Healthcare and Pharma Digital Spend Rises [Key Trends Report]

Spend will reach $1.18 billion this year

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Advertising spending on paid digital media by the US healthcare and pharmaceutical industry will hit $1.18 billion in 2013 and rise to $1.47 billion by 2017. Though spending is growing quickly in some less-regulated sectors of the healthcare industry, continued privacy concerns, regulatory uncertainty around prescription medicines and patent expirations for blockbuster drugs will continue to put a damper on pharmaceutical-related investments.

eMarketer estimates that healthcare and pharmaceutical marketers—including marketers of prescription and over-the-counter products, facilities, services, research, healthcare professionals, hospitals and biological products, as well as establishments providing healthcare services and social assistance for individuals—will invest 54% of their paid digital dollars in direct-response efforts this year. The remaining 46% will be invested in branding-focused campaigns. Search and display will command the largest chunks of digital spending, with growth expected in the areas of mobile, local, video and native advertising.

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Among industries individually tracked by eMarketer, the healthcare and pharma industry spends the least on paid online and mobile media, and growth is expected to remain sluggish over the next several years. eMarketer’s current forecast anticipates that the healthcare and pharma vertical will remain in last place when ranked by digital ad spending per industry through 2017.

Moreover, eMarketer expects the healthcare and pharma industry’s share of total US digital advertising to fall from 2.8% in 2013 to 2.4% by 2017.

At the same time, however, pharma marketing targeted to healthcare professionals is on the rise. An April 2013 survey of US healthcare marketers from Medical Marketing & Media and Ogilvy CommonHealth found that an average of 75% of healthcare marketing budgets were allocated to reaching healthcare professionals; only 25% were aimed at consumers. The same study found that 40% of respondents planned to increase marketing targeted at physicians in 2013, compared with 36% who planned to increase patient-focused spending.

Despite the current situation—and a majority of direct-to-consumer (DTC) spending still being pumped into broadcast and print media—most studies indicate that US advertising and marketing execs in the healthcare and pharma industry are more bullish on increases in digital advertising than on traditional tactics. A fall 2012 study by Advertiser Perceptions asked a sampling of these professionals whether they planned to increase or decrease their ad spending in specific media in the next 12 months and then calculated the difference between percentages. The study’s resulting “optimism index” showed the highest numbers for most digital media, indicating more intent to increase spending. Indexes for traditional print media, such as magazines and newspapers, were negative.


The full emarketer report, “The US Healthcare & Pharmaceutical Industry 2013: Digital Ad Spending Forecast and Key Trends,” also answers these key questions:

  • How much will healthcare and pharmaceutical marketers spend on paid digital advertising in the next five years?
  • How much of their digital budgets are healthcare and pharma marketers spending on direct response vs. branding initiatives?
  • How are online and mobile platforms changing the way the healthcare and pharma industry approaches advertising?

 Video courtesy of © ReeldealHD

Are you interested in using video content (stock or bespoke) for your next Healthcare marketing project feel free to contact us erwin@reeldealhd.com

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Video Ad Spending: Moving From TV To Online

Video is the fastest-growing digital ad format according to eMarketer. US digital video ad spend is expected to rise by 41.4% this year and by nearly 40% next year as well, when outlays will reach $5.7 billion.

Findings from the Interactive Advertising Bureau (IAB) show that much of that increased digital video spending will come out of former TV budgets. Seventy percent of buy-side US senior executives told the IAB they would likely move TV dollars to digital video in the coming year. An even greater 75% of all US senior executives surveyed said the same, suggesting there is significant excitement around digital video from all corners. However, those on the buy side may be slightly more realistic about how budgets will really move.

As to which digital video ad formats would likely see the biggest bumps in investment, an April 2013 study from Be On, a division of AOL, found that 73% of marketers polled worldwide expected to increase spending on pre-roll ads over the next 12 months. Social video ads came in second, at 53% of respondents.

Putting dollars to digital video, though, does not have to mean leaving TV behind, and there are increasing opportunities for cross-platform ad campaigns, something marketers seem particularly excited about.

According to the IAB, nearly two-thirds of respondents who had previously launched cross-platform ad buys seemed happy enough with their results that they said they would increase their budget for combined TV and digital video buys going forward.

Brics set to eclipse western digital appetite

Media and entertainment companies are facing sharp changes in their global customer base over the next four years as a growing middle class in Bric countries and other fast-growing markets narrow the gap between digital media “haves” and “have-nots”, a new forecast cautions.

PwC, the audit and consultancy firm, sees Brazil, Russia, India, China and the once small media markets of the Middle East, north Africa, Mexico, Indonesia and Argentina doubling their share of global entertainment and media revenues to 22 per cent by 2017, even as digital “tipping points” transform larger western markets.

China, now the fifth-largest media market, will overtake the UK and Germany to become the third largest after the US and Japan by 2017. Brazil will pass Canada, South Korea and Italy to become the seventh largest and India will pass Australia to be just outside the top 10, PwC forecasts.

On a global basis, mobile internet revenues will surpass those from fixed broadband by 2014, PwC predicts, and the spread of smartphones and tablets enabled by mobile broadband will take digital entertainment and media spending to 44 per cent of the total in mature markets by 2017.

This growth in smart devices is “democratising” access to media, said Marcel Fenez, head of PwC’s global entertainment and media practice. “Two to three years ago, penetration of smart devices was low.

“They were expensive and only available in certain markets, and the infrastructure wasn’t there to support them,” he noted, adding that the challenge for media companies would be to understand and serve their new, more international customer base.

Even as consumers shift their consumption to digital media, however, they are still proving reluctant to shift spending proportionately, suggesting that the media industry’s concerns about exchanging traditional dollars for “digital dimes” will persist.

Consumer spending on digital content, which accounts for just 9 per cent of entertainment and media revenues, will grow to only 16 per cent by 2017, forcing media companies to rely more on advertising, business-to-business revenues and other digital income.

Digital advertising revenues will continue their rapid growth, PwC predicts, but gaps will persist between the percentage of advertising spent online and the time consumers spend on digital platforms.

This was because advertisers still needed better cross-media measurement tools, Mr Fenez said, noting that “measurement standards have generally tended to lag the developments in the media”.

PwC, which forecasts a tipping point where home video revenues overtake box office takings in the US in 2017, predicts a blurring of the lines between technology and media companies as groups from Google’s YouTube to Netflix, the streaming video platform, invest in producing their own content. There is “a race for content,” Mr Fenez said

Internet ad sales reach new high of $9.6 billion

Ad revenue from digital advertising in the U.S. shot up almost 16 percent in the first quarter compared with the year-ago period, according to the IAB.


(Credit: IAB)

Revenue generated by online advertising hit a new record in the U.S. last quarter.

Total first-quarter sales hit $9.6 billion, up 15.6 percent from the $8.3 billion seen in the first quarter of 2012, according to the Interactive Advertising Bureau and PricewaterhouseCoopers. The latest numbers reflect an ongoing shift to Internet advertising on the part of marketers as revenue continues to grow by double digits.

“Consumers are turning to interactive media in droves to look for the latest information, to connect with their social networks, and simply to be entertained,” IAB CEO Randall Rothenberg said in a statement. “This first-quarter milestone clearly illustrates that marketers recognize that digital has become the go-to medium for all sorts of activities on all sorts of screens, at home, at the office, and on-the-run.”

The numbers are based on data from the IAB’s Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC. The report captures information directly from companies that sell digital advertising online.