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Advertising spending in 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.
This year, eMarketer has taken a deeper dive into paid digital spending to determine how much marketers in vertical industries are investing in ad tactics primarily focused on obtaining sales or leads vs. those designed to drive favorable opinion about a brand. We estimate 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.
As one of the most conservative business segments when it comes to digital advertising, the US healthcare and pharmaceutical industry invested $1.10 billion in paid online and mobile media in 2012 and will spend an estimated $1.18 billion this year. This figure will grow to $1.47 billion by 2017. Between 2012 and 2017, industry spending will see only 5.9% compound annual growth, the lowest among individual industries tracked by eMarketer.
As patents for blockbuster drugs continue to expire in unprecedented numbers, pharma marketers are reducing overall advertising spending. They are shifting media buys from mass-audience broadcast and print channels to more targeted, smaller-scale online and mobile venues in an effort to create more personal, one-to-one connections with desired audiences, including both healthcare professionals and consumers. And while industry executives are optimistic that this “smaller” digital marketing can both lower marketing costs and increase return on investment (ROI), significant obstacles and uncertainty remain. In short, though they have begun to “talk the talk,” they have yet to fully “walk the walk.”
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