The US and China account for 86% healthcare ad spend, India is fastest-growing
The overwhelming leaders in healthcare advertising expenditure are the US and China, which together accounted for 86% of spend in 2018, or US$15.9bn and US$14.4bn respectively. All other markets accounted for less than US$1bn.
According to recently published ZenithMedia report, one of the reasons for this is that in other large advertising markets, the types of healthcare products and services that can be advertised are more restricted, as are the media in which they can appear and what they can say. None allows direct-to-consumer advertising of prescription medicines, as does the US. The level of healthcare spending is therefore much lower than might be expected given the size of overall adspend in markets like Brazil, France, Germany, South Korea and the UK.
The report also revealed that US healthcare ad spend grew at an average rate of 6% a year between 2013 and 2018, partly driven by strong growth in television advertising of prescription medicines. However, US pharmaceutical companies are facing particularly intense scrutiny of their prescription prices.
Also, there has been consolidation among intermediaries such as managed care organisations and pharmacy benefit managers, which has been taking a tougher stance in price negotiations. The government has also been trying to force companies to include prices in their television ads for prescription medicines.
While a recent attempt has been successfully challenged in court, it’s clear that the government intends to use television advertising as a tool to create more price competition. For the moment, we forecast only a mild slowdown in US healthcare ad spend, with 6% growth in 2019 followed by 5% growth in 2020 and 2021, as strong expansion in internet advertising compensates for slow erosion in television.
India is by far the fastest-growing market, growing at an average of 26% a year between 2018 and 2021. Rising incomes and increased access to health insurance are making healthcare more accessible and encouraging a more direct-to-consumer marketing of healthcare products and services. The next fastest-growing is Brazil at 9% a year.
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