Over-the-counter (OTC) Healthcare brands account for 61% of the year-over-year growth of e-commerce sales in the CPG sector, but the majority seem unprepared to win on Amazon. In two of the four OTC categories in L2’s Digital IQ Index: Personal Care 2017, Index brands trail smaller, independent brands in ownership of sponsored listings that show up against relevant category search terms on Amazon (e.g. “back pain relief”). In the Allergy category, GlaxoSmithKline’s Flonase is the only Index brand amongst the top five brands by ownership of sponsored listings and it owns half as many listings as independent competitor Good Sense. In the Pain Relief category, the situation is more dire. Biofreeze owns six times as many sponsored listings as the closest Index brand, Advil.


Non-Index brands own 66% of sponsored listings across all Personal Care categories, but their share is significantly larger (82%) in the OTC category. The latter is a more competitive landscape where brands must invest in Amazon Media Services (AMS) if they want to secure  visibility against long-tail competitors on the platform.


As of now, few Index brands reap the benefits of investments. GlaxoSmithKline’s Theraflu and Procter & Gamble’s Prilosec OTC snag the top spots in their categories, owning 10% and 8% of the sponsored listings that show up against relevant Cold & Flu and Digestive search terms, respectively. These enterprises are already investing in AMS in these categories and can coordinate across their portfolio to exploit opportunities in Allergy and Pain Relief. With signs of interest in pharmaceutical distribution from Amazon, investments will be key to capture e-commerce growth. Sponsored listings on Amazon are the main tactic to enhance visibility on search results. Adoption of sponsored listings has been critical for independent brands and has led to  fragmented ownership with many small players spending across the board. Large OTC brands backed by either legacy CPG or pharmaceutical firms—who already invest in sponsored listings in select categories—must outspend competitors to win on Amazon.



Daily Insights in Your Inbox