Displaying outdated website features and sparse social media adoption, two-thirds of U.S. over-the-counter (OTC) pharmaceutical brands fall below average in digital performance, according to Gartner, Inc. As a result, these brands fail to meet the expectations of the modern consumer and are subsequently falling behind private-label pharmaceutical brands.
The Gartner L2 Digital IQ Index: Pharma OTC U.S. 2019 report ranks the digital performance of 59 brands operating in the U.S. market. These brands were measured across more than 1,200 data points against four critical dimensions: website and e-commerce, digital marketing, social media and mobile site. From these calculations, three brands were classified as Genius (Flonase, Vicks Dayquil and Nyquil, and Mucinex), 17 as Gifted, 18 as Average, 15 as Challenged and six as Feeble.*
“A majority of U.S. OTC pharmaceutical brands are being overshadowed as more consumers are choosing to buy OTC medicine from private-label brands,” said Chris Beland, vice president and sector lead at Gartner. “Such consumer trends have been reflected in the drastic increases in unit sales of private-label OTC products and have also inspired new participants in the private-label OTC space, including the entrance of Amazon’s Basic Care product lines early last year. In order to counter the threat of private labels, underperforming OTC brands must learn from the strategies employed by best-in-class brands.”
Private-label OTC products saw a 93% increase in average year-over-year unit sales across retailers, whereas pharmaceutical brand unit sales increased only 57%. Adding to the pressure, retailers show favoritism toward private-label brands in Google Shopping ads and search results on their respective platforms. Healthcare reference sites such as WebMD continue to enhance their services by assisting consumers in locating private-label OTC products offline and providing discounts, virtually replacing features traditionally offered by OTC brand sites.
Gartner research identified four key findings that U.S. pharmaceutical brands should keep in mind as they look for new ways to win over consumers:
Be the Experts: On average, there are 70,000 health-related searches on Google every minute. This represents 7% of Google’s daily searches and presents an opportunity for brands. By building out an extensive health and symptom management content on their site, brands can maximize organic visibility against nonbranded search queries otherwise dominated by endemic websites such as WebMD.
Shopping Ad Optimizations: While retailers host both private-label and pharmaceutical brands on Google Shopping ads, private-label brands are showing up more frequently against nonbranded keywords (e.g., “best allergy medicine,” “drugs to treat heartburn”). To counteract this, brands should partner with retailers to ensure that retailer-hosted Google Shopping ads uphold optimized ad creatives, ad copy and product information to maximize shopping ad visibility against nonbranded search terms.
Overcome Favoritism on Retailer Platforms: To combat retailers’ preferential treatment toward private-label brands on their platform, pharmaceutical brands should consider the costs and benefits when choosing between deploying sponsored listings and optimizing product page descriptions for the purpose of maximizing visibility.
Catch Up on Couponing: As third-party sites such as WebMD launch comparable discounting services, brands should ensure that product discount information is clearly communicated on their site and display ad content.
Additional details on the digital performance of OTC pharmaceutical brands in the U.S. is available to Gartner for Marketers clients in the report “Gartner L2 Digital IQ Index: Pharma OTC U.S. 2019.”
Companies were classified as either “Genius,” their digital competence is a point of competitive differentiation for these brands; “Gifted,” the brands are experimenting and innovating across site, mobile and social platforms; “Average,” digital presence is functional yet predictable; “Challenged,” limited or inconsistent adoption of mobile and social media platforms; and “Feeble,” investment does not match opportunity.
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