Health systems begin to create their version of retail media advertising

The trend: Some large US health systems are creating digital advertising platforms that contain educational content for patients while allowing outside healthcare companies to market their products and services, according to a recent McKinsey report. This new trend is essentially healthcare’s version of retail media advertising, per McKinsey.

How it works: A few prominent provider organizations offer ad placements on digital channels where they’re creating their own health content or sourcing content from other health information sites.

• Cleveland Clinic has a library of content about diseases and conditions published alongside ads on its website.
• Kaiser Permanente offers ad placements on its platform that includes clinician-evaluated self-care apps and wellness resources.
• Mayo Clinic sells OTC health products and offers advertising-supported content on diseases and conditions, healthy lifestyles, and other topics.

The opportunity for healthcare orgs and third-party advertisers: According to McKinsey, a $10 billion health system could achieve a $50 million to $65 million contribution margin run rate within five years through health-sponsored ad placements (e.g., email, websites, and apps). Meanwhile, health and wellness brands offering condition-specific products and services could improve their ability to reach certain groups of patients via health systems' digital platforms.

McKinsey bases these estimates on a few key assumptions—primarily that consumers will gravitate toward trusted sources of health information when researching symptoms, conditions, or treatments.

Consumers mostly start their health information searches on Google but lack trust in the content they come across. Far fewer consumers (23%) begin their online medical research on health system websites than search engines (71%), per EMARKETER’s survey of healthcare consumers.

Yet they’re probably more inclined to engage with a health ad on a channel where they trust the information they’re seeing. McKinsey’s survey found that consumers are much more likely to trust the accuracy of health content from healthcare providers (64%) than social media and blogs (5%).

The ad opportunity: Consumers are likeliest to engage with health and wellness content and click on a health ad when they’re still discovering things about their health, per McKinsey’s survey.

Further, consumers who are researching information to learn about their health are most interested in ads on medical services and OTC health and wellness products, per McKinsey.

Looking ahead: The health media advertising market is still nascent, especially when compared with retail media advertising.

But we could see more advertising partnerships forged between health systems looking for a new revenue stream and health and wellness companies wanting to more effectively target patients with specific health conditions.

• 45% of healthcare leaders said they’d either allow or expect to allow advertisements on owned channels (e.g., website, email, or text), per a separate McKinsey survey of health system executives.
• Surveyed execs most commonly see ads as a tool to connect consumers with needed services (49%) and find helpful information (45%).

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