Case 3 Analysis: Mednet.

com Confronts “Clickthrough

competition”

Submitted by: Group 11

Anirudh Shekhawat (PGP/23/377)
Reman Saini (PGP/23/165)
Shashi Kant (PGP/23/478)
Sushma Kumari (PGP/23/238)
Suyash Agrawal (PGP/23/060)

Q1. What does an advertiser want? Sales, leads, Brand awareness?

What are the best metrics for measuring these?
We believe that among the given options, advertiser wants to increase sales and
brand awareness. Since NetMed is a digital platform, the various stages of sales
funnel can be described as follows:

Leads: Number of
visitors on NetMed/
impressions created

Prospects: Traffic
to Windham by Brand Awareness
Click-Through-
Rate Ads
Customers:
Actual Sales
at Windham

The biggest advertiser of MedNet, Windham, wants to generate profits by increasing

its sales through click through rate of visitors by advertisements and by increasing its
brand awareness. But, another competitive of MedNet, Marvel has highest number
of monthly visitors and will successfully reduce advertising cost of Windham by
charging on actual clicks of advertisements at a lower price. At the end, Yates and
Bill convinced their biggest advertiser that Marvel is only providing them a lots of
leads, but their chances of getting converted into prospects or further customers is
very low. This would impact their sales as well as brand awareness. As Baker
agreed on this, we can clearly infer that sales as well as brand awareness matters
most for an advertiser.

Website credibility, click-through Rate and Visitor’s return rate are the metrics
identified from the case that best describes the efficiency of advertisements to
increase brand awareness and sales. Other metrics that can be considered by
advertisers are Customer Acquisition Cost, Revenue per dollars of sales expense,
Macro conversion rate, Bounce rate, Number of unique visits etc.

Q2. What specific consumer behaviours determine whether a business

model produces the results an advertiser wants?
Here, the target consumers are those who are interested in medical issues. They
may browse websites to seek the required information by searching the issues on
search engine or on a specific website like MedNet.com. So, consumers can be
divided into 2 groups:

- First group consists of consumers who are actually looking for some
medicines which could cure their illness, who may click on the advertisement
related to what they are searching for and hence can generate revenue for the
advertisers.

- And the second group consists of those who browse websites not for any
specific reason but just because they are interested in some medical issue.
These consumers are don’t generate immediate revenues for the advertisers
but are left with an impression and hence can search for the advertised brand
in future when they have any such requirements and will generate revenues in
future for advertisers.

MedNet has a business model which is:

- Free of charge to consumers for medical-related information

- Charge fees for advertisement

- Charge by CPM

Whereas Marvel charges by Cost per click (CPC)/ Click Through Rate (CTR)

So, some of the factors that can be considered by advertisers could be:

- Return on Investment (ROI)

- Click Through Rate (CTR)

- Brand awareness

- If visitors who came “in crisis” also returned when they faced the crisis next
time
Q3. What is best argument Heather Yates can make to justify charging
Windham Pharmaceuticals for impressions instead of click-throughs?
Does she have acceptable alternatives?
Soln. For the best argument, Heather Yates needs to show some excerpt from data
to justify charging Windham Pharmaceuticals for impressions instead of click-
through. The data is portrayed as below:

Comparative study between MedNet, Marvel and U.S. Newspaper

Advertising Venue MedNet Marvel Search U.S. Newspaper

Monthly Visitors 4,300,000 19,000,000 2,500,000
Impressions Windham Received 17,200,000 57,000,000 5,000,000
Cost $100 CPM $.54 per click-through $260,000/2-day ad
Click-throughs 516,000 798,000 37,000
Click-through Rate 3% 1.40% 0.74%
Cost per Click-through $3.33 $0.54 $7.03
Total Ad Costs $1,720,000 $430,920 $260,000
Purchase Conversion 6% 2% 12%
Total purchases 30,960 15,960 4,440
Revenue Per Purchase $150 $45 $165
Total Revenue $4,644,000 $718,200 $732,600
Profit $2,924,000 $287,280 $472,600
ROI 1.70 0.67 1.82

Also, she does not have any acceptable alternatives other than this as all other
options cannot generate profits at this scale and if she goes by Click-Throughs, an
approximate decrease of about 80% can be seen in the profit of the firm, which
would not be acceptable.

Q4. What value to the consumer does a general interest site contribute
that a niche site can’t? Which is the more defensible Business model?
Soln. There are multiple values which can be contributed by a general interest site
than cannot be contributed through a niche site, such as:

- The general site can be used by all types of person at all stages of their life,
whereas, for a niche site, only a set of consumers will be there.

- The general site gives an idea of all type of diseases and related information,
whereas, a niche site will only talk about a set of diseases, or symptoms or
conditions.
- General site offers a wide range of offerings to their consumers to choose
from, allowing multiple companies to cross-sell their products, which cannot
be possible in a niche site.

As per our team, a general site will be a more defensible model as compared to a
niche site due to the following reasons:

- In a niche site, the consumers are already well aware of their problems and
conditions and hence, if any wrong medication or anything is suggested, it can
attract unnecessary attention as well as backlash.

- In a general site, a generic and general medication can be suggested for the
mild problems of which further consultation may not be needed and only these
types of drugs can be prescribed also. If any disease specific drug is
prescribed by a niche site, then a question on authenticity as well as doctors
behind the channel can come into picture.

Q5. What steps can MedNet take to address emerging competitive

threats?
- To analyse the market situation and competitive analysis, Mednet could
conduct Porter’s five forces analysis to see which are the main competitors
and players in the market. According to the case these players are Marvel and
Cholesterol.com, but there are more like UN National Library, WHO website,
and clinicaltrials.com. They will be able to find that Marvel is focusing on cost
leadership to attract potential customers with very low costs and a big
audience and Cholesterol.com has targeted in a niche market, which leads to
a differentiation strategy.

- Whereas people trust Mednet website and they use it when they are in a
crisis, viz. why Mednet should include alternative health information and
scientifically based solutions on the website with legal disclaimers and should
try a more perspective role by treating customers. It will let the existing
customer base to get better understanding about their health condition by
starting conservatively at a lower cost, help advertising and compete with
competitors.

- In addition to that they can also try additional user friendly and customer
encouragement programs like memberships which would offer discounts,
personal profile, and feedback service.