media, your brand budget and display Ads and things like that to reduce your budget and still be effective, it’s the content marketing side, so produce more articles, video content, if shareable.
BHB: What percentage of sales should your digital marketing strategy be for a small to midsize company?
Gemp: Small to midsize? We track this very closely. We have quarterly benchmark reports available on our website if anyone wants. That’s free information. 20% to 30% for across all behavioral health. This is true of mental health primary, SUD and Autism, ABA. 20% to 30% is a sweet spot where of all new patient acquisition, that will be your most efficient level of spend. Now we’re working with groups where they get 70% or 80% of their patients from digital marketing.
It works, it is infinitely scalable. The demand vastly outweighs the supply right now. Fentanyl death is at an all time high, suicide is at an all-time high. Everyone lost their minds, double digit increase of losing your mind during COVID. The demand is there, but your efficiency is not.
BHB: You’ve been talking a lot about specializations. I’m curious from your perspective, what’s the most expensive customer to acquire right now in terms of specialization?
Gemp: It’s residential addiction treatment and it’s because treatment centers lack differentiators. You don’t tell me what you’re specializing in. Your treatment center is the same as your treatment center, it’s the same as that treatment center over there. Your cost per admission from paid ads will be thousands more expensive than if you had had a specialty program or lead with certain levels of acuity. Detox is much less expensive admission than a Residential SUD.
BHB: Because it’s getting more specific. If you run a behavioral health program in one state, but your clients come from major cities other than where you’re located, what’s the best digital strategy?
Gemp: I actually get this question a lot. If you’re in a concentrated market, California, Florida, a lot of times the best marketing strategy is to go outside of California or Florida. You’ll get better insurance a lot of the time and a different type of demand. You can put a physical sales team there, this is not digital marketing, and it’ll be extremely cost effective. You just need to use data to pick where.
Look at what hospitals are getting SUD admissions in surrounding states and what insurance is, what payers are involved there and put outreach reps there. One salary is a fixed cost monthly if they’re in a target rich environment and hospitals don’t want SUD patients as a rule of thumb, that will be your best cost per admission. Otherwise with digital, paid ads would be way more expensive outside of your own state, specifically state borders.
Organic SEO will hedge that cost dramatically. If you’re in North Carolina, you can rank number one in Virginia. We have a group doing that right now and it succeeds every month. Multiple admissions from Virginia and they have no physical footprint there, no outreach there. The internet is magic for that purpose.
BHB: In terms of how people are staffing their marketing departments. Obviously I’m sure you’d love to do everything for them, but that might not be sustainable long-term. Would you recommend they invest internally and then also utilize an outside service to help with specialty things?
Gemp: Absolutely. You need staff who knows your business, otherwise an outside resource like us that theoretically is making it up. They’d have to have an awful lot of industry knowledge, clinical knowledge and unique publication ability to succeed for you. You need internal staff that knows your approach, your clinical team, the things you are best at, your differentiators and then you’ll have a much more effective use of your dollars.
The factory to produce a volume would be an agency or an outsource partner. The strategy itself should be rooted deeply within your organization, even if that’s one or two individuals in your marketing team. It’s always an investment. Your marketing staff will never be a cost. They’re always self-funded.
BHB: Do you have any big opportunities that you see for 2023?
Gemp: I would specifically look at your model and either expand your continuum, if you’re residential rehab only, add detox or something, or I would explore other models for your expansion. If you are a residential treatment campus, you might want to look into MAT, you might want to look into telehealth specifically for your alumni program or something. Increase your mix, increase your continuum and you’ll have a really good next, I’m saying three or four years, so it’ll future proof you.
BHB: Are you seeing a lot of people start to experiment with marketing like ketamine? Obviously it’s very hot right now.
Gemp: We might be doing that ourselves. There is an opportunity everyone, the market that has not yet come anywhere near its peak would be ketamine and in the next couple years you will see psilocybin, magic mushrooms are going to be regulated medicine in the United States. Lobbyists are already hard at work. You’re going to find psychedelics to be a massively expanding market over the next three to five years.
Look into it, you can still be the market leader right now. You can publish content on it now before you’re even operating. Produce content, information, what’s coming, predict the future and then it will happen. If you’re first to market, currently no one else really is. There’s no dominant player yet.
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