It should come as no surprise to you that in the US, spending on healthcare is the highest in the world. According to the Centers for Disease Control’s (CDC) most recent reporting, national expenditures for healthcare in 2017 totaled $3.5 trillion. Whether we like it or not, healthcare is a big business in America, and like any business in a free, competitive market, advertising plays a huge role in attracting customers - or in this case, patients.
Healthcare advertising has been steadily growing across the country. According to a study in the Journal of the American Medical Association (JAMA), annual healthcare advertising expenditures surged from $17.7 billion in 1997 to at least $29.9 billion in 2016. This increase is mostly due to a rapid spike in spending on direct-to-consumer (DTC) advertisements for prescription drugs, which are not allowed in other countries.
Healthcare advertising is a huge industry that is only getting bigger every year. With it being such a competitive space, it’s not only important that you advertise well, but that you do it the right way. Much more so than other industries, healthcare is highly regulated, and that includes it’s advertising efforts. So, grab your stethoscope and let’s start examining potential ailments and treatments.
The Patient-Consumer Dichotomy
The concept that patients are also consumers is very American. Everyday we see ads for prescription drugs, wellness products, hospitals, over-the-counter drugs, clinics, specialist services, health insurers and other entities in the healthcare industry. All of this indicates that people are considered consumers even if they don’t always act like it when it comes to healthcare. Patients rarely price compare and shop around for the best deal when it comes to healthcare as they would with other big purchases.
Price is not necessarily the deciding factor in purchasing decisions for healthcare. Other considerations, such as perceived quality, perceived benefits, physician recommendations and insurer networks, are given more weight.
Healthcare Advertising Rules & Regulations
The first thing that you should be aware of when considering the actual creative and placement of healthcare advertising campaigns is how regulated the healthcare industry is today. In addition to all of the truth-in-marketing laws that any other industry must follow including laws enforced at the state level, you also need to familiarize yourself with the rules of several federal government agencies concerning healthcare products and services.
If you are advertising over-the-counter drugs and other health products, the Federal Trade Commission (FTC) reviews these ads for the validity of health claims such as increased metabolism or decreased cancer risk. The Food and Drug Administration (FDA) is responsible for regulating what is said about prescription drugs as well as some other medical services such as LASIK surgery. The US Department of Agriculture (USDA) is the government body in charge of setting rules for what can be said about food products. For example, they look at the truthfulness of products that claim to be “fat free” or “low carb”.
And, we can’t forget about the Health Insurance Portability and Accountability Act (HIPAA). This huge piece of legislation protects patient information and is very comprehensive. If you want to use customer information for marketing purposes, you have to ensure you aren’t violating their privacy in any way.
Healthcare Advertising Campaigns
Advertising in healthcare has both positive and negative effects for consumers. On one hand, the ubiquity of DTC ads has helped to destigmatize medical conditions such as sexually transmitted infections. This increases collective awareness and knowledge of often-misunderstood conditions and the likelihood that people will seek out treatment for them. On the other hand, ads can increase overdiagnosis, encourage patients to pay for tests and treatments they don’t need and raise false hopes for the effectiveness of treatments.
Messaging needs to be clear, concise, informative, fair and truthful. You’re also legally obligated to not only outline the benefits of a treatment but also the risks, which can be a complex matter to fit into a 30-second commercial or a billboard.
Along with messaging comes placement. You need to make sure your strategically crafted message finds the right audience. At least in this instance, you have plenty of options.
In the US, digital advertising has stolen most of the spotlight, but print options such as magazines, newspapers and direct mailers still offer a lot of advantages. You can communicate a lot of information and detail in print. You can also target consumers by choosing publications that focus on a particular topic such as women’s health, healthy eating or fitness. Direct mailers can be utilized to attract people within a certain radius of a clinic or hospital location.
One glaring issue with print is how difficult it is to track conversions. To solve this problem, we recommend pairing an ad with a unique URL or QR code to encourage people who see the ad to access your services so you can determine conversion rate and ROI.
Both consumers and providers - whom pharmaceutical companies are particularly interested in targeting - are spending more and more time online. And where the people go, the ads will surely follow. Healthcare internet ad spend grew 16% globally in 2018, according to Zenith’s Healthcare Advertising Expenditure Forecasts. In 2021, Zenith forecasts the internet to overtake television as the biggest medium for healthcare advertising.
Paid Search: Search engines such as Google and Bing are good vehicles to get your brand in front of internet users searching for the types of services you provide. By targeting terms such as “eye exam”, “nutritionist” or “cardiologist”, you can safely target your desired audience without violating any rules or regulations. You can even narrow your ads to queries in a specific geographic area, day of the week or time of day.
Social Media: Social media is a great option for sharing information about specific events such as office openings, walk-in flu shots or blood drives. You can also utilize social media to fuel your content marketing and video marketing efforts. One issue that should be noted is that if you target too broad of an audience on social media, your ads could lose some effectiveness and yield a lower ROI.
In general, the healthcare industry underutilizes out-of-home (OOH) media. According to Zenith, OOH accounted for 4% of healthcare ad spend in 2018, compared to 6.4% across the whole market. Digital OOH options are helping to make this a more appealing media channel, though. As evidence to the untapped potential of OOH for healthcare advertising, OOH Today reports that Ascension, the US’ largest not-for-profit hospital system, spends 75% of its advertising budget on traditional media channels that include OOH. With the right location and creative, you can find your audience where they live, work, play or shop with OOH advertising.
Healthcare advertising puts a higher percentage of its ad spend into television than the market as a whole. Globally in 2018, Zenith reports that healthcare spent 54.7% of all spend on TV, compared to TV’s 30.8% share of the advertising market as a whole. However, the tides have started to turn against TV as budgets shift to OOH and digital advertising. The decline in TV ad spend for healthcare is steeper (5.2% annual declines projected in both 2020 and 2021) than it is for the general market (about 1% per year).
However, the list of streaming platforms and services under the umbrella of TV is always growing, including linear, online and advanced TV options, and with careful planning and execution, you can reach your audience by geographic location, household and even device.
We Aren’t Doctors, But We Are Stewards
Healthcare advertising is notoriously complex, and your campaigns need to abide by the rules of an alphabet soup of regulatory bodies while still being effective. The Ward Group has worked with several healthcare brands over the years, and we understand the criteria that your campaigns must meet while still reaching your target audience, whether it be through print, digital, OOH, video or audio channels.
For a better prognosis on the outcome of your media planning and buying endeavors, don’t call the doctors, call the stewards - the media stewards. Contact us today!