And some medical and pharma advertisers are sold. In Q1 2023, advertisers from big names such as AbbVie and Novo Nordisk spent more than $494mm on YouTube, representing a 26% YoY increase (up from $391mm in Q1 2022). The number of pharma and medical companies buying YouTube ads dropped by 29%.

For the advertisers who did invest in YouTube, their strategies go against their traditional MO, which could signal a greater embrace of digital advertising.

YouTube Spending Slowed by a Handful of Advertisers 

In Q1 2023, half of YouTube spending from pharma and medical advertisers ($246mm) came from those promoting products in six categories: hepatitis prescriptions, hemorrhoids over-the-counter (OTC) meds, diabetes prescriptions, dietary supplements, pain management OTC meds, and multiple sclerosis prescriptions.

• Hepatitis prescriptions: ~$66mm 
• Hemorrhoids OTC medications: ~$50mm
• Diabetes prescriptions: ~47mm 
• Dietary supplement: ~$36mm 
• Pain management OTC medications: ~$24mm.
• Multiple Sclerosis prescriptions: ~$23mm.
  

Despite the increase in YouTube ad spend, advertisers for dietary supplements decreased YouTube spending by 90% YoY,  including Ka’Chava and Nucific.As surprising as that may seem, the strategy may have some merit. Despite dropping YouTube from its media mix, Nucific recently celebrated the milestone of selling more than 3mm units of its best-selling product, Bio-X4.

Pharma & Medical Advertisers do the Unexpected

Pharma and medical advertisers have a history of running campaigns built on a foundation of lengthy ads.

It’s a generally accepted practice that most consumers are okay with. According to a recent study, 64% of respondents thought the length of pharmaceutical ads was fair, good, or excellent.

Still, this goes against everything society craves: Nuggets of content.

The popularity of TikTok and Instagram Reels proves that.

So, when it comes to digital advertising, shorter is often better.

Pharma and medical advertisers have historically shunned that best practice, but they may be having a change of heart. 

In Q1, almost 130 companies out of the total 325 invested their YouTube dollars in ads less than 15 seconds, including those promoting hemorrhoids OTC meds, diabetes prescriptions, dietary supplements, pain management OTC meds, and depression prescriptions. 

Meanwhile, more than 130 and 65 companies invested in ads of 16-30 and 31-45 seconds, respectively. Advertisers for diabetes prescriptions, heart attack prevention prescriptions, and cold/cough OTCs who bought 31-45 second YouTube ads in Q1 2022 didn’t return in thus far in 2023.

Finally, just 95 companies, including Botox, invested in ads that eclipsed the one-minute mark.

The pharma and medical advertisers’ embrace of shorter ads could signal that they’re evolving to meet the preferences of today’s digital-first world. This could also open the door to more innovative and future-facing ad types, including OTT and CTV.

Where Besides YouTube? 

Where else are medical and pharma big budgets going?  

Unsurprisingly, traditional ad formats are still getting a lot of love. 

In 2022, pharma advertisers collectively invested over 65% of their budgets in broadcast and cable ads. For these advertisers, traditional formats, namely TV, still offer impressive reach, especially among older consumers. 

The continued investment in traditional ad formats also follows the recent trend of advertisers investing more in these OG formats as they prepare for the final downfall of third-party cookies, increasing digital ad loads, and dwindling trust in some digital formats.

While traditional ads will continue to get plenty of attention from pharma and medical advertisers, the industry’s accelerated shift to digital will push advertisers into the future—a push we already saw taking place in 2022.  

Last year, advertisers for 572 pharma brands spent nearly $1.5b on video ads, with a handful investing only in the format, including Entyvio (Millennium Pharmaceuticals), Gardasil 9 (Merck & Co), Prevnar 20 (Pfizer), Epclusa (Gilead Sciences), and Cibinqo (Pfizer). 

Social media advertising will also be more prominent as younger generations turn to Facebook, Instagram, and Twitter for healthcare information. In fact, a recent study found that 76% of people use social media after a doctor’s visit to ask others about their experiences.

Influencer marketing will likely play a role, too. According to WEGO Health, 51% of patients “mostly” or “completely” trust patient health influencers. At the same time, 85% of patients said they’d be “somewhat” or “very receptive” to an ad from a patient influencer.

YouTube Still Has a Place for Pharma and Medical Advertisers

YouTube’s reach and influence are simply too much for advertisers to ignore. 

As younger healthcare professionals (HCPs) enter the workforce and consumers turn to YouTube for all of their healthcare needs, the platform will remain a key nexus between brands and their target audience. 

For more insights, sign up for MediaRadar’s blog here.

Despite digital advertising’s dominance across industries, pharmaceutical advertisers have overwhelmingly stuck to their traditional roots (pun totally intended). 

But did the acceleration of digital healthcare during the pandemic finally push them into the future? Sort of. 

The Rise of Digital Healthcare Pushes Pharma Advertisers Into the Future

The pharmaceutical industry had no choice but to switch things up when the pandemic took hold many moons ago.

