$137.8B U.S. ad spend for top 200 advertisers
When the Affordable Care Act was signed into law in March 2010, the goal was to provide individuals who did not have health insurance with subsidies and facilitate signups through online exchanges. The exchanges opened for business in October 2013 and the deadline for signing up is March 31. You know what I haven't seen much of since then? Digital ads for health insurance.
Health-insurance ad spending is focused on TV, to the tune of an estimated $500 million in 2014. TV ad spending dwarfs digital in most categories, but the health-care industry has been particularly slow in adopting digital advertising. According to eMarketer, healthcare and pharma has the lowest total projected online ad spend of all major U.S. industries through 2017, and the second-lowest annual growth rate.
We do see health-care providers expanding digital efforts. Cigna, for instance, has been running display and search alongside TV and print since October. Wellpoint plans on investing over $100 million this year in TV, social media and print to reach younger viewers. But it is worth pausing to consider whether the federal health-care rollout might have been different had insurers treated digital as their primary advertising medium rather than a line item in a broader campaign. Mobile and video, for instance, have yet to generate significant investment.
The demographics are clear enough. According to the U.S. Census Bureau, adults aged 19-34 have the highest proportion of uninsured. This demographic is watching less TV and is is easier to reach online. Millennials in particular are three times more likely to stream their TV shows than watch conventional television.
Online is also where purchase decisions get made. Younger Americans are increasingly turning to the internet to learn about health care, with online searches by adults age 18-29 increasing from 27% to 39% in the last two years.
The Affordable Care Act shifts health-care insurance advertising from B2B to B2C. Instead of marketing to a company or doctor, insurance companies market directly to the consumer (or at least, they should). The emphasis is on building a personal relationship, and the focus is on the upper funnel. Since the law mandates virtually identical health-care insurance offerings within each state, the only real differentiation is price and brand.
The opportunity to differentiate is ripe, and digital advertising is a proven medium. The proliferation of video content around health insurance is particularly mind-boggling, given the lack of associated development of ads by many insurers. Not that there's a lack of ads, however. Companies such as Cigna and Kaiser Permanente poured about $40 million into television ads related to Obamacare between Dec. 1 and Feb. 8, according to Kantar Media. All of this means that there is a plethora of broadcast content that could be repurposed online.
Given the abundance of video content available, the strategic marketing objectives and the fact that digital is cheaper than television when it comes to reaching younger viewers, the health-care industry's media mix is surprising. The one silver lining is that Barack Obama understands how to reach millennials. That much was clear after several recent inititatives including an appearance on Zach Galifianakis' online video show "Between Two Ferns." Health insurers might be wise to follow his lead.