MedNet.

com Confronts Click-

Through Competition
Advertising Management Case Study Analysis

Group 6, Section A
Introduction

About MedNet.com
Founded in 2002
4.3 million monthly visitors and $1 million in profits
Content generated by 24 trained journalists, doctors, designers and
administrators, faculty of prominent medical schools, news agencies and an
active community of visitors using social media tools

Goals of MedNet.com
Providing scientifically based medical information to a nonprofessional
consumer audience
Providing this information for free
Generating profits from advertising sales

USPs of MedNet.com
Award winning website
Trusted for health related issues
Provides evidence based consumer health information

Competitors
For Visitors
U.S. National Library of Medicine
World Health Organization
Customized Health Portals on Company Intranets
For Advertisers
Marvel (providing large reach)
Cholesterol.com (condition specific site focused on particular problem)
ClinicalTrials.com (experimental procedures)
AlternativeHealth.com (Providing unproven therapies)

Issues faced by MedNet.com

Marvels Challenge
Marvel MedNet.com

Large search engine following A website delivering free health related

contextual or pay-per-click, banner information to visitors
advertising

2 MEDNET.COM CONFRONTS CLICK-THROUGH COMPETITION

Follows CTR (CPC) based advertising Follows CPM based advertising model,
model, charging advertisers only when charging advertisers a specified amount
an ad is clicked and providing free ad per thousand ad impressions
impressions

19 million visitors per month 4.3 million visitors per month

CPC is $0.54/click CPC is $3.33/click

Points of Concern
Selling ads at CTR comparable to that of Marvels rate would lead to a drop of
80% in MedNets revenue
Windham feels that it is paying 6x more on MedNet.com
For advertisers, CTR matters more than CPM
Windham is one of the biggest advertisers for MedNet and if MedNet loses
Windham other advertisers might follow suit

U.S.
Advertising Venue MedNet Marvel Search Newspaper
Impressions Windham Received 17200000 57000000 5000000
Click-throughs 516000 798000 37000
Cost per click-through 3.33 0.54 7.03
CTR 3% 1.40% 0.74%
Purchase Intent (per click
through) [Exhibit-3] 6% 2% 12%
Purchase Intent (per impression) 0.1800% 0.02800% 0.08880%
Total Purchases 30960 15960 4440
Total ad costs 1720000 430920 260000
Cost contribution per ad 55.55555556 27 58.55855856
Contribution per sale [Exhibit -4] 150 45 165
Revenue 4644000 718200 732600
Profit 2924000 287280 472600
ROI 170% 67% 182%

This clearly shows MedNets profit for Windham would be almost 10 times as high as
Marvel, thus establishing its superiority.

Cholesterol.coms Challenge

Cholesterol.coms Properties
Condition-specific website
Provided interactive tools to the visitors to record specifications
Almost actual diagnosis/ prescription
Fewer side-effects than competitors

MEDNET.COM CONFRONTS CLICK-THROUGH COMPETITION 3

 Used CTR for advertisers instead of CPM

Evaluation of Stakeholder Needs

Alternatives available to MedNet.com

1. Take a more prescriptive and diagnostic role
2. Bring alternative health into its purview
3. Develop and manage employer websites

Let us analyse the pros and cons of each option to arrive at the best suited
option.

Option 1: Take a more prescriptive and diagnostic role

PROS CONS
Less dependent on advertising Problems with regulations
revenues Audience audit showed majority
More focused value proposition clicked on both general and
can help to face niche condition specific information (Page
competitions like Cholesterol.com 7)
Likely to increase sales Audience requiring general health
conversion rate information may be lost
More focused targeting of ads can Only 25% in the health website
be possible behavior survey would pay for

4 MEDNET.COM CONFRONTS CLICK-THROUGH COMPETITION

 More profitable and loyal
customers can be acquired
Stakeholder Need Analysis
Option 2: Bring alternative health into its purview
PROS
Higher reach can be achieved by
attracting new visitor base
No. of clicks will increase
New advertising revenues from
other than pharmaceutical firms
can be gained
CPC based model can be used
Stakeholder Need Analysis
Option 3: Develop and manage employer websites
PROS
Employers are moving towards
MEDNET.COM CONFRONTS CLICK-THROUGH COMPETITION
content (Exhibit 3)
Only 50% would use in case of
registration requirement (Exhibit 3)
CONS
MedNet visitors are avid researchers
and spent a considerable amount of
time there for its reliable information
(Page 4)
With alternative health information
the original target groups value will
be decreased and they can deflect from
the website
Targeted advertising can not be
achieved as user behavior can become
unpredictable
Trustworthiness can get diluted due to
presence of unscientific information
For Alternative health information
seekers pharmaceutical ads may
become irrelevant
CONS
It can be a challenge to convince
5
 intranet based healthcare solution
and thus MedNet needs to be
present in this segment eventually
If they can successfully employ,
new customer base can be gained
which will increase reach
Clicks can also be increased
Targeted ads can be employed
and this can increase sales as well
for advertisers
Trustworthiness can be
established
Least radical change in terms of
company values
Profitable customers can be
acquired
employers to introduce
pharmaceutical ads and thus
separate business model needs to
be introduced
This can create some opposition
in the industry as this can reduce
overall health care costs that can
harm the entire industry
There can be overlap of existing
customers and that can harm the
core business through
cannibalization
There no new value addition for
existing customers
Long term loss as it does not
venture into new growing
segment such as alternative health

Stakeholder Need Analysis

Thus, option 3 appears to the best fit for MedNet.com given its current scenario.
Option 3 takes care of the various stakeholders better than the others and can be
adopted for the long run.

6 MEDNET.COM CONFRONTS CLICK-THROUGH COMPETITION