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MedNet AM Case Solution
MedNet AM Case Solution
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)
Marvels Challenge
Marvel MedNet.com
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
Let us analyse the pros and cons of each option to arrive at the best suited
option.
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
PROS CONS
Higher reach can be achieved by MedNet visitors are avid researchers
attracting new visitor base and spent a considerable amount of
No. of clicks will increase time there for its reliable information
New advertising revenues from (Page 4)
other than pharmaceutical firms With alternative health information
can be gained the original target groups value will
CPC based model can be used 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
PROS CONS
Employers are moving towards It can be a challenge to convince
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.