Pharma advertisers didn’t have a choice, either. The healthcare world took the leap into digital and healthcare professionals (HCPs) bid farewell to in-person meetings with sales reps.

That farewell parade will continue, with about 20% of B2B buyers, including those in traditionally dominated industries like pharma, saying they have no intention of returning to in-person sales engagements.

With most HCPs making it clear that digital interactions with pharma companies are here to stay—only 20% of B2B buyers want to return to in-person meetings—pharma advertisers need to find another way to connect. 

Enter video and social media.

The opportunity (and appeal) of video ads

In 2022, advertisers for 572 pharma brands spent just under $1.5b on video ads; a handful of them (74) invested only in the format, including Entyvio (Millennium Pharmaceuticals), Gardasil 9 (Merck & Co), Prevnar 20 (Pfizer), Epclusa (Gilead Sciences), and Cibinqo (Pfizer). 

For advertisers at Pfizer, the video-exclusive strategy to promote Cibinqo came in tandem with the FDA’s approval of the drug, but also the continued expansion of every part of the video universe. 

In 2021, digital video advertising spending was estimated at more than $55b and projected to increase to $78.5b by the end of 2023.

If pharma advertisers are to invest in digital, tried-and-true video formats—think in-stream and in-feed ads—will be the beneficiary. 

Emerging ecosystems, however, like OTT and CTV, are catching their eyes, too, especially given streaming’s now mainstream status. 

In fact, eMarketer predicted that almost 2b people would subscribe to OTT platforms last year—and not just one of them. The average household used almost 7 streaming services in March 2022.

It’s easy to see what’s pulling pharma advertisers through the doors of OTT and CTV, too.
According to a 2022 survey, 39% of respondents cited the extended reach for linear TV campaigns as a CTV and OTT advertising.

With the entirety of the streaming world all-in on ads, including Netflix, pharma advertisers will continue to see OTT and CTV ads as a seamless, natural, and brand-safe extension of their existing TV strategies. 

Pharma advertisers harness the power of people 

Social media in healthcare isn’t new. In fact, 41% of respondents to a 2012 study said the information they found on social media influenced how they coped with a chronic condition, approached diet and exercise, and chose a hospital or physician. 

The pandemic only engrained social media into healthcare and pharma even more, with a more recent study finding that 76% of people use social media after a doctor’s visit to ask others about their experiences with medication, conditions, and diagnoses.

But pharma advertisers aren’t just throwing social media ads blindly across Facebook, Instagram, Twitter, YouTube, and other major platforms. 

They’re tapping into the power influencer marketing. 

Historically tied to B2C brands, influencer marketing has been spreading its wings and offering its powers to advertisers in other industries, including pharma.

For the first time, pharma advertisers are opening their eyes to the benefits of influencer marketing and its sway over younger generations who’ve made it clear that influencers are their jam—even for health-related advice. 

A further study drilled this point home. 

According to WEGO Health, 51% of patients “mostly” or “completely” trust patient health influencers, while 85% said they’d be “somewhat” or “very receptive” to an ad from a patient influencer promoting a drug related to the patient’s condition. 

As social networks roll out the red carpet for influencers and creators—Instagram recently extended access to parts of its creator marketplace via API—it’s hard to imagine a world in which pharma advertisers don’t continue harnessing the power of people.

Old-school Pharma Ads Still Work

Despite the rise of digital health and a slow-but-steady embrace of advertising, most pharma advertising dollars are still dedicated to traditional formats.

In 2022, more than 65% of pharma ad spend went to broadcast and cable ads, while another 9% went to magazines. 

Why? Two reasons:

• Traditional formats, especially TV, still reach the vast majority of society, with more than 5.4b people watching TV in 2022. Many of these people fall into older generations and weren’t raised by the likes of Netflix and Hulu. In fact, baby boomers are the only generation that watches cable TV in significant numbers. For pharma advertisers, TV still offers a straight line between them and their target audience. 
• Traditional ads have a level of trust digital advertising can’t replicate; it’s why we’re seeing third-party cookies go away and one of the biggest reasons traditional ads is back in vogue.
  

While digital formats offer an appealing option and will continue to be a magnet for pharma ad dollars, traditional formats still work and they’ll only grow stronger as the lines between them and digital ads merge—think Coinbase’s Super Bowl ads and programmatic TV advertising.

Blending the Old and New

Nick Cowling, Head of Performance at marketing agency Three Whiskey, suggests that “brands [will] continue to evolve their understanding of what omnichannel means in the pharma world.”

“For most, in reality, this means embracing a hybrid model of multi or omnichannel marketing that makes the most of what’s possible now, while building towards a better future that takes advantage of the increased volume of healthcare data available,” he explained. “This is also thanks to ubiquitous industry digitalization and integrating privacy-preserving technology solutions to serve for a cookie-less future.”

In 2023, that’ll mean a thoughtful mix of old and new. But if the pandemic taught pharma advertisers anything it’s that the digital ads are no longer a “nice to have.” The healthcare world has gone digital and there’s never been a better time for advertisers to embrace that. 

