Aug 29, 2017

Pharma advertising skyrockets while other categories decline

According to Standard Media Index, pharmaceutical advertising is booming, while other category leaders continue to decline.

Data: Standard Media Index; Note: 2017 year-over-year data is through July; Chart: Andrew Witherspoon / Axios

There are a few reasons for this:

  • Prescription ads generally target older audiences, which continue to be one of the top demographics for news. As news programming grows, the Pharma industry is taking advantage of that reach.
  • As baby boomers age, the audience for prescription drugs increases, which means the industry has more people to reach.
  • Pharma ads often cost more because of their length. (They have regulatory requirements to disclose side effects, dosages, etc., so they often need to take out 60-second ads as opposed to 30-second ads.)

Meanwhile, CPG spend cuts drive industry-wide declines: Agency reports of advertising losses in the consumer packaged goods (CPG) and retail spaces is affecting the entire media, entertainment and advertising market, which used to rely on consumer package goods as one of its largest growth drivers.

  • WPP CEO Sir Martin Sorrell cited CPG losses as a part of its Q2 earnings misses. Sorrell says CPG makes up roughly a third of its revenue. Havas reported similar losses in the CPG category last quarter.
  • Some of the biggest consumer goods companies, like Procter and Gamble and Unilever, have been pulling back ad spend, particularly on digital, as a result of the overall economic volatility within the retail and packaged goods industries.
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