Advertising expenditure for over-the-counter medicines rises sharply

By 2023, global advertising spend on over-the-counter (=OTC) medicines will be 36 percent higher than in 2019.

In Switzerland, growth over the same period is 9 percent. And the share taken by digital media in OTC budgets will rise from 46 percent in 2021 to 49 percent in 2023. In Switzerland, this share will rise from 15 to 20 percent over the same period.

According to Zenith's latest Business Intelligence-OTC Healthcare Report, adspend for over-the-counter medicines in 13 core markets is expected to grow 7.6 percent in 2022 and 5.0 percent in 2023. This growth will be driven by tailored digital brand advertising, as well as performance advertising that drives traffic to OTC e-commerce platforms.

Advertising for OTC products gained global prominence during the pandemic. While the overall market declined by 3.5 percent, OTC advertising spend increased by 6.8 percent in 2020 as healthcare news now became more relevant to consumers.

"In this country, this development was somewhat different," explains Maria Brinkmann, Managing Director at Zenith Media in Switzerland. "In the first pandemic year of 2020, OTC advertising spending fell by 11.3 percent, which is roughly in line with the market average. But we then had growth of 9.5 percent in 2021 to make up for that. We then expect another 5.1 percent growth in 2022 and another 6.8 percent in 2023," Brinkmann continued.

Demand for cold and flu medicines generally fell sharply as the spread of such diseases was reduced by limiting social contact. However, most other subcategories continued to grow, and sales of sleeping pills surged.

In 2021, OTC advertising posted solid growth of 12.8 percent, although it lagged slightly behind the expansion in the overall market, the shortfall of which had to be made up. We expect OTC advertising growth to remain stable over the next two years as brands defend their market positions and e-commerce platforms fight for dominance.

Jump due to Corona in e-commerce

Although e-commerce trade in OTC products lags somewhat behind the overall market, lockdowns and other corona-related restrictions have led to a surge in 2020. As more consumers learn about and appreciate the ability to purchase OTC products online, this sales channel will steadily grow in importance over the next few years. This means that traditional retailers such as pharmacies and drugstores will have to compete with new digital e-commerce platforms, and brands will have new opportunities to initiate partnerships or even stores aimed directly at consumers.

The study forecasts that adspend for OTC healthcare products will increase from $20.1 billion in 2021 to $22.7 billion in 2023, up 36 percent from the 2019 (pre-pandemic) level of $16.7 billion.

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