As more and more people flock to streaming channels over traditional TV—yet another trend turbocharged by the pandemic—pharma ad dollars are following them.
Advertisers including drugmakers are increasingly carving out bigger chunks of their advertising budgets for connected TV (CTV), spending $14.4 billion on the medium in 2021, a nearly 60% jump over 2020.
But are the bigger investments paying off? Marketing tech company DeepIntent says the answer is yes.
“Television works. We know it works. But connected TV just works harder and smarter,” Marcella Milliet Sciorra, the company’s senior vice president of marketing, said in an interview.
The company used a combination of industrywide statistics and data from campaigns run on its own artificial-intelligence-driven platform to analyze the effectiveness and return on investment for pharma clients investing in CTV.
Sciorra said the findings reinforced what the company had already suspected: Not only is CTV 53% less expensive than advertising on cable TV, but it's better than linear TV, display advertising and online video at reaching pharma’s brand-specific targeted audiences.
“It really validated all the assumptions that we had around CTV,” she said.
The company used ACR (automated content recognition) data, which is information collected using technology that is built into smart TVs, to measure the reach and "audience quality" of recent pharma campaigns.
It found that CTV delivered an 82% higher percentage of ad impressions to people identified as "clinically relevant" to the advertised product. Audience quality—the percentage of the audience identified as "clinically relevant" to the brand—was also 50% higher for CTV than it was for linear TV. CTV also hit the target audience better than display ads and online video ads, with audience quality 12% and 10% higher than each of those media, respectively.
When it came to return on investment, the company looked at the cost per verified patient (cost to reach a clinically relevant individual, as defined by claims codes), and found that depending on the campaign, CTV’s ROI was between 10% and 50% higher that it was for linear TV.
For DeepIntent’s part, connected TV is now the biggest growth area for the healthcare marketing company, which specializes in HCP and patient audience targeting and works with nine of the top 10 pharma companies in the U.S. The company launched a pharma-specific connected TV marketplace in 2020 in response to “incredible demand,” Sciorra said, although linear TV still makes up the lion’s share of TV ad spending.
“If I look at all of the different marketing campaigns I'm doing with clients … we’re betting on exponential growth,” said Sciorra. “We’re bullish that CTV is here to stay.”
The latest forecast from eMarketer makes a similar prediction, forecasting connected TV ad spending in the U.S. will more than double to $34.49 billion by 2025.
But that doesn’t mean traditional TV advertising is dead, Sciorra said.
“While TV provides an unparalleled reach, connected TV provides unprecedented precision,” she said. “It is really the combination of connected plus linear TV that makes a great media plan.”