Tailored digital ads, e-Commerce to drive OTC adspend growth

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.

Ad Watch: 2020 A+P Trends

Two advertising stories caught our attention this week. First was the news that P&G is no longer the world’s No.1 advertiser, with Amazon taking the top spot, according to Ad Age, which publishes an annual list of the largest marketing spenders. The online retail giant spent US$11bn on A+P in 2019, 34% ahead of 2018, when it ranked fifth. P&G was placed second, with US$10.7bn in ad spending in its fiscal year ending in June 2020, while L’Oréal came in at No.3, spending US$10.3bn in 2019. Ad Age notes: “2020 ad spending figures for top marketers are going to be depressed – with exceptions for some advertisers that increased spending to take advantage of market opportunities amid the coronavirus pandemic.”

Secondly, Contagious published its review of the biggest trends in advertising and the best campaigns of 2020. Among the Top 25 campaigns of the year, there were several healthcare & beauty brands listed, including RB’s Dettol, backed by a huge social media initiative on TikTok (#HandWashChallenge) in India. According to Contagious, the campaign involved some of India’s biggest influencers and generated over 125bn views on Dettol’s TikTok page.

Another campaign highlighted was Bayer’s support of Berocca in Vietnam, an A+P initiative that we also profiled earlier this year. Working with digital agency Carnival, Bayer devised the Get Supercharged at 2pm campaign, creating a TikTok music video and encouraging people to post videos of themselves copying its dance moves by offering prizes for the most views. This led to 70,000 videos being created by people participating in the #BeroccaMango2PM hashtag challenge. The campaign directed users to e-Commerce platform Shopee, where they could purchase Berocca bundles and combos. Online sales rose 223% compared with the same period the year before, according to Bayer, while offline sales also increased 32%.

Various beauty brands also featured in the Contagious roundup of the Top 25 campaigns of 2020, most notably P&G’s Dove, which was backed by a Courage Is Beautiful campaign at the height of the pandemic, highlighting the strength and resilience of frontline healthcare workers. The Contagious report also cited recent YouGov research that places both Dettol and J&J’s Tylenol among the Top 25 Best Global Brands 2020 in terms of consumer awareness.

You can review innovation by region and country, including a review of the most active marketers globally in terms of NPD, in our recent report from CHC New Products Tracker, Innovation in CHC. This report also highlights ingredient and delivery format trends, showcases 100 innovative products in 2019, plus much more. For further details, or to order your copy, currently available with a 30% discount until 31 December, please contact melissa.lee@NicholasHall.com without delay.