Non-prescription health products driving advertising growth
Health products that do not need a doctor’s prescription are driving advertising. Advertising expenditure by over-the-counter (OTC) healthcare brands in 13 key markets will expand by 7.6% in 2022 and 5.0% in 2023, according to a forecast by ad firm Zenith.
OTC healthcare ad spend is predicted to grow from USD 20.1 billion in 2021 to USD 22.7 billion in 2023, 36% above pre-pandemic spending level in 2019.
“The pandemic has focused consumers’ attention on their health and disrupted their reliance on traditional OTC distribution channels,” said Jonathan Barnard, Head of Forecasting, Zenith. “Brands will continue to step up their investment in digital advertising as the rise of ecommerce gives it a greater role in driving OTC sales and brand growth.”
”OTC advertising grew throughout the pandemic. OTC adspend expanded by 6.8% in 2020 while the market as a whole shrank by 3.5%, as healthcare messages soared in relevance for consumers.”
”Demand for cold and flu remedies sank sharply as social distancing cut their transmission, but most other sub-categories continued to grow, and sales of sleep aids spiked.”
Zenith forecasts growth in OTC advertising to remain healthy over the next two years, as brands defend their price premiums and ecommerce platforms compete to establish dominance.
”OTC has lagged some way behind the market as a whole in embracing ecommerce, but the lockdowns and other restrictions led to a leap in OTC ecommerce in 2020. Now that more consumers are aware of and comfortable with the option of shopping for OTC products online, it will become an ever more important sales channel over the next few years.”
”This means traditional distributors such as pharmacies and supermarkets are facing new competition from digital ecommerce platforms, and brands have new opportunities to launch new partnerships or even direct-to-consumer ventures. The increased competition for traffic and sales will fuel continued growth in brand and performance advertising.
”OTC healthcare makes heavy use of television for its high-impact mass reach. OTC advertisers spent 38% of their budgets on television advertising in 2021, compared to 21% for the average advertiser across all categories. OTC brands also spend more on radio and magazines – radio for its mass reach and magazines for their high impact.
Zenith forecasts that OTC brands will increase their digital adspend at an average rate of 11% a year between 2021 and 2023, while radio grows by 5%, television by 3%, and magazines shrink by 3%. Digital will account for 49% of OTC advertising in 2023, up from 46% in 2021.
“The continued shift to digital allows OTC brands to use smart segmentation and dynamic creative to market the same products to different people with different needs, within the framework of regulations for digital advertising in this category,” said Benoit Cacheux, Global Chief Digital Officer, Zenith.
“The gym-goer with muscle ache, the office worker with a headache and the parent whose child has growing pains all need pain relief, but brands need to talk to them in different ways to persuade them most effectively. This ability to tailor the creative to the needs of the audience gives digital advertising an advantage that traditional media never had.”
The 13 markets included in this report are Australia, Canada, China, France, Germany, India, Italy, Poland, Russia, Spain, Switzerland, UK and USA, which between them account for 74% of total global adspend.
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