There has been a growth in over-the-counter (OTC) advertising throughout the pandemic as brands have begun to modify their messaging to adapt to the situation. While the overall market decreased by 3.5%, OTC ad spend grew by 6.8% in 2020 and 12.8% in 2021 and will continue to grow by 7.6% in 2020 and 5.0 % in 2023, through bespoke digital brand advertising and performance advertising driving traffic to OTC e-commerce platforms.
Zenith, an ROI (return on investment) agency, has released a new report titled “Business Intelligence – OTC Healthcare”, analyzing ad spend on over-the-counter drugs and remedies in 13 markets, including India.
In the pre-pandemic era, OTC lagged the market in the adoption of e-commerce platforms. The lockdown has led to a rapid increase in OTC e-commerce. In the coming years, OTC e-commerce will compete with traditional retailers, fueling the continued growth of brand and performance advertising, according to the report.
Since the OTC sector, much like FMCG (fast moving consumer goods), requires brand awareness at the point of purchase, the sector primarily advertises on television. OTC advertisers spent 38% of their budget on TV advertising in 2021, compared to 21% for the average advertiser across all categories. OTC brands also spend more on radio for their mass reach and magazines for their high impact.
Now that there is an increase in high-quality digital ad environments, the report predicts that OTC brands will increase their digital ad spend at an average rate of 11% per year between 2021 and 2023, while radio will grow by 5% , television by 3 percent, and magazines will decrease by 3 percent. Digital will account for 49% of OTC advertising in 2023.
Benoit Cacheux, Global Chief Digital Officer, Zenith, said, “The continued transition to digital enables OTC brands to use smart segmentation and dynamic creative to market the same products to different people with different needs, in the framework of the regulation of digital advertising in this country. Category.”
“The gym goer with sore muscles, the office worker with headaches, and the parent whose child has growing pains all need pain relief, but brands need to talk to them. in different ways to persuade them as effectively as possible. This ability to tailor creative to audience needs gives digital advertising an edge that traditional media never had,” Cacheux added.
“The pandemic has focused consumers’ attention on their health and disrupted their reliance on traditional OTC distribution channels,” said Jonathan Barnard, head of forecasting at Zenith. “Brands will continue to increase their investment in digital advertising as the rise of e-commerce gives it a bigger role in driving OTC and brand sales growth.”