Tuesday, June 26, 2012

Bogus Predictions of Pharma Industry Online Ad Spending

Here's a headline, versions of which I have been seeing for years: "Pharmaceutical Advertising Spending Shifts to Digital." That's how Business 2 Community -- "an independent online community focused on sharing the latest news surrounding Social Media, Marketing, Branding, Public Relations & much more" -- describes the latest data from eMarketer, which predicts that "pharmaceutical" online marketing will increase by a staggering 23.3% in 2012 vs. 2011 (see here and chart below).

First, eMarketer's data are not specifically focused on the pharmaceutical industry. The data includes ALL healthcare industries, including doctors, hospitals and "other entities that deliver health services such as health maintenance organizations (HMOs)" and, I presume, health insurance companies. What percent of the $1.58 billion in online spending predicted for 2012 is pharma specific? Probably over 50%, but not 100%. Perhaps 75%? Your guess is as good as mine (or eMarketer's).

So the headline above is misleading. It should read "Healthcare Advertising Shifts to Digital." But is it really?

Another problem is that eMarketer's predictions about online healthcare ad spending have been "all over the map" by which I mean wildly inaccurate and meaningless. In 2007, for example, eMarketer predicted that the spending on online HC marketing would be $2.20 billion in 2011 (see here and chart below). But the eMarketer chart above now indicates the number is closer to $1.28 billion, which is quite a difference.

So, why should we believe eMarketer's prediction that online HC ad spending will increase by 23.3% this year? You tell me.

1 comment:

  1. I responded to another post of yours with similar info but wanted to note here also that eMarketer last year redefined its healthcare and pharmaceutical industry category to remove things like "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. This reclassification undoubtedly accounts for some of the discrepancy you note in your post.


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