Can Digital Ad Spend in the US Healthcare and Pharma Industry Catch Up? - eMarketer

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Can Digital Ad Spend in the US Healthcare and Pharma Industry Catch Up?

Healthcare and pharma industry to represent just 2.8% of total digital ad spend this year

May 26, 2015

Though the bulk of total US healthcare and pharmaceutical advertising investment still remains firmly rooted in TV and print, digital advertising is slowly but steadily becoming integral to the media mix and complementary to traditional media. eMarketer forecasts that marketers in this industry will spend $1.64 billion on paid online and mobile advertising in 2015, up from $1.43 billion in 2014. This spending will rise to $2.55 billion by 2019, according to a new eMarketer report, “The US Healthcare and Pharma Industry 2015: Digital Ad Spending Forecast and Trends,” part of our new report series, “Digital Ad Spending Benchmarks by Industry.”

US Healthcare & Pharma Industry Digital Ad Spending, 2013-2019 (billions, % of total digital ad spending and % change)

Overall, spending in this industry—which eMarketer defines to include marketers of prescription (Rx) and over-the-counter (OTC) remedies, healthcare professionals, hospitals and other establishments providing healthcare services, health insurance and social assistance for individuals—is low, both in comparison with other industries and in terms of total ad dollars spent within the industry. Dramatic growth also remains challenging. Despite a compound annual growth rate of 12.4% between 2014 and 2019, industry investment in online and mobile channels will make up just 2.8% of total digital ad spending by all industries this year.

Digital investments—especially by pharmaceutical companies—remain tempered by heavy regulation, privacy concerns and entrenched resistance to change. This is in stark contrast to other less-regulated industries that have positioned themselves to exploit new advertising technologies, including social media, programmatic buying tools and data targeting.

Still, higher levels of digital spending are inevitable. Not only are consumers and healthcare providers spending more of their time online and on mobile devices, but the US healthcare system is in the midst of major transformation, wrought by an aging population, new Affordable Care Act-driven models of care and technological advances, such as electronic health records, telemedicine and remote medical monitoring.

US Healthcare & Pharma Industry Digital Ad Spending, by Objective, 2015 (billions and % of total)

In 2015, eMarketer expects US healthcare and pharma marketers to invest 56% of their digital advertising dollars on ads that are meant to drive a direct response, and 44% on ads that have a branding-based objective.

eMarketer forecasts that healthcare and pharma advertisers will spend $656.5 million in paid mobile advertising in 2015. Spending on ads that appear on mobile platforms—including search, display and in-app executions—will account for 40% of total digital spending, up from 26.5% in 2014.

eMarketer’s forecasts and estimates are based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies. Data is weighted based on methodology and soundness. Each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of available data means the forecasts reflect the latest business developments, technology trends and economic changes.

Download the executive summary of the report here.

eMarketer corporate subscription clients can view the full report here.


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