Pharma has overtaken tech to become the second-largest industry for ad spending in 2023. That is one of a wealth of insights from the latest look at the data from SMI, which found pharma is dialing up spending on established mediums such as linear TV while simultaneously expanding quickly in digital video and podcasts.
Last year, pharma trailed tech and consumer packaged goods on the list of the biggest spenders on ads. However, the industry leapfrogged tech to take the number two spot early in 2023. The outlay on ads by the tech industry fell over the first two months of the year but the bigger story is that pharma doubled down, increasing its share of total spending from 12% to 14% in the process.
In January and February, pharma ad spending increased by 12% and 14%, respectively, year on year. The figures reveal that spending growth is accelerating, with the comparable figures for 2021 coming in at 7% and 1%.
“There's something happening with this category that is really hot,” Darrick Li, VP of sales in North America at SMI, said. “Spending by pharma is actually up across all media types, including linear TV, up 3%, but the fastest rate of growth is coming from mediums like out of home and digital.”
Within digital, Li singled out the ongoing rise of spending on over-the-top (OTT) digital video content as a key trend. OTT, a term that covers media services such as Netflix, Hulu and Disney+, is growing off a low base, at least compared to linear TV, but after seeing pharma spending on long-form content increase 59%, Li nonetheless said “it is pretty monumental seeing how fast digital video is growing.”
The data suggest pharma companies are also increasingly open to advertising in other digital realms. SMI tracked a 35% increase in pharma spending on shorter-form online videos, plus a 208% jump in outlay on podcasts.
Pharma was slower to embrace podcasts than some other industries but the start of 2023 marked a big change. Digging back into the data, Li showed that pharma spent more on podcast ads over the first two months of 2023 than across the previous five years combined.