For more insights, sign up for MediaRadar’s blog here.

Isaac Newton discovering gravity. 

The Continental Congress adopting the Declaration of Independence.

What do all of these events have in common? 

They happened after Friedrich Jacob Merck took control of the Engel-Apotheke, which would eventually become one of the world’s biggest pharmaceutical companies. 

If that name doesn’t ring a bell, maybe its current one does: Merck. 

Yes, that Merck—the same one that reported $48.7b in sales last year. 

In the more than 4 centuries since Merck’s inception, it’s seen a thing or two—including the evolution of pharmaceutical advertising. 

Unfortunately, we can’t travel back in time and witness this evolution, but we can see how pharma companies spent their ad dollars last year. 

Here’s what you need to know about how pharma companies—new and old—spent their ad dollars in 2021. 

Pharma Advertising in 2021: Spending Stalls

After spending increased by 32% YoY in 2018, it’s come to a halt. 

In 2019, pharma ad spending increased by 2% YoY, driven primarily by a 6% boost in TV buys. 

In 2020, spending was flat, despite a siloed boost to digital, which increased by 74% YoY as consumer buying habits changed during the pandemic. 

In 2021, spending went up by 1%.

While declining or stabilizing ad spending typically indicates that trouble’s brewing—struggling companies usually don’t have the fund to spend on advertising—in this case, it points to the immunity of pharma advertisers, especially when considering the pre-pandemic increase in spending. 

In 2021, the top-spending categories accounted for 43% of all spending.

Diabetes is number one, accounting for 12% of total spending, followed by Psoriasis (10%), Arthritis (9%), HIV/AIDS (6%) and Breast Cancer (6%). 

TV was the media of choice for advertisers in these categories, with Diabetes holding the top spot. 

Digital spending lagged considerably, although the HIV/AIDS category increased its digital spending to 28% (others allocated between 5% and 16% to digital).

A Closer Look at Pharma Ad Spending in 2021

Despite relatively little to write home about in terms of overall growth in spending, there’s plenty worth noting if we look a little closer.

There are more advertisers than ever

It would make sense that the sluggish spending would also come with a similar trend in the number of pharma companies buying ads. 

But that’s not what happened.

In 2021, the number of pharma companies buying ads for different prescription drugs increased by 17% and 15%, respectively. 

A big part of that had to do with the fact that 48 new companies jumped on the advertising bandwagon (more on them in a bit). 

The increase in the number of advertisers and ads is easy to understand. 

The FDA approved 50 new prescription drugs last year.

But why didn’t spending follow suit? 

It likely has to do with two factors: 

Even though the pandemic didn’t lead to a mass exodus, many likely adopted a more reserved approach to buying pharmaceutical drugs. 

The new entrants may also have been ramping up spending as they determined if their drugs took hold in the market, similar to how a startup dips their toes gradually when entering a new industry.

New advertisers in 2021

In 2021, 50 new prescription drugs came on the market. 

Yet, only five accounted for 75% of the nearly $135mm spent, including Cabenuva (HIV/AIDS), Verquvo (Cardiovascular), Xolair (CSU) (Allergy), Orgovyx (Cancer) and Ponvory (Multiple Sclerosis).

Of these new entrants, there were a couple of interesting insights. 

For starters, Cabenuva was the only one that bought TV spots. 

Those ads came in Q4 when it spent more than $1mm on spots on ABC, A&E, CBS, CNN, Fox, NBC and the USA, accounting for 75% of the total TV spend. 

Meanwhile, Verquvo and Xolair invested in print ads. 

More than a third of Verquvo’s print ads ended up in Better Homes, 14% in Southern Living, 12% in Woman’s Day and 9% in The New England Journal of Medicine. 

The remaining (8% or less) went to Country Living, Popular Mechanics, TV Guide, Cardiology Today, The American Journal of Managed Care and The American Medical Association. 

Xolair dedicated 30% of its print ad spend to Better Homes & Gardens, 27% to People, 9% to Women’s Health, 7% to Country Living and the remaining were 6% or less and included Us Weekly, Southern Living, Time, InStyle and Allure. 

Finally, Orgovyx and Ponvory were the two that invested anything substantial in digital, allocating 84% and 92%, respectively, to digital ads. 

The contrasting behaviors could have something to do with the companies manufacturing them (Sumitovant Biopharma and Johnson & Johnson) and their willingness to veer from the age-old approach of investing the bulk of ad dollars in print and other traditional formats. 

Those commercials aren’t going away

It’s 2022 and most advertisers are shifting their ad dollars to digital. 

Surprisingly (or unsurprisingly), pharma advertisers aren’t following the leader. 

Instead, most of them are sticking to what they know best: TV spots. 

In 2021, TV spots accounted for more than 70% of total spending, increasing by 3% YoY from 2020. 

That said, spending on print ads decreased by 22% YoY due mainly to a decrease in ad buys in People Magazine (down by 44%), Good Housekeeping (down by 25%) and Health (down by 21%). 

