• by Steve McClellan  @mp_mcclellan, March 7, 2022

Last year ad spending by over-the-counter healthcare brands soared 12.8% to $20.1 billion, nearly doubling growth in the category versus 2020. 

Now Zenith is forecasting more robust growth for the sector over the next two years: 7.6% this year and 5% in 2023, when total spend will reach $22.7 billion. 

The Publicis Groupe media agency said that the healthy growth over the next two years would come as “brands defend their price premiums and ecommerce platforms compete to establish dominance.” 

The category had been a laggard in the ecommerce space, Zenith has found. But that began to change in 2020 as lockdowns spurred many brands to get up to speed in the channel with more consumers finding it a convenient way to shop. 

With traditional distributors like pharmacies and supermarkets finding more competition from digital ecommerce platforms and new partnerships such as those in the direct-to-consumer space, increased traffic and sales will fuel continued growth in brand and performance advertising, Zenith concludes. 

The fundamental role of OTC advertising is to maintain brand awareness at the point of purchase, much like FMCG advertising, Zenith notes. Similarly, OTC healthcare makes heavy use of television for mass reach. OTC advertisers spent 38% of their budgets on TV advertising in 2021, compared to 21% for the average advertiser. OTC brands also spend more on radio and magazines – radio for its mass reach and magazines for their high impact. 

But with the rise of higher-quality advertising environments in digital advertising like online video and

retailer media brands can use digital to convey brand values effectively through to the point of sale. Brands are also spending more on performance advertising as OTC ecommerce scales up. 

As a result, Zenith forecasts that OTC brands will increase their digital ad spend at an average rate of 11% a year between 2021 and 2023, while radio grows by 5%, television by 3%, and magazines shrink by 3%. 

Digital will account for 49% of OTC advertising in 2023, up from 46% in 2021.