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Ad Dollars Follow Eyeballs to Web
Guesstimating Total Pharma Web Ad Spending

By John Mack

Internet advertising revenue in the United States totaled $26.0 billion for the full year of 2010, whereas ad revenue earned by newspapers was $22.8 billion, according to a PwC/IAB report (see here). Here's the distribution of ad revenue charted by category:


Here's the trend in annual Web ad revenue from 2000 through 2010:


Search continues to get the largest share of online revenue, although this share decreased to 46% in 2010 from 47% in 2009. Still, search revenue totaled $12.0 billion in 2010, up over 12% from $10.7 billion in 2009. Display-related advertising revenues -- which includes revenue from display banners, rich media, digital video, and sponsorships -- totaled $9.9 billion or 38% percent of 2010 revenues, up 24% from the $8.0 billion reported in 2009. Digital video ad revenue accounts for 5% ($1.4 billion) of the total Web ad revenue.


From these data, you might assume that the drug industry spends 25% of its ad dollars on Web advertising. That could be a false assumption. It's generally believed that the drug industry Web advertising slice of total ad spend is much less than 25%.

Finally, according to PwC/IAB, here's the percent of total Internet ad revenues from different industries:


GUESSTIMATING Total Pharma Web Ad Spending
Pharma & Healthcare are near the bottom of this chart. 5% of $26.0 billion is $1.3 billion, which is what the Pharma/Healthcare industry spends on Internet advertising (INCLUDING search) according to PwC/IAB. Let's say 80% (ie, $1 billion) of that is Pharma-related. Pharma spends about $4.5 billion in direct-to-consumer advertising. It may spend the same in advertising to physicians -- not counting samples and sales rep expenses. If my guesstimate is correct, then $1 billion accounts for about 11% of the total pharma ad spend.

This story was originally published in Pharma Marketing Blog on April 14, 2011.

PMN107-03
Issue: Vol. 10, No. 7
Publication date: 15 April 2011
Word Count: n/a

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Vol 10, #7 Contents








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