The only print publications in the top 5 that saw an increase in spending were The New England Journal of Medicine (increased by 22%) and Better Homes & Gardens (increased by 4%). 

The increase to The New England Journal of Medicine could signal a greater shift from industry advertisers to focus more on healthcare professionals (HCPs) instead of consumers. 

Overall, the shift away from print is undoubtedly a result of the rise of telehealth during the pandemic as more opted for digital interactions with HCPs instead of face-to-face ones at the office—the same offices that littered the waiting rooms with magazines. 

Digital ads are (slowly) becoming popular

While it’s impossible to ignore pharma advertisers’ adoration for TV, our data shows that many of them are finally experimenting with digital. 

In 2021, digital ad buys increased by 60% YoY. 

The number of prescription drugs advertising digitally increased by 19% YoY. 

Looking specifically at how these advertisers spent on digital, we see that video increased by 32% YoY, with 99.5% going to YouTube. 

Meanwhile, digital display saw a 59% increase in 2021, which took total spending beyond $378mm as Abbie and Sanofi SA increased their spending on display by 138% and 330%, respectively. 

Still, digital accounts for just a fraction of spending and will take years to even remotely catch up. 

But, it is a start and should continue to rise as telehealth takes hold and more digital-first HCPs enter the workforce. 

For now, expect most pharma advertisers to stay the course and stick to what they know. 

At the same time, this presents an opportunity to more forward-facing advertisers to start building out a digital strategy that’ll unquestionably become the foundation of their approach for years to come.

For more insights like this, sign up for our blog.

Understandably, a lot has changed through it all. 

Dining rooms became home offices. 

Online shopping accelerated faster than anyone thought possible. 

Mental health got the spotlight it deserved. 

However, what didn’t change was how much pharma companies were willing to spend on ads promoting prescription drugs. 

After increasing by 32% YoY in 2018, prescription drug ad spending stood relatively still, despite more companies buying ads. 

In 2021, the number of pharma companies investing in ads increased by 17% YoY, while the number of drugs they advertised rose by 15% during the same period.

Given these companies’ relatively unchanged spending habits, one may think there’s nothing significant to highlight. 

That’s not the case. 

While the overall industry has had a rather uneventful few years in terms of how it approaches its advertising, some intriguing tales emerge if we dive below the surface. 

One of those tales involves how pharma companies are spending to promote drugs used to treat HIV and AIDS, which accounted for 6% of the total ad spend dedicated to prescription drugs in 2021. 

(Other top spending categories include Diabetes, Psoriasis, Arthritis and Breast Cancer. Pharma companies combined to spend more than $2.7b on ads to promote prescription drugs.)

HIV/AIDS Drug Advertising in 2021

In 2021, HIV/AIDS prescription drug ad buys remained relatively stable, increasing by just 2% YoY. 

Yet while total spending didn’t change much in 2021 compared to 2020, we see a different story in Q4 where there was a significant increase in spending. 

In the last 3 months of the year, ad buys for HIV/AIDS drugs increased by 78% YoY. 

Helping drive this increase was Cabenuva (GlaxoSmithKline or GSK), which the FDA approved in January 2021. 

GSK spent all of its ad dollars in Q4 2021, buying ads on ABC, A&E, CBS, CNN, Fox, NBC, and the USA network, all of which were more than $1mm and accounted for 75% of every penny the company spent on TV ads.

A two-company race: Gilead Sciences and GSK account for nearly 100% of spending

The spend allocated to HIV/AIDs prescription drug ads comes almost entirely from Gilead Sciences and GlaxoSmithKline (GSK), with the industry giants accounting for nearly 100% of the ads. 

Despite nearly every penny coming from only two companies, HIV/AIDS prescription drug ads had the highest percentage of digital spending, accounting for 28% of digital ad buys used to promote drugs to treat any condition. 

For reference, the other conditions we looked at, including Diabetes, Psoriasis, Arthritis and ​​Breast Cancer, ranged from between 5% and 16% of total digital spending.

When we look at how these two companies are spending, we see that they’re fighting for market share differently. 

For starters, Gilead and GSK both invest in TV spots; however, Gilead decreased its investment by 45%, while GSK upped its by 22% YoY. (TV accounted for 66% of spending in 2021 after accounting for 83% in 2020.)

The drop from Gilead is likely the result of the company’s increase in digital spending, which increased by 147% YoY. 

However, the fact that GSK increased its spending on digital by almost 400% YoY doesn’t support that. 

It could mean that GSK has a bigger budget and could increase spending across the board, whereas Gilead had to offset the increase in digital with a decrease in TV. 

The opposing strategies continued when we looked at how they spent on print ads.

Gilead decreased its spending on print by 16%. 

Combine this drop with a similar one to TV buys and it’s clear that the company is shifting its advertising strategy to include more digital tactics. 

Meanwhile, GSK increased its spending on print ads by 105%, with the majority of its dollars—89%—going to 10 publications, including The New England Journal of Medicine (28%) and The Journal of the American Medical Association (17%).

