Ad spend for over-the-counter healthcare brands in 13 key markets will grow 7.6% in 2022 and 5.0% in 2023, according to Zenith’s new Business Intelligence – OTC Healthcare report. This growth will be driven by branded personalized digital advertising, as well as performance advertising driving traffic to OTC e-commerce platforms.
The report indicates that over-the-counter advertising has increased throughout the pandemic and increased by 6.8% in 2020, while the market as a whole has decreased by 3.5%, while health messages have gained in relevance to consumers. Demand for cold and flu remedies fell sharply as social distancing reduced their transmission, but most other subcategories continued to grow and sales of sleep aids soared. When the pandemic hit, brands in many categories reduced or even ceased communications, fearing that their messaging would no longer be appropriate, or in some cases counterproductive in the new context. This has given OTC brands the opportunity to use many inexpensive media to boost their contribution to consumer health and well-being.
OTC advertising then grew by 12.8% in 2021, although in this case its growth was slightly lower than that of the overall market, which had some catching up to do. We expect OTC advertising growth to remain healthy over the next two years as brands defend their price premiums and e-commerce platforms compete for dominance.
We project that over-the-counter healthcare ad spending will grow from US$20.1 billion in 2021 to US$22.7 billion in 2023, 36% above the pre-pandemic spending level of 16 .7 billion US dollars in 2019.
Going digital helps brands tailor messaging to specific consumer needs
When the consumer first purchases an over-the-counter product, they often spend time researching the purchase and discussing it with family, friends, and trusted advisors like pharmacists. However, after the first purchase, buying OTC products quickly becomes routine, becoming part of the usual shop. The fundamental role of OTC advertising is therefore to maintain brand awareness at the point of purchase, much like FMCG advertising. Likewise, over-the-counter healthcare makes heavy use of television for its massive, high-impact reach. OTC advertisers spent 38% of their budget on TV advertising in 2021, compared to 21% for the average advertiser across all categories. OTC brands are also spending more on radio and magazines – radio for its mass reach and magazines for their high impact.
Until recently, it was difficult to use digital advertising to create emotional connections and lasting brand awareness. The rise of high-quality advertising environments, online video and retail media – advertisements that appear on retail websites and e-commerce platforms – means brands can use digital to convey effectively their values until the sale. Brands are also spending more on performance advertising as OTC e-commerce expands.
Zenith predicts that OTC brands will grow their digital ad spend at an average rate of 11% per year between 2021 and 2023, while radio grows 5%, TV 3%, and magazines decline 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 creativity to market the same products to different people with different needs, within the regulations of digital advertising in this category,” said said Benoit Cacheux, Global Chief Digital Officer, Zenith. “The gym goer with sore muscles, the office worker with headaches, 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 as effectively as possible. This ability to tailor creative to audience needs gives digital advertising an edge that traditional media never had. »
“The pandemic has focused consumers’ attention on their health and disrupted their reliance on traditional OTC distribution channels,” said Jonathan Barnard, head of forecasting at Zenith. “Brands will continue to increase their investment in digital advertising as the rise of e-commerce gives it a bigger role in driving OTC and brand sales growth.”
The 13 markets included in this report are Australia, Canada, China, France, Germany, India, Italy, Poland, Russia, Spain, Switzerland, UK and the United States, which alone accounts for 74% of total global ad spend. The report covers non-prescription drugs and remedies, including cold and allergy remedies, contraception, digestive care, eye care, oral care, pain relief, skin care , sleeping pills, smoking cessation aids and wound care.
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