GLOBAL: Advertising expenditure by OTC brands in the 13 key markets that account for 74% of total global adspend will expand by 7.6% in 2022 and 5.0% in 2023, according to Zenith’s Business Intelligence – OTC Healthcare report. This will be driven by tailored digital brand advertising, as well as performance advertising driving traffic to OTC e-Commerce platforms. Lockdowns and pandemic-related restrictions led to a leap in OTC e-Commerce in 2020 and with more consumers aware of and comfortable with shopping for OTC products online, this will become an increasingly important sales channel.
Traditional sales outlets are facing competition and brands have opportunities to launch new partnerships or DtC ventures, which will fuel continued growth in brand and performance advertising. Zenith forecasts that OTC brands will increase their digital adspend at an average rate of 11% a year between 2021-23, radio by 5%, TV 3% and magazines will shrink by 3%. Digital will account for 49% of OTC advertising in 2023 vs 46% in 2021.
Nicholas Hall’s Touchpoints: I truly sympathise with Zenith. Up to a year’s work goes into a major report like this – we know from painful experience – and then the invasion of Ukraine changed everything. Following on shortly after the disruptive impact of the Covid-19 pandemic, the recession that will certainly result from the hike in oil prices – and a recession is the best that we can hope for – will upend the global economy and invalidate many of the assumptions that have underpinned CHC industry forecasts.
Six months into the pandemic, in June 2020, my colleagues Nina Monk, Laura Howard Werling and the CIMA team prepared a very interesting report on the impact on CHC consumption of previous catastrophes: the 2008 economic recession and historic viral outbreaks such as SARS in 2003 and Swine Flu in 2009. In the words of the report: “Past events suggest the CHC industry is somewhat ‘recession-proof’: as the global GDP dipped following the 2008 global financial crisis, CHC sales increased in both value and volume terms.”
The 2022 recession is likely to be somewhat different from that of 2008. It will last longer and consumers all over the world will be hard-pressed to balance family budgets. Staple items will become discretionary, including some consumer healthcare items, and CHC marketers will become cautious about launching new products, initiatives and campaigns. In the next month we will start to prepare forecasts for the new edition of our CHC sales database, DB6. This year will be even more difficult than usual.
We are delighted to announce that our annual Asia-Pacific Conference will return to Singapore this November! This event will include the presentation of our Regional CHC Marketing Awards. Stay tuned for details on speakers and topics! Please contact elizabeth.bernos@NicholasHall.com to reserve your seat, to find out about sponsorship or for information on awards criteria.