This blog post originally appeared on On TV & Video, a column exploring opportunities and challenges in advanced TV and video.
The connected TV streaming boom is drawing a traditionally conservative group of marketers in healthcare and pharmaceuticals, who are attracted to CTV’s targeting and customization capabilities. Healthcare and pharma marketers’ digital advertising spend grew over 14% in 2020 and is expected to surpass $11 billion this year, according to eMarketer. But when it comes to reaching audiences in CTV, there are a slew of challenges healthcare and pharma marketers face compared to other industries, such as travel and auto.
Healthcare is a highly regulated category, and aside from needing digital tools with HIPAA-compliant data and targeting capabilities, some publishers may have policies against running pharma ads, and Big Pharma has faced criticism over questionable marketing practices.
Tech platforms have been rolling out solutions to drive programmatic buying and help ensure compliance while also tapping into ad dollars flowing into the space.
Last year, marketing tech company DeepIntent launched what it called the first programmatic CTV marketplace built specifically for pharma and healthcare advertisers. In March, AT&T’s advertising and analytics unit, Xandr, partnered with healthcare marketing and analytics platform Lasso to deliver programmatic advertising to the pharma and healthcare industries across CTV, social and email. And in April, WebMD parent company Internet Brands acquired programmatic platform PulsePoint.
PulsePoint’s buy-side tech is exclusively focused on healthcare marketers. The company said it works with 80% of the leading healthcare agencies, like Publicis Health Media, and top Fortune 500 pharma companies, like Bayer.
The CTV marketing boom has come to healthcare advertising.
“We've gone from having very few inquiries about CTV to having most of our advertisers ask about it within the past six to 12 months,” PulsePoint CEO Sloan Gaon said.
AdExchanger spoke to Gaon.
ADEXCHANGER: Why are healthcare marketers increasingly leaning into CTV these days?
SLOAN GAON: If you're a Procter & Gamble, and you want to advertise toothpaste, your audience is 320 million Americans. When you develop a drug around [nonalcoholic fatty liver disease] that afflicts 30,000 people in the United States, the spray and pray approach that you used as a TV advertiser doesn't work any longer when you're trying to reach a niche audience.
With CTV, we're at a watershed moment for pharma advertisers who used to just mass-market drugs. If you were marketing Viagra, you were marketing to half of the U.S. population of males. Your targeting capabilities using linear TV advertising were limited at best. With CTV, and all the targeting capabilities that come with it, healthcare marketers are more empowered than ever to get away from that spray and pray approach.
ADEXCHANGER: What challenges are healthcare marketers facing in CTV right now?
SLOAN GAON: The challenges in CTV are two-fold. Healthcare and Big Pharma have tended not to be early adopters of new marketing technologies and capabilities; they tend to be much more conservative.
The first challenge is overcoming that conservatism as it relates to healthcare marketing. Five years ago, healthcare marketers spent about 14% of their budgets on programmatic advertising. Every other industry – auto, finance, travel – spent 70% to 80% of their budgets on programmatic. Over the past five years, healthcare marketers have said that programmatic is a very good channel to hit their audiences more efficiently and effectively, with a lot less waste compared to non-programmatic channels.
The second is around the “always on” nature of CTV. Traditionally, healthcare marketers would buy during the upfront, and they would have to commit to six months or a year in advance to buy a certain amount of inventory.
Most healthcare marketers pulled back their budgets when the pandemic hit – they didn't want to upset their clients who were really concerned around COVID and their own health. But they couldn't really do that with the upfront because they bought time in advance. CTV changes that for them – it's now an always-on channel, and they can change tactics and change their audiences at will. If you want to start a campaign on CTV, you can do it in the next 15 minutes. There's a lot of flexibility.
ADEXCHANGER: What about targeting and the “creep” factor around healthcare and pharma advertising?
SLOAN GAON: The FDA restricts the use of cookie retargeting on a variety of conditions, like sexually transmitted diseases, mental health and oncology. There's lots of compliance and regulatory issues that healthcare has to comply with that other industries don't. Healthcare marketers take a privacy-safe approach to advertising, and we do as well. We're very sensitive to making sure that the advertising that people see is helpful to them. There's a lot of folks who don't think that pharma should be targeting patients.
I don’t think that's the right approach. Healthcare marketing is around creating awareness about options in the marketplace and then having that patient initiate a conversation with their doctor. And that's very different from selling toothpaste.
What sort of inventory is available to healthcare marketers in CTV? Has supply been an issue? Two years ago, it was a supply issue. Today, it's a demand issue. There's no scarcity of supply, but the demand hasn't caught up with the supply. And supply continues to increase as more households add CTV and the big content studios produce their own channels, like Peacock. In healthcare, it's really the demand side that we're waiting for.