MediaRadar Blog

Q4 Holiday Helper: Over-the-Counter (OTC) Medicine Advertisers Are Back

The pandemic had an interesting impact on over-the-counter (OTC) advertisers—and not in the way one might assume. OTC demand dropped as people stayed indoors, meaning fewer people sought medical help for severe asthma attacks, and seasonal flu cases hit a record low in 2021. 

Advertisers for many OTC medicines, including those from Bayer, GlaxoSmithKline (GSK), Johnson & Johnson, Nutraceutical Wellness, Procter & Gamble and Sanofi, saw the writing on the wall and embraced more reserved strategies. Advertisers for Johnson & Johnson allocated more dollars to pandemic-related products and initiatives.  

In 2022, with pandemic restrictions lifted and people for the most part resuming life as usual, the OTC advertisers are coming back hot. Already they have spent more than $1.2b through Q3, representing a 21% YoY increase from the same time in 2021. 

Here’s a closer look at how OTC medicine advertisers are spending to promote their products. 

OTC Medicine Ad Spending Is Centralized to the Big Players

There are more than 80 classes of OTC medicines in the U.S. 

That said, only a handful of companies manufacture most of them, which is reflected by the fact that more than half of the OTC medicine ad spending has come from six pharma companies. 

Through Q3, Bayer, GlaxoSmithKline (GSK), Johnson & Johnson, Nutraceutical Wellness, Procter & Gamble, and Sanofi combined to spend $696mm, or 56% of this category’s total ad investment.

Overall, the five top drivers of OTC medicine advertising included allergy, pain management, cold/cough medicine, hair growth aids, and sleep aids. Advertisers in these categories combined to spend 63% of the total investment from this category.

For these companies—and any pharmaceutical company that saw the demand for their products decline during the pandemic—the rebounding budgets point to a return to pre-pandemic spending levels. 

But it may also signal shifting go-to-market strategies and approaches to spending moving forward, especially as many prepare for requests for proposals (RFPs) in 2023. 

Bayer, for example, invested 74% of its more than $230mm budget to promote OTC medicine. Of those ad dollars, 70% went to allergy meds like Aleve, Alevex, Astepro Allergy, Claritin Tablets 24-Hour and Claritin-D. 

Bayer’s approach draws even more attention when pinned up against the strategies of its competitors, including GSK and Johnson & Johnson. 

GSK, for example, allocated just 13% of its budget to promote 60 OTC brands (54% of its total ad investment), including Advil, Nicorette Gum and Tums. Similarly, Johnson & Johnson’s OTC medicine advertising represented only 24% of its overall ad spend through Q3. 

For GSK and Johnson & Johnson, reduced OTC medicine spending could suggest a shift in their strategies, but it could also be a temporary detour as they focus attention and spending elsewhere.

In February, Sanofi and GSK announced they intended to “submit data from their booster and Phase 3 efficacy trials as the basis for regulatory applications for a COVID-19 vaccine.” 

GSK also made a PR push to announce Haleon, “a new world leader in consumer healthcare, offering a compelling proposition—to bring deep human understanding together with trusted science.” 

For Johnson & Johnson, the limited spending could have something to do with its focus on its COVID-19 vaccine. 

If this is the case, Johnson & Johnson may be primed to increase ad spend as the pandemic fades. The fact that 86% of its spending in 2022 went to Pepcid AC, Tylenol, Tylenol Extra Strength Caplets, and Zyrtec Allergy indicates the premium it puts on these OTC medicines—and where its dollars may go in 2023. 

Seasons and Strategies Are Changing 

The seasons are changing, and so are the strategies of OTC medicine advertisers. 

For instance, allergy OTC medicine advertisers, including Sanofi, increased their spending by 72% YoY in Q3 as the allergy season dominated the nostrils and sinuses of millions. 

Unsurprisingly, this came after budgets fell by 8% and 12% YoY in Q1 and Q2, respectively. 

As autumn makes way for winter, and seasonal allergies take a back seat until the spring, advertisers for these medicines will almost certainly fall. 

Advertisers for cold and cough OTC medicines, which accounted for 9% of the OTC ad spend through Q3, did the opposite. 

After decreasing their spending in July by 70% MoM from June, August sparked a spending spree that saw budgets rise as these advertisers geared up for the winter. 

Spending from these advertisers increased by 86% and 670% MoM in August and September, respectively. 

Proctor & Gamble leaned heavily into advertising its Vicks lines (Vicks, Vicks NyQuil, Vicks Vapo, and Vicks ZzzQuil). Spending on these medicines received 60% of the company’s OTC medicine budget.

Other OTC medicines that propelled the category included pain management and sleep aids. 

Pain management OTC medicine advertising, which accounted for 18% of the total OTC investment, increased by 18% YoY, thanks to a 54% YoY increase in Q3. 

At the same time, OTC sleep aids, which represented 7% of the total OTC advertising investment, increased their budgets by 121% YoY. 

For these advertisers, the significant increase came in Q2, when spending increased by 257%. 

While it’s hard to pin down why spending increased so much in Q2, it could have something to do with return-to-office policies (RTO) and the significantly reduced time for midday naps.

OTC Medicine Advertising: More Up Than Down

OTC medicine advertisers aren’t strangers to volatility. 

When the pandemic hit, and the demand for their products plateaued or fell, they created strategies to spotlight different products. 

With isolation (hopefully) behind us, strategies shifted again—and we’ve seen that in 2022.

OTC medicine advertisers will continue to change with the seasons, but we can all agree that overall, spending will be up as the OTC medicine market expands

Much of this growth will come from the established players, but other pockets of the OTC medicine world will play their part, too. 

Private-label products, for instance, are becoming more popular, as is the promotion of medicines in more niche market segments, like OTC hair growth medicines. 

With people putting a premium on their health and appearance in the wake of RTO policies and more socialization, advertisers for these medicines have increased their spending by 61% YoY.

Most of this growth, however, came from Nutraceutical Wellness, which increased its budget by nearly 180% to promote Nutrafol, Nutrafol Men, and Nutrafol Women. (Nutraceutical Wellness has an upcoming RFP in February 2023.)

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Bonus: OTC Medicine Subsidiaries with RPFs in 2023

As the OTC medicine advertisers get back on track, many may also be preparing for upcoming RFPs. 

Here’s what you need to know about upcoming RFPs for Bayer, GlaxoSmithKline (GSK), Johnson & Johnson, Procter & Gamble, and Sanofi:

Bayer

GlaxoSmithKline (GSK)

Johnson & Johnson

Procter & Gamble

Sanofi

For more information about how MediaRadar can help you develop strategic pitches and connect with the right advertisers at these companies, reach out today.