The “news”: 2022 was a bad year for venture capital investments in digital health, per Rock Health.
What it means: The report lays out the ramifications of VC investors’ switch to backing early stage health companies at the expense of growth- and late-stage ones.
Those moves have swelled the ranks of startups trying to gain more stable toeholds in the healthcare ecosystem. That has increased competition with growth-stage companies that aren’t able to access capital like they could in 2021 and early 2022.
Rock Health predicts that “macro headwinds for D2C won’t be relenting” in 2023. Some digital health companies will—or already have—switched to B2B sales to bolster their bottom lines. Others will succumb to the continuing economic pressures by shutting down or being acquired.
The knives are out: We’ve already laid out some issues digital health companies face in 2023, particularly those targeting consumers and/or health systems. Marketing budgets are under extra-sharp scrutiny for all media, including digital ad spending.
Where digital ad dollars are going now: We estimate healthcare and pharma digital ad budgets will keep growing over the next few years, reaching nearly $20 billion in 2024.
New outlets are opening up: Retail media networks are still largely untested and, depending on the retailer, can be hard to navigate or prohibitively expensive. But D2C healthcare and pharma brands may find some success partnering with Best Buy, CVS Health, Kroger, or Walmart to break through the noise in other channels.
This article originally appeared in Insider Intelligence's Digital Health Briefing—a daily recap of top stories reshaping the healthcare industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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