Case study

Click-through competition

Case study analysis on MedNet.com

What is the case study all about?

Who all are the characters involved in the case study?

Heather Yates-Vice President for Business development at MedNet.com Bill Bishop-Vice President of Consumer Marketing at MedNet.com Bradley Meyers-Chief Financial Officer at MedNet.com Mahira Baker- Chief Marketing Officer at Windham Pharmaceuticals

Some basic terms used in the case study that we need to get familiar with!




Analyzing MedNet.com’s company profile: its goals, team, awards and honors

received, pricing policy and income statement. Also we need evaluate its greatest strengths and weaknesses

MedNet.com’s Goals

• To provide scientifically based medical information to a non-professional consumer audience


• To provide this information for free


• To generate profits from advertising sales


Awards and Honors

MedNet.com does its pricing on CPM basis. It charges

$100 per 1000 impressions.

Strengths Weaknesses





MedNet.com’s Income Statement

Revenue

• Analysis report of the advertising campaign

MedNet.com’s Competitors

Nonprofit and governmental organizations like

U.S National Library of Medicine and W.H.O provided

with more comprehensive information though they were

not easy to navigate.

Unlike MedNet.com, they provided information on

scientifically based solutions and alternative therapies with

disclaimers

A profit based and condition specific

website, cholesterol.com poses financial threat to

MedNet.com’s advertising revenue and

audience.

An indirect competitor

clinictrials.com is taking away a portion

of MedNet.com’s advertising business.

alternativehealth.com competes with

MedNet.com through unproven theories and procedures such as herbal remedies and massage. It has larger

audience base as compared to

MedNet.com and its advertising sales are

more robust

• Marvel biggest competitor

MedNet.com’s biggest competitor:

Marvel

Comparative analysis of advertising cost through various advertising mediums

Cost per click through

Analyzing the Marvel’s threat

1

• MedNet.com charged its advertisers for impressions on its webpages while

Marvel provides impressions for free. It only charges for the click-through

on the advertisements.

2

3


1

2 • If MedNet.com follows Marvel’s policy it will suffer a loss in its revenues by

over 80 percent

3


1

2

3 • Yates and Bill try to evaluate other options to keep up with their revenues.

They come up with three options for

increasing revenues


increasing revenues

Increase the size of its audience by covering alternative healing

approaches


increasing revenues

Contract with large employers to become a corporate health

site of record


increasing revenues

Start charging visitors for providing

information on the website.

Increase the size of its audience by covering alternative healing

approaches

Problem: Alternative health audience

won’t click on ads of pharmaceutical

companies


increasing revenues

Contract with large employers to become a corporate health

site of record

Problem: MedNet.com would be defamed as

morphing from information content business to human

resource service provider for hire


increasing revenues

Start charging visitors for providing

information on the website.

Problem: There will be significant

reduction in the number of visitors on

the MedNet.com’s Website


increasing revenues


4 • All the options are scraped and a new short-term solution needs to be

sought.

5

6


4

5

• Yates and Bill need to convince Baker over the fact that the

services MedNet.com provides has more value attached to it.

6

MedNet.com’s V/S Marvel’s

Ads appearing on MedNet.com’s page are considered much more trusted by audience over Marvel’s


Marvel’s audience is not lucrative enough as compared to MedNet.com


MedNet.com’s higher advertising charges over Marvel can be attributed to the fact that conversion rate of audience watching ads to actually buying products was more in MedNet.com.

Survey results to support their statements


Windham Pharmaceuticals had launched a product Vesselia and it provided promo codes to customers which they can use to redeem offers while purchasing it. They used this to attribute drug sales to relevant advertising venues.


Yates was sure that they had a better conversion rate and thus, offered the incentive of not billing Windham until the reports of the campaign arrived.


4

5

6 • An attempt is made to convey these facts to Baker and postponing the

billing process to support their facts

Baker finally seems quite convinced from the facts

as communicated by Yates and Bill.

However, a new challenge comes up. Both MedNet.com and Cholesterol.com bring

nearly equal margins of profits to Windham Pharmaceuticals. Baker wonders why she should not shift to cholesterol.com and

what advantage they have from MedNet.com over

Cholesterol.com

Analysis of performance of various marketing channels in prescription of

Heart Medication

The entire MedNet.com team is in the dilemma of selecting best alternative keeping in mind the best growth of the company.

Fundamental problems faced by MedNet.com


1) Impression to conversion ratio needs to balance the advertising budgets of advertising companies


2) Competition from condition specific websites


3) Competition from indirect players


4) Competition from governmental websites

Three proposed ALTERNATIVES to be taken into consideration


1) Shifting to employee enterprise businesses


2) Gaining specialization in a particular domain (Heart/Brain etc.) and charge visitors for the content on the website


3) Incorporating alternative health medication content

Alternative 1. Shifting to Employee Enterprise Business


Though the field may align with the company’s core

competency, the company will have to enter into a totally new market


Brand repositioning , entering and establishing itself in an entirely new market will require large inputs of money and other resources


Further, it will invoke learning curve costs for gaining expertise to compete with market leaders


New organizational structures needs to be developed, new objectives and company policies needs to be devised


The primary concern of cut throat competitions and uncertainties will still exist

Alternative 2. Gaining specialization in a particular domain


Regulatory issues, gaining medical certification and

approvals will lead to many inconveniences


Also threats for lawsuits of various kinds for giving unauthorized consultation can be a risk


Selecting a particular domain (Heart/Brain etc.) and tailoring the company again for that kind of health space, structuring organization and brand repositioning will require large inputs of money and other resources


Competing with already established players in that domain and gaining expertise will require time and great efforts


Audience base will shrink in size and will be

restricted to that particular domain, further drop will be triggered due to charging of fees for providing information content. Thus advertising opportunities will further degrade due to reduced audience base.


Brand repositioning shift can cause chaos among the audience as they wont be able to relate the moves of the company with their primary offerings and value proposition (for what they are known for)


Competition will get tougher with head to head

knockout from websites like cholesterol.com which are both established and experts

Alternative 3. Incorporating alternative health content


Slight modifications can be made in the website

by incorporating a new tab for alternative health content


Interested visitors will divert accordingly


Existing visitors won’t leave, as this is just an

expansion into a new adjacency retaining their flagship product alive and undiluted


Disclaimers on alternative health options will help MedNet.com retain its authenticity


Advertisements of all pre-existing pharmaceutical clients can be placed in all other tabs except alternative health


Infact, due to MedNet.com being a brand and market leader in providing free authentic and highly reliable information, new audience base will add up to the pre-existing ones, who are more interested in alternative medications and will shift from alternativehealth.com due to higher reliability


Visitors will get information on both kind of domains under a common roof.


Gradual movements of visitors in both domains will help them explore more and will mutually benefit both types of customer companies as both will get access to new market segments

Thus movement to incorporate alternative health medication

information can work in company’s favor and is a well

calculated and balanced recommendation.

Thank you This presentation was created by

Ashutosh Shukla, IIT Roorkee during an internship under

Prof. Sameer Mathur IIM Lucknow

Date post:	13-Aug-2015
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