Health and beauty brands favored the internet to TV and magazines as they reallocated ad dollars in the first half of 2006.
Online advertising by personal care marketers is showing steady growth this year as they test online video and viral marketing and build microsites for new products targeted to specific demographics. Even some laggards are beginning to up their online spending. For instance, Estée Lauder Companies in September launched its first interactive campaign to promote its latest anti-aging treatment, Advanced Night Repair Concentrate. The Wall Street Journal reported that the campaign combines TV ads with an interactive website featuring information about the new product and the whole Advanced Night Repair line. In keeping with the trend to engage visitors and create buzz, visitors are able to post their own testimonials about the products. According to TNS, Estée Lauder's online display ad budget rose 3.6 percent in the first half of this year, to $2.57 million, compared to the same period in 2005.
Last year, advertisers of personal care products spent $5.64 billion in television, print, radio outdoor and the internet, according to Advertising Age and TNS Media Intelligence. The medicine and remedies category, which includes prescription as well as OTC drugs and supplements, was backed by $8.44 billion in measured media advertising. Each category saw an increase of 1.8 percent in advertising in 2005, the latest full year for which figures are available.
Personal care products ranked seventh on TNS' list of top spending advertising categories for the first half of 2006 compared to the same period in 2005, up from the 10th spot in the first quarter of the year. Spending in the category grew 3.1 percent for the first half of this year, although that growth rate was slower than the 6.9 percent the category posted in the first quarter, according to previous TNS figures.
Personal care products are one of the strongest categories in online consumer goods, typically ranking in the top three spots for advertising impressions, according to data from Nielsen//NetRatings Ad Relevance that is reported monthly by Internet Retailer. The most recent figures, for August, show a 32.4 percent increase, to 1,281 million impressions, compared to July. Of course, seasonal occasions cause fluctuations in the number of ad impressions from month to month. For instance, in May, Nielsen//NetRatings reported personal care ads made 1,370 million impressions, a 55.7 percent increase over April. Considering that Mother's Day, a prime health and beauty event, as well as the start of graduation and high school prom season all occur in May, the change is not as startling.
To get a sense of where the top five health and beauty marketers were channeling their advertising dollars, eMarketer asked TNS to pull the most recent ad spending data in three consumer product categories: cosmetics and beauty aids, hair products and accessories, and personal hygiene and health. The results, comparing the first six months of 2005 against the same period in 2006, yielded some interesting trends among the companies selected: Procter & Gamble, Johnson & Johnson, Unilever, L'Oréal and Estée Lauder.
On average, the health and beauty advertising for these five companies declined 11.3 percent in the first half of 2006. However, the three largest companies -- Procter & Gamble, Johnson & Johnson and Unilever -- decreased their advertising spend, while L'Oréal (+31.7 percent) and Estée Lauder (+3.6 percent) boosted theirs. Johnson & Johnson slashed its health and beauty budget the hardest, cutting 43.1% in the first six months of this year, followed by Procter & Gamble (-10.7 percent) and Unilever (-8.9 percent).
A look at the media channels -- television, magazines, newspapers, radio, internet and outdoor -- shows these five companies cut back on TV and magazines while putting more money into internet display ads (+6.9 percent), outdoor (+7.1 percent) and newspapers (+29.0 percent). Two interesting notes: TNS does not measure search advertising, which can amount to 40 percent of an internet advertising budget, so the internet ad spending was probably higher than the $3.2 million recorded for these five companies. Also, the bulk of the increase in newspaper advertising most likely went into coupons in freestanding inserts that are delivered in Sunday newspapers.
Of course, data on only five companies covering a six-month period do not give a definitive picture of the health and beauty market's advertising trends. But they do reflect broader trends emerging in 2006. Universal McCann released a report in June reflecting advertising spending in the first quarter of 2006 vs. the same period in 2005. Overall, the toiletries/cosmetics industry and drugs/remedies each pulled ad dollars out of the spot television market while pumping double-digit spending increases into magazines. (Universal McCann did not include Internet spending in its report.) The two categories spent modestly more in network TV in the first quarter, Universal McCann found. By May, however, major consumer goods advertisers such as Procter & Gamble and Johnson & Johnson decided to sit out the traditional broadcast TV "upfront" market in May, and did not commit TV ad budgets until the fall, according to Advertising Age and The Wall Street Journal.
Lisa Phillips is a senior analyst at eMarketer. This article was drawn from her report Health and Beauty Marketing: Meet Your Online Customers. Contact eMarketer directly.