MedNet.

com Confronts ”Click-Through” Competition - Case Study Analysis

Group 7 (Section A)
1. What does an advertiser want? Sales, leads, brand awareness? How to measure these?
An advertiser generally wants to draw the attention of the potential customers to its
advertisements in public media and sell its products. Each advertiser depending on its
objectives decides the metric to measure its growth. The advertiser usually wants to improve
sales and market share. Advertisements are not directly related to sales but can be used to
increase sales by generating leads and increasing brand awareness. In fact sales, leads and
brand awareness are related to one another.
Advertisers usually focuses on short term goals such as increasing productivity and sales and
the long term goals include increasing market share and improving brand awareness.
Sales can easily be measured from financial data (such as sales revenue or turnover). Here
click through rate can be used to measure the effect of the advertisement. The redeemed
coupons sent back to the company by the pharmacies can be also used to measure sales. It
can also be used to measure market share. Sales leads can be measured using the number of
clicks or by coupon barcodes. Brand Awareness, however is difficult to measure as it is linked
with feelings and impressions of the customers. It can be measured by either a market analysis
or carrying out a market research. The number of impressions can be a useful metric for
measuring brand awareness.

2. Based on exhibit 3 and 4, identify the specific consumer behaviours and map it to answers
to Ques 1 about measurement.
Customers are more likely to make a purchase if they see the advertisement on a television
or in a newspaper and found the information credible than the sponsor’s advertisements. This
is further lower for health advertisements at a search engine website. Also, customers mostly
preferred search engine and online advertisement to find health information on MedNet. It
was also found that majority of the users would not allow MedNet to store personal
information about their health condition. About three-fourth of the users would not like to
pay for access to any content on the site. Also, half of the visitors would not prefer to use the
site if they had to register to obtain some information as per the survey. Customers mostly
viewed search page followed by advanced medical search, weight control center and so on.
As per the data, sponsor’s advertisement has a higher click through rate than health
advertisement at a search engine website and newspapers.

3. What value to the visitor does a general interest site contribute that a niche site can’t?
Which is more defensible business model?
 General interest sites attract larger audience as they provide a wide range of
information on different health issues. Thus they provide more value to the customers
than the niche sites who have information only for the specific area it is positioned
for.
 General sites are more known to the general public and can be used to explore and
clarify symptoms. However, niche sites are mostly used by professionals or people
who are certain of their medical condition.
 The material in General sites is easier to understand even for a layman than the niche
sites.
  Click through rates are tended to be half as high on a general interest site than focused
content site.
A niche site business model is more defensible in nature. For a general interest site, a
niche site can very easily take away their market share for a specific medical area. A
general interest site has much more competitors than a niche site and will be always
under the risk of being taken over by niche players.

4. Calculate and submit the values as per formula given below for MedNet, Marvel and
Newspaper (refer Exhibit 2,3, and 4).
a. Sales profit per advertising campaign = (#of impressions Windham received X Click-
through rate X % who buy rate X avg sale’s profit margin) – advertising cost
b. ROI = sales Profit/Advertising Cost
Mednet
Sales Profit ={ (17.2 x 0.03 x 0.06 x 150) – 1.72} x 106
=2924000

ROI = 2.924/ 1.72

= 1.7 or 170 %

Marvel
Sales Profit =(57 x 0.014 x 0.02 x 45) x 106 - 430920
= 287280

ROI = 287280/ 430920

= 66.67 %

Newspaper
Sales Profit =(5 x 0.0074 x 0.12 x 165) x 106 - 260000
= 472600

ROI = 472600/ 260000

= 181.8 %