Everyone, meet digital advertising

There’s no denying that pharma companies have historically been hesitant about digital advertising and more comfortable sticking to traditional tactics.

That’s beginning to change. 

The majority of the digital spending went to video. 

In 2021, video ad spending increased by 189% YoY, accounting for 88% of the digital dollars allocated to HIV/AIDS ads. 

Gilead and GSK, in particular, increased their investment in video ads by 191% and 44%, respectively.

Unsurprisingly, spending on YouTube was up considerably. 

In Q4 of 2021, Gilead increased its YouTube ad spend by 750% YoY. 

In August 2021, Gilead began investing at least 93% of its video ad buys with YouTube. 

In Q4, that number jumped to 97%. 

This increase is worth noting due to the fact that in January of the same year, YouTube accounted for just 54% of the company’s video ad investment. 

When looking at how these companies spent their YouTube ad dollars, most went to content on channels related to Music (25%) and Society & Culture (20%). 

Meanwhile, Beauty channels received 11% of spending, Comedy got 9%, while Gaming and Entertainment & Movies both got 8%. 

The remaining dollars went to Lifestyle channels (3%) and Others (.9%).

Despite the growth across the board in digital ads, Facebook didn’t receive much love. 

In 2020, spending declined by over half of the 2020 investment (54%). 

Looking Toward the Future of Pharma Ad Spending

No one can fault the pharma industry for shying away from digital advertising tactics in the past. 

The strict privacy regulations in healthcare, coupled with the historically lax ones in digital advertising, made for a risky recipe no one wanted to experiment with. 

Still, there was bound to come a time when the performance benefits and cost-efficiency of digital advertising outweighed the concerns.

It looks like we’re getting there (or at least getting close). 

While pharma companies are still holding on to their traditional ways of promoting HIV/AIDS prescription drugs, the recent uptick in digital spending is undoubtedly a sign of what’s to come. 

Will digital ever surpass traditional as the preferred avenue for ad dollars? 

It could, but that’s years away. 

That said, as pharma companies realize the power of digital advertising–especially as the healthcare world becomes even more digital and the Internet adopts a more privacy-first approach–there’s no question digital ads will encroach on traditional advertising’s once hallowed ground.

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Pharmaceutical companies are highly regulated but that didn’t stop them from spending $6.58 billion on advertising last year across B2B and B2C sectors. 

Here’s a check-in of the latest trends and spending taking place in the pharmaceutical category. 

Where are Pharma Budgets Going?

1. Search Dominates Digital Channels

As we’ll see in the data below, print is still a big channel for pharma companies, but even the most regulated of industries needs to spend big on digital. 

Google receives about 1 billion health-related searches daily, about 7% of its searches. With this massive amount of intent data, it only makes sense that pharmaceutical companies invest heavily in programmatic ads using Google and Bing.

When comparing digital channels, more pharmaceutical advertisers bought Google SEM than any other social, display or programmatic network in the second half of 2020. 

Though Google currently has the most advertisers, social channels are growing quicker. 

2.  Pharmaceutical Companies Become More Social

Advertisers at large are expected to spend $15 billion on influencer marketing by 2022—and pharmaceutical companies will play a big part in that. 

Though they have to be more careful than the latest retail brand, influencers will be able to offer that ‘peer-to-peer’ advice that traditional pharma ads don’t convey. 

In the last six months of 2020, eight new large pharma companies transformed their social strategy by placing both branded and unbranded Facebook and Instagram Stories ads. Companies like Novartis, AstraZeneca and Merck are expanding beyond conventional buys in order to reach younger generations where they are at.

Jessica Botting, director of social media at leading life sciences marketing agency Klick Health told AdAge, “The most important thing is understanding patients’ journeys to their core, and evaluating how your brand can make meaningful connections at each stage of the journey.”

It’s not just where the ads are being placed—the creative is changing too. Pharmaceutical companies are taking on a much more “familiar” or “human” tone in the pandemic. 

The pandemic has brought on a huge potential for rebranding or building new campaigns for many, with a focus on how science can help people in their health journeys. (See Bristol Myers Squibb’s new ‘transformation’ campaign.)

3. DOOH 

Out-of-home advertising is having a comeback with digital options now available. 

According to Ciara Dundon, Associate Media Director at Greater Than One, consumer healthcare OOH advertising increased 777% between 2016 and 2018, and that number is only likely to rise as digital options become more advanced. 

DOOH allows pharmaceutical companies to target buyers based on demographics, behavior and intent. Digital billboards grab more attention as they change regularly and allow for a creative range of content. 

4. Consumer marketing outpaces B2B

According to MediaRadar data, there have been 2.2 thousand pharmaceutical companies advertising in B2B publications across print and digital formats, spending $693mm this year so far. 

Comparatively, in the consumer market, 3.9 thousand companies have spent $3.2 billion across print and digital formats.

With Search and Social being two of the biggest channels, we analyzed programmatic ad spend across B2B and B2C.

