Is OOH a Marketing Bandaid for the Healthcare Sector?

Joshua Lawton Uncategorized Leave a Comment

There are some industries that are a natural fit for out of home advertising and some that do not yet realize that they are a natural fit. More importantly, there are some industries with whom OOH owners are more comfortable selling to, which usually means that less well understood industries go untouched. Healthcare is one such industry. Even though as a whole it is an industry not spend a large percentage of its advertising budgets on out of home media, it does share commonalities with retail stores across America: people have to physically come in to a brick and mortar location.

As the healthcare market becomes more competitive and the number of players shrinks, their average ad spends have continued to increase since 2013. This is all the more interesting since healthcare faces a unique challenge when advertising to consumers: regulatory hurdles imposed by the government. ­


However, this increase in ad spends has not been equally felt within the healthcare industry’s sub-categories. Primarily, growth has been seen in the hospital/medical and pharmaceutical sub-categories.

Even with this growth in marketing spends, US hospitals on average spend less than 1% of their budgets on marketing. This translates to US healthcare networks’ marketing budgets ranging from $1.3M to $5.1M. Ascension, the United States’ largest not-for-profit hospital system with 140 hospitals and $21B in revenue during 2016, spends 75% of its advertising budget on traditional media channels to include OOH. However, while large healthcare networks provide opportunities for OOH owners, it is in fact private practices that spend a larger percentage of their budgets on marketing.

More importantly, private practice clinicians have a hyper-local business model. This model lends itself well to OOH because patients are unwilling to travel great distances for regular care or even urgent care.

Therefore, how should OOH owners sell their boards to the healthcare industry:

  • Focus on conversion metrics: Private practices are specially interested in what advertising mediums led customers into their practices. While patients on average report that a referral was one of the leading causes of their selection, the data is mixed at best. Abraxas Technology’s product provides those direct conversion metrics, allowing OOH owners the ability to tell private practices (and other brick and mortar locations) the number of people who passed the board, the average frequency they passed the board, the average duration that they were in front of the board, and the percentage of people who went by the board and then showed up in the private practice.
  • Focus on high margin private practices: Even though 52% of all patient visits are made to primary care physicians, primary care margins are relatively restricted and competition is based more on convenience than on brand. However, this is not true across all practices. One type of private practice in particular lends itself well to OOH: cosmetic and plastic surgery practices. With year over year growth in the number of cosmetic and plastic surgery procedures, Americans spent in 2016 over $8B. The high cost to the consumer per procedure combined with the importance of the end result to the consumer means that cosmetic and plastic surgery practices are competing on reputation and branding. Both of which can be highly impacted by OOH media.

  • Focus on dental practices: According to Dental Economics, the right percentage of gross revenue that dental practices should spend on their marketing is around 20%. The increasing average gross revenue combined with the increased amount collected belies a problem being experienced within the dentistry practices. From 2008 until 2009 the percent of revenue collected fell. Beyond identifying better account receivable solutions, one way that dental practices can mitigate this problem is by attracting higher margin clients with new services beyond traditional dentist procedures that needs to be marketed to consumers.

If you’re interested in how Abraxas Technology can help you increase healthcare marketing spends with you, don’t hesitate to send me an e-mail at

Joshua Lawton is the COO and Co-Founder of Abraxas Technology

Follow us on Twitter @Abraxas_Tech


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