Search accounted for 48% of the online ad spend and display-related advertising accounted for 33% (Display-related advertising includes Display/Banner Ads, Rich Media, Digital Video, and Sponsorship).
Here's the data comparing the total online ad spending by major industry category:
Online ad spending by "Pharma & Healthcare" increased by 50% (from 4% of the total to 6% of the total). Keep in mind that not all of this is specifically spending by the Rx drug industry because the category includes "pharmaceutical products, facilities, services, researchers, and biological products. Also comprises establishments providing healthcare and social assistance for individuals as well as personal care, toiletries, and cosmetic products."
6% of $17.0 billion is $1.02 billion. That could pan out to be more than $2 billion for the entire year -- again, not all of that will be spent by the Rx drug industry.
eMarketer has predicted that online ad spending by the health industry in 2012 will be $1.58 billion (see "Bogus Predictions of Pharma Industry Online Ad Spending"), which is significantly different than the IAB guesstimate 0f $2.04 billion based on the data for the first 6 months.
Why the difference? It could be that eMarketer is measuring something different. However, its 2011 number of $1.28 billion is virtually the same as what IAB said the healthcare industry spent online in 2011 (4% of $31.7 billion equals $1.27 billion).
$1.58 billion, $2.04 billion -- whatever. Pharma's share of that ad spend is probably 50% or $0.8 to $1.0 billion. Taking out the 48% attributed to search, we get $0.38 to $0.48 billion spent on other types of online advertising. This compares to about $4 billion pharma spends on all direct-to-consumer (DTC) advertising -- a number that does not include the online spending of any sort. In other words, online ad spending by pharma is still insignificant compared to offline ad spending.
While I have seen some pharma clients shift more to online it's usually because online is less expensive than TV and print and right now there is a fierce debate within biopharma about the value of TV when it comes to ROI.
ReplyDeleteI am still amazed at the amount of money that pharma wastes on search marketing. Google has changed the way sites are indexed organically but pharma still is buying huge sections of keywords without understanding where or how that money is impacting business.
Finally remember that a lot of pharma companies get bundled online ad space with other purchases. It's hard to price these out because they are included with other ad space buys.
Wanted to note here that eMarketer last year redefined its healthcare and pharmaceutical industry category to remove things such as "toiletries and cosmetic products" that IAB has often included in its health/pharma industry definition. eMarketer reclassified these products and they are now part of its CPG industry (as it is now defined). We also adjusted the ad spending forecasts for both industries accordingly. We wanted to better align health/pharma product categories with those that behave similarly -- and to more accurately predict spending and trends in this heavily regulated industry -- without the "noise" from products that are sold through different channels and are not subject to the same regulatory constraints.
ReplyDeleteI am wondering if you have any insights on today's spend by ad format. I love the pie charts you have and would love an updated look into the digital creative ad units pharma is spending in nowadays!
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