Including Facebook, programmatic ad spend in the consumer pharmaceutical space adds up to $564.6mm (from January 2020 – August 2021.) 

Even though digital is huge for pharmaceutical companies, print is still a huge investment. 

Pharmaceutical companies spent $1.6 billion in print advertising from January 2020 – August 2021. Only $300 million of this was in the B2B space.

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy. 

As more people quit smoking, cigarette producers are shifting their strategies. 

Philip Morris, owner of six of the world’s 15 top cigarette brands including Marlboro, is now changing course and pursuing a “smoke-free future.” In doing so, it is investing heavily in healthcare alternatives and respirable pharmaceuticals.

‘Mad Men’ era smoking is gone and not coming back

The most recent CDC data found that 14% of Americans were regular smokers in 2019. But a recent Gallup poll found that though this percentage has remained steady, 72% of smokers would like to give it up. 

Surprise: This is a far cry from the height of cigarette smoking in the 1950’s, where nearly half of Americans smoked. 

A big cause of the decline of smoking was the banning of cigarette promotion on TV in the 1970’s and the rise of anti-smoking campaigns. 

The biggest recent change in the industry took place earlier this summer when Philip Morris announced they would be going after a “smoke-free future.” Philip Morris currently brings in nearly a third of its revenue from smoke alternatives. It aims to boost this to 50% by 2025. 

As it moves towards its “smoke-free future,” the company is heavily investing dollars in alternative health R&D and inhalable healthcare acquisitions. 

It recently bought OtiTopic, developer of a inhalable heart attack drug and 22.6% of shares of respiratory drug developer Vectura. 

As it moves into new sectors, it will be a large account to keep watching. Moving into advertising for inhalable pharmaceuticals will allow Philip Morris to advertise new products on television. Meanwhile, their cigarette brands will be promoted via print and perhaps digital.

MediaRadar Insights

With one of the biggest players in the tobacco industry making new moves, what do the overall cigarettes and inhalable pharmaceuticals landscapes look like?

In 2021 there have been 29 cigarette advertisers spending $36.6 million so far, which is up 141% from 2019. (When comparing it to the slump of 2020, spending is up 270%.)

Where most industries have started increasing their digital advertising, this has not been the case for cigarettes. 

96% of ad spending in 2021 by cigarette companies has been invested in print.

And looking at inhalable pharmaceuticals, we found that asthma prescription drugs stood out as a growing sector. This category invested $152.9 million so far this year. This is up 128% from 2020 where the category invested $67.1 million across print, TV and digital formats.

Cigarette brands are spending more—but the number of American smokers is remaining steady. Asthma prescription drugs are advertising more at the same time. Which brands will be a prime prospect? 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.

“Moderna.”

“Oh, cool, I got Pfizer.” 

Consumers now talk about pharmaceutical companies just as casually as they talk about the weather. Prior to the pandemic, most consumers didn’t even know that Johnson & Johnson produced pharmaceutical drugs in addition to baby products.

With 60% of the adult population in the U.S. fully vaccinated, we are well familiar with the names of the three companies offering vaccines.

These companies have brought in significant revenue over the past year. But they haven’t had to advertise the vaccines that they sell. For the most part, the CDC and the Ad Council efforts were responsible for public health communication.

But that doesn’t mean that Moderna, Pfizer and J&J aren’t advertising. How much are they spending and what drugs are they promoting?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

The push for more vaccinations means revenue 

U.S. political leaders and public health officials have been trying to encourage the remaining eligible Americans to receive their shots for months. Now, we’re now seeing a transition from incentives to requirements. 

President Biden announced that federal workers and contractors would be required to get vaccinated or be routinely tested and wear masks while working. This is likely to lead to businesses following suit. 

According to the U.S. Equal Employment Opportunity Commission, businesses can require employees to be vaccinated with exceptions being granted for religious and medical reasons. The Justice Department has also clarified in a memo that this includes vaccines only approved for emergency purposes. 

As the government and businesses begin to require vaccinations, along with the spread of more contagious variants, the pharmaceutical companies’ sales are expected to increase. 

Pfizer is projecting $33.5 billion in revenue from vaccine sales this year. If sales stay on pace, they will outsell some of the top selling drugs, including AbbVie’s Humira immunosuppressive therapy and Merck’s cancer fighter Keytruda.

Moderna reported $1.7 billion in revenue in the first quarter of 2021 from vaccine sales, which marked the company’s first profit-ever quarterly profit.

Johnson & Johnson, which has promised not to take a profit from sales, estimates that it will sell $2.5 billion worth of vaccines this year. 

While these companies are on track to generate significant revenue, their ad spend is not focused on vaccinations. 

Instead it has been the Ad Council coordinating public service announcements.

The Ad Council brought together more than 300 brands, community leaders, media companies, medical experts and other trusted sources to collaborate on its “It’s Up to You” campaign. With more than $52 million worth of donations, this public health push is its largest yet. 

