Could this be the future of pharma advertising?
By Stacey Levas & Drew Teller
The word is out — streaming television offers new and innovative opportunities to reach targeted audiences at scale. But why are pharmaceutical brands hesitating to make the move despite the increase in OTT viewership?
Likely because privacy plays a massive role in shaping how pharma companies advertise; and rightfully so, pharma tends to proceed with caution. Identifying, segmenting, and activating audiences based on known health conditions or existing prescriptions in a privacy-compliant way is complex — particularly given HIPAA laws and evolving state regulations.
That said, OTT’s ability to connect healthcare brands with the consumers most likely to benefit from their product or service remains compelling. And with the right technology partnerships, reaching relevant consumers on streaming with targeted medical messaging is not only possible, but highly optimizable.
I sat down with my colleague Drew Teller, product manager at Medicx, to talk about solutions and strategies healthcare companies can use to achieve real results — without running afoul of consumer expectations or privacy regulations.
Q: In the US, over 85% of people consume content on an OTT device, and the latest projections say that next year, streaming viewership will overtake linear viewership altogether. How is this shift affecting pharmaceutical advertising?
A: We know that linear TV can work if you want to raise awareness and reach as many people as possible. But the rise of OTT is undeniable. By 2027, it’s expected that there will be over 300 million OTT users — that’s about 90% market penetration.
OTT is where pharma brands need to be. It’s the best way to run a targeted campaign with real metrics like ROI and audience quality. Streaming lets you track performance with significantly more granularity and make optimizations much faster than traditional TV. As a pharma advertising company, that’s especially important. Medicx recognized that early on and made the strategic decision to completely lean in.
OTT also addresses a unique challenge that pharmaceutical advertisers face: influencing both healthcare providers and patients at the right point in the patient journey. What is known as Omnichannel marketing. Because advertisers run campaigns in parallel to achieve these dual goals, omnichannel is king in pharma, and OTT should definitely factor into that important mix.
Q: The value of streaming is evident for pharmaceutical omnichannel advertising. But how do you compliantly target the right people on OTT?
A: It all comes down to geo-targeting. Medicx is the only medical data tech company that applies geo-targeting in the most rigorous and trusted, privacy-compliant, HIPAA-compliant way.
Our patented Micro-Neighborhood® platform is really the cornerstone of our success. The way we approach the puzzle is by splitting the country into 35 million micro-neighborhoods or hyper clusters of geographic areas if you will; and then, leveraging real-world evidence, we look for which of those neighborhoods contain signals from consumers that are brand eligible.
We can then target those micro-neighborhoods so our clients can deliver messaging about potential healthcare solutions to multiple relevant consumers in that area at once. There’s no need to expand the audience to include geographies where we don’t have health data for people. And that saves a lot of advertising dollars for our clients.
Q: Where does Medicx get the data it uses to assess prevalence in these areas and devise targeting strategies?
A: First off, it’s important to note that all our data is anonymized, so we’re never touching personally identifiable information. We source our data from insurance claims, which cover doctor visits, prescriptions, and specialty medical information that can be integrated with lifestyle and consumer data of over 300 million people.
We work with 7 to 8 billion claims from 36 months’ worth of aggregated data, representing a huge swath of information that we can draw on to better understand a pharma brand’s consumers.
Then, we anonymize, tag, and pull the claims into a data warehouse, where our patented technology surfaces just the patient geography for each claim. At the end of that deterministic process, we’re left with a list of millions of nine-digit zip codes to score and rank for signal strength, allowing us to remain HIPAA compliant with our geotargeting.
Q: Pharma advertisers can be resistant to change. What makes OTT such a compelling platform for healthcare advertisers?
A: While the pharmaceutical industry can be conservative, we’ve found that streaming is a way to extend reach, especially when an advertiser knows they are able to reach any age group now. According to a recent report, the number of adults over age 55 who subscribed to live streaming services grew by 60%. Because many medications are geared toward baby boomers, the migration to streaming presents a paradigm shift, both for viewers and pharmaceutical advertisers.
It’s important to recognize the value of linear TV, but advertisers might not realize the extent to which they’re missing out on signals by foregoing OTT. With linear, you don’t get a whole lot of data or statistics back to inform optimizations.
With OTT, one of the biggest draws is the level of insight the channel offers. Once brands see the performance metrics, daily data, and reporting dashboards that are possible with OTT, they understand how much easier campaigns are to track and optimize on the channel.
Another way we get brands to try out OTT is with existing content. If you already have a video ad unit running online, why not share it on streaming to reach even more consumers, gain deeper insights about your audience, and add frequency to your household data? There’s no reason to leave that opportunity on the table.
Q: Diversity, equity, and inclusion (DEI) is an increasingly important objective in pharmaceutical advertising. How does OTT support targeting patients based on social determinants or reaching consumers who may otherwise be underserved?
A: The pandemic certainly escalated the importance of pharma’s DEI initiatives. Many of our clients saw patients with comorbidities, who could have received better treatment or weren’t getting their medications. This is where geotargeting is especially valuable. It enables us to identify and target areas where access might pose a barrier to care, and we can then ensure we’re reaching those underserved communities.
Increasingly, pharmaceutical companies are also looking to incorporate social determinants of health, such as ethnicity or age, into their campaigns. This type of targeting is particularly important in cases where certain populations have a higher propensity for a particular illness.
Targeting based on social determinants of health is also becoming increasingly relevant as more pharmaceutical brands create precision drugs meant for specific demographics and medical criteria.
Check out our on-demand webinar to learn more about advertising on OTT:
How pharma brand teams can harness the power of privacy-safe personalization for OTT/CTV