Healthcare brands are expected to reduce advertising spend in Australia this year, according to analysis by Zenith.
Zenith’s Healthcare Advertising Expenditure Forecasts show a slight 0.5% fall this year to $A181.6 million. This will be followed by limited growth of 0.5% to $A182.5 millionin 2020.
Nickie Scriven, Zenith Australia's CEO, says many businesses will find 2019 a difficult year with Australia entering a "pro-rata" recession and with consumer confidence at its lowest in years,.
“As consumers pull back on non-essential spending, we anticipate advertising spend to grow slightly in 2020 and beyond, as advertisers attempt to stay top of mind and stimulate spending against a backdrop of lower demand," she says.
"Though the healthcare sector will be less affected than advertiser categories such as automotive or retail, we anticipate the rise of generics to impact branded product sales as consumers look for cost savings.
"This will likely continue to trouble the industry, leading to increased brand advertising as a key priority to counter the switching behaviour."
Zenith estimates that global advertising expenditure by healthcare brands will grow 3.6% this year to $US36 billion.
Healthcare advertising is growing at a slower rate than advertising as a whole, which is expected to grow by 4.8% in 2019 and 4.3% in 2020.
High research costs and persistent downward pressure on prices are hindering the prescription medicine business and restraining advertising spend by the big healthcare companies.
However, this will begin to change as the ageing global population creates higher demand for healthcare, combined with new over-the-counter products and services that will expand the supply, enabled by new technologies like personal data tracking, telemedicine and AI.
Zenith expects healthcare advertisers tomove further into digital advertising, mirroring the wider market.
In Australia, internet adspend is forecast to grow by 10.9% to $A47.3 million in 2019, and continue to grow at a similar rate over the next two years.
Television ad spend is forecast to fall by 3.6% to $A99.2 million this year, although the decline is expected to slow to 1.8% by 2021.
"Advertisers in this sector tend to be some of the most sophisticated. Healthcare and pharmaceutical professionals are increasingly exploring innovative ways to utilise data and insights to drive strategy and consumer engagement," says Scriven.
"As such, we anticipate accelerated investment in data and advertising strategies to leverage and enhance owned first party data.”
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