Pfizer was the only company to specifically advertise and generate content promoting the Covid-19 vaccine. While Pfizer arguably came out on top when it came to vaccine branding, they’re dedicated ad spend towards the vaccine was only a sliver of overall spending. 

MediaRadar Insights

When we look at the big picture, these three companies have spent $328 million on advertising this year so far, up 8% from the same period in 2020.

As mentioned, Pfizer is the only one of the three that has specifically advertised the Covid-19 vaccine. But its ad spending on the vaccine isn’t huge. Last month (July 2021), Pfizer created a small digital campaign. The spend accounted for less than 1% of all ad spending in July (projected to be about $75.3 million).

Instead of promoting the vaccine, these companies are focused on promoting their Psoriasis, Arthritis, Blood Clot and Breast Cancer prescription drugs. 

In terms of formats, these companies moved investments from television and print into digital advertising. 

In 2020, this group spent $65.8 million in digital advertising. This increased by 40% this year. In 2021 so far, they’ve spent $92.1 million. In comparison, print and tv ad spend fell by 16% and 12% respectively.

Pharmacies

In addition to the Ad Council and Pfizer, pharmacies also promoted vaccine distribution.

Walgreens, CVS, Rite-Aid, and Walmart pharmacies are the top spenders this year, investing $117mm into print, television and digital campaigns. Their spend makes up 79% of all spend from pharmacies and drug stores, which totals $147mm in 2021 (January – July).

Pharmacy total spend in 2020 over the same period (January – July) totaled $225mm.

Since April (when the vaccine was available to the general public), some related creative appeared from these retailers:

• CVS had their #OneStepCloser TV campaign
• Walgreens used digital advertising to invite consumers to sign up for their rewards program so that they could receive updates about Covid statistics in their area.
• Rite-Aid asked medical professionals to “become a home-town hero” to help administer the vaccine in their communities.

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And despite a complicated history of regulations, the pharmaceutical industry needed to shift ad dollars into digital during the pandemic. 

How much is direct-to-consumer pharma spending, and which brands are spending the most?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

Though Slower Than Others, Direct-to-Consumer Pharmaceutical Shifts to Digital 

The role of direct-to-consumer advertising (DTCA) in the pharmaceutical industry has a long history of being controversial. 

Advocates argue that honest and balanced DTCA educates consumers and empowers individuals to have more control over their health.

Opponents claim that advertisements can undermine the doctor-patient relationship, as patients become less confident in their doctors’ clinical judgement. Individuals tend to underestimate generic drugs compared to branded ones. 

Because of its critical role in consumer health, pharmaceutical advertisements are heavily regulated under the FDA. “Much of our compliance and enforcement activity is spent trying to ensure that companies don’t low-ball risks in the ad and provide inflated expectations of benefit,” says Janet Woodcock, M.D., deputy FDA commissioner for operations.

Because of regulations, the pharmaceutical industry is typically slow to change. But the pandemic pushed pharmaceutical companies to increase their digital spend. Pharmaceutical reps weren’t (and still aren’t) allowed into hospitals with COVID-19 protocols in place, so communication between physicians and pharmaceutical companies had to go digital. Though this change is more evident in the B2B space, it can also be seen in DTCA. 

A significant portion of these dollars were spent on COVID education campaigns, but analysts predict that the shift to digital will continue after the nation is vaccinated and messaging changes. 

MediaRadar Insights

Pharmacies

Due to strict regulations around messaging, the industry tends to move much slower than others. It doesn’t seem that the pandemic changed that tradition. 

Overall ad spend from pharmacies increased just 1% between 2020 and 2019. The shift away from print advertising (down 40%) was buffered by the increase in digital (up 306%) and television (up 29%). 

Pharmaceutical industry predictions suggest that though digital ad spend is a small portion of total ad spend (12% in 2020), the shift towards digital advertising will continue to gain traction.

The biggest shift we see in pharmacy ad spend is the 70% overall drop from 2018 to 2019. For context, the meteoric ad spend in 2018 was not predicted to return in 2019 due to CVS’s merger with Aetna (October 2018), Cigna’s acquisition of Express Scripts (September 2018), and Amazon’s purchase of PillPack (June 2018).

CVS is the clear frontrunner in pharmacy ad spend. (Note: CVS operates the pharmacies in Target, explaining the tiny Target spend). 

Walmart didn’t start to become competitive in ad spend until 2021. But their January and February ad spend outpaced Walgreens who typically comes behind CVS in spending.

Pharmaceuticals

Oncology and Diabetes Prescription Drugs

In January and February 2021, cancer prescription drugs spent $104mm across TV (72%), print (24%), and digital (4%). Overall, this is up 57% over January and February of 2020. 

Advertisers with the largest amount of digital spend include: 

• Keytruda (lung cancer)
• Braftovi (skin cancer)
• Ibrance (breast cancer)
• Orgovyx (prostate cancer)

Their digital spend in January and February 2021 accounts for 57% of all digital spend (within the pharmaceutical category).

