OTC Healthcare Ad Spend to Keep Growing This Year and Next: Shift to Digital Continues

March 29, 2022

Ad spending by over-the-counter (OTC) healthcare brands in 13 key markets (representing 74% of global ad spend) grew during the pandemic and will continue to do so over the next couple of years, according to a new forecast from Zenith.

Ad spending growth by OTC brands far outperformed the market in the early days of the pandemic, with the 6.8% rise in 2020 coming amidst an overall shrinking of the market, of 3.5%. Zenith attributes the growth to a surge in relevance of healthcare messaging for consumers.

Increases in ad spend continued into 2021, with OTC brands upping their expenditures by 12.8%, although this trailed the overall ad market, which rebounded strongly after the earlier contraction.

Looking ahead, Zenith expects ad spend by OTC brands to expand by 7.6% this year and by 5% in 2023, by which time the total across these 13 key markets of $22.7 billion will represent a 36% hike on the pre-pandemic 2019 level of $16.7 billion.

Digital to Near Half of OTC Ad Spend in 2023

OTC brands’ ad spend has historically been tilted more towards legacy than digital media, unlike the global ad market as a whole, for which digital is now the main medium. This is due to the main goal of OTC advertising being “maintaining brand awareness at the point of purchase,” according to Zenith, for which the mass reach and impact lent by traditional media was favored over digital. Indeed, OTC brands devoted 38% of their budgets to TV ads last year, far above the 21% average for advertisers across categories. OTC brands likewise allocated an above-average share of their budgets to radio and magazines.

However, more recent developments in digital media such as online video and retailer media have offered advertisers higher-quality environments, while the rise in OTC e-commerce is pushing some to invest more in performance marketing. As a result, Zenith expects OTC brands to increase their digital expenditures by 11% per year between 2021 and 2023, a faster rate than expected for both TV (+3% per annum) and radio (+5%). With magazine ad spend predicted to shrink by 3% a year during this period, Zenith forecasts digital accounting for 49% of OTC ad spend in 2023, up from 46% in 2021.

About the Data: Per Zenith, “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. The report covers medicines and remedies sold over the counter, including cold and allergy remedies, contraception, digestion care, eye care, oral care, pain relief, skin care, sleep aids, stop-smoking aids and wound care.”

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