SALESFUEL TODAY

Hospitals, Private Practices And Labs Ad Spending Exceeds $3B A Year

by | 2 minute read

Direct-to-consumer advertising now amounts to about 32% of all ad spending in the health care vertical. A significant percentage of that advertising takes place through national ad campaigns that tout the latest prescription drugs. However, hospitals, labs and private practices are also buying advertising in local markets.

A recently released study conducted by researchers at Dartmouth scrutinized ad spending data from 1997–2016. During this period, spending on medical services and drugs increased significantly. So did DTC advertising.

Disease Education and Prescription Drug Advertising

In total, about $9.6 billion in DTC ad spending primarily goes to campaigns that tout prescription drugs and health services each year. However, the really big bucks are spent trying influence physicians. Over $20 billion comes in the form of free samples, that physicians then dole out to patients. Drug companies also try to connect with physicians through medical journal advertising and spend about $500 million a year on that effort.

Medical marketers understand that consumers will talk to their doctors about new treatments they see advertised, especially if they think the new drug will help a condition they suffer from. But, first, they must be made aware of the condition. During the nine year period that the study covered, advertising to educate consumers about specific diseases jumped substantially, from $177 million to $430 million.

Local Market Health Care Advertising

Drug companies aren’t the only entities paying for medical marketing. The $3 billion spent on advertising health services is sourced by hospitals, labs and private practices. By media type, spending breaks out as about $1 billion on TV, $653 million on internet and mobile, and smaller amounts spent on magazines, newspapers, radio and outdoors.

Cancer centers have been targeting consumers with spending that exceeds $200 million a year. And mental health and addiction services reach out with ad spending that’s over $162 million annually. Medical professionals understand that back problems plague consumers and have ramped up ad spending to nearly $90 million to treat these conditions.

Newer services also spend on ad campaigns to inform consumers of treatments like stem cell therapy. However, these operators need to be mindful of FDA oversight. After having spent $11.3 million in 2016, some of these clinics were shut down by the FDA because of treatments that harmed patients.

Researchers point out that, while spending increased 90% on health services during the nine year study period, advertising rose 430 percent. Clinician practice advertising is one market sector that saw rapid ad growth recently, increasing from $11 million to $61 million.

And, laboratory testing centers are now taking their marketing directly to consumers. Analysts believe that consumers will spend over $350 million next year trying to find out their genetic history and potential predisposition to specific medical conditions. Accordingly, lab testing advertising has increased to $82.6 million a year as marketers pitch their products directly to consumers.

To learn more about local health care marketing, check out the Local Account Intelligence Reports in AdMall from SalesFuel. You can use that information to start a conversation with a prospect about how to reach potential new patients.

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.