Diabetes prescription drugs 

Diabetes prescription drug spend ad spend is up 55% in January and February 2021 YoY, at $142.87mm compared to $92.16mm in January and February 2020. Digital spend is up 737% from 2020, where there was less than $1mm spent over the first two months of the year.

Advertisers with the largest amount of digital spend include: 

• Trulicity
• Korlym
• Jardiance

Trulicity accounted for 28% ($40mm) of all ad spend in January – February 2021.

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Pharmaceutical brands and their ad tech partners were challenged to find new ways to reach buyers. As the industry went through a digital transformation, so did its advertising.  

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

AI-powered ad intelligence for medicine ramps up

The health industry has traditionally been slow to adopt new, digital technology because of strict regulations. However, COVID-19 forced the industry to lean into new tools in order to facilitate sales and patient engagement. 

Talking Medicines recently released an AI-powered social intelligence tool, PatientMeRx. The ad intelligence platform gathers the comments of customers across social media, blogs, and forums, and connects the conversations to a curated database of over 130,000 regulated global medicines. It processes the data to give pharmaceutical companies feedback on the medicines. 

“The pharmaceutical sector spends $30Bn on marketing each year in the US alone without really knowing if that investment is doing any good,” said Jo Halliday, CEO of Talking Medicines. “What we’re able to do with PatientMetRx is de-risk social data collection for pharma by offering arm’s length and agile data collection from wherever the patient is speaking and decoding it to align to medicines.”

Even though social listening has been used for many years across other industries, this type of tool is the first of its kind in the medical field.

Likewise, Xandr just announced a partnership with Lasso, as they develop a joint platform. The new platform allows pharma companies a way to efficiently market individual brands in the digital space.

“When we looked at the ecosystem, we saw that it was riddled with fragmentation, legacy technology, and companies taking outrageous margins,” reported Mike DiNorscio, Co-Founder and Chief Revenue Officer of Lasso. “We’re here to change that. From RFP to ROI measurement, Lasso gives marketers every tool they need to do their job smarter, cut costs, and drive meaningful results, all within a single platform.”

He noted that with Xandr’s history of powerful technology, they can create a more clear and efficient media supply chain. 

MediaRadar Insights

MediaRadar data reflects how strong the digital push is in the pharma space. 

In 2021 so far, pharmaceutical spend in the B2B space is up 41% overall. This is heavily influenced by digital ad spend which increased 242% YoY (January-February 2020 vs 2021).

While the spend increased significantly, the number of brands remained flat YoY. 

Meanwhile, print publications in the B2B space weren’t circulating in their usual way in 2020— negatively impacting the spend in this format. Print ad spend in the B2B space was down 11% YoY overall in 2020, which is an improvement from its lowest point (down 33% YoY in Q2 of 2020). 

Print is still down this January and February by 23% ($10mm). It’s typical of pharma companies to buy less early in the year, but this decrease is likely caused by the increasing popularity of digital ad spend in the B2B space.

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We see this with the lack of masks, protective equipment, ventilators and testing. 

While shortages and major supply chain disruptions directly related to coronavirus are eating up headlines, other non-essential health industries are being put on hold. 

What does this mean for medical and pharmaceutical company advertising? Here is what MediaRadar data has to tell. 

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Coronavirus creates a medical scramble

The B2B healthcare industry is incredibly complex on a normal day and these days are anything but normal.

There is a race between governments and companies to make masks, as profiteers price gouge supplies. 

“From a healthcare supply and manufacturing perspective, the impact is immediate throughout the entire supply chain,” says an experienced B2B digital healthcare executive Justin Racine. From manufacturing to distribution to sales, the impact is felt throughout the whole lineup. 

This is why we see new developments like Alibaba’s new eCommerce portal that connects medical suppliers directly with hospitals. 

It is still unclear how massive and long-term these disruptions will be. Big pharmaceutical companies are warning that coronavirus will impact its supplies and sales in major ways. 

In the midst of all the confusion, MediaRadar took a look at the advertising data to see if there have been any major shifts in spending.

MediaRadar Insights on B2B Healthcare Advertising Spend

When we look at the immediate impact of COVID-19 on B2B ad spending from the medical and pharmaceutical industry, we see no significant immediate shift in spending. 

In February, medical and pharmaceutical companies spent $24M on advertising. In March, that number was down to $23M. 

The biggest shifts in spending were within the different health sub-categories. 

Some categories were up month-over-month like:

• Flu Drugs +31%
• Asthma Drugs +13%
• Vitamins +144%

Others were down:

• Medical Devices -19% 
• Medical Supply -47%
• Surgical Device -22%

There was some fallout from non-essential medical procedures. For instance, with much of dentistry on hold, we saw categories either drop or stop their B2B advertising in March. 

When we narrow in on dental sub-categories, we see the following spending changes:

• Dental products were down 66%
• Dental equipment was down 25% 
• Braces were down 78%

When we look at individual companies, 4 of the top 5 medical advertisers increased their B2B marketing month-over-month:

• J&J
• Pfizer
• Amgen
• GlaxoSmithKline

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.