Ad-driven commoditization of telehealth
Ro and the telehealth capital cycle
The core problem was that telehealth for ED and similar cash pay prescriptions was easy to copy, so growth quickly shifted from product advantage to who could spend more on Meta and Google. Ro and Hims built a simple funnel, online intake, clinician review, recurring generic meds, but fast followers launched the same playbook in hair loss, mental health, weight loss, and women’s health, which crowded auctions for the same high intent keywords and social audiences while churn stayed high.
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This looked like consumer DTC because the real scarce asset was not the drug or visit, it was cheap attention. Once Viagra generics, finasteride, birth control, and other standardized treatments were sold through near identical landing pages and subscription flows, price and ad efficiency mattered more than clinical differentiation.
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The market also fragmented by condition. Thirty Madison built Keeps around hair loss, Nurx around female health, Cerebral around mental health, and Noom later showed the opposite model, going deep in one category with coaching and tracking layered around medication. That made broad telehealth brands fight specialists on the specialists’ home turf.
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Apple made the economics worse. App Tracking Transparency rolled out with iOS 14.5 in 2021 and limited cross app tracking for targeted ads, and Hims reported paid marketing expense of $678.8M in 2024 versus $446.4M in 2023 as it kept investing to acquire customers at scale. In this model, weaker targeting hits growth almost immediately.
The next phase favors telehealth companies that add reasons to stay beyond the first prescription. That means deeper condition specific care, better cross sell into adjacent treatments, and lower cost distribution through retail, employer channels, or owned demand. The winners will look less like ad driven DTC brands and more like durable care platforms with multiple ways to acquire and retain patients.