MedNet.com Case Review

1.) If Internet media is so measurable, how can Heather Yates and Bill Bishop be in such a predicament?

Yes, internet media is measurable but there are some parts (like reliability of the site, the perception of the web site visitors… and so on) that are not. Mednet's predicted ad success is measured through qualitative rather than quantitative ways. Due to the type of online company they are, they rely on Click-per-thousand impression (CPM). Mednet's user trusted website (reliable content, free scientifically based articles, evidence- based, and consumer health information) attracts committed customers. Competitors like Marvel have more of a general interest website, in which it justifies measuring profits by click through rate (CTR). Mednet's predicament was that they had to prove to Baker what they were offering, although not quantitatively strong, would produce higher profits through serious customers. Since Mednet fully relied on advertisements for profits, they had to convince advertising companies that their business model would provide very competitive sales over the long run.

2.) What does an advertiser want? Sales, leads, brand awareness? What are the best metrics for measuring these?

It depends on what is more important for an advertiser, cheaper click-throughs or good sales leads that bring real sales dollars. Advertisement is a way of leaving impression in customer’s minds (brand awareness), which hopefully will result in lucrative and repetitive leads and increasing sales revenue. Leads are created through brand awareness. But what good is a lead (click throughs) if it doesn’t land a solid sales figure? As we saw in the case, Windham wanted to be charged by CTR, thinking this was the way to measure potential visitors ready to make an order. Yates proved to Windham that impressions bring in revenue over the long run, and this type of brand awareness is what they want. Ultimately advertisers want the conversion of ad-dollars to sales figures, which is the act of making purchase, repetitive if possible, from the ad-sponsor. They also want their customers to market the company through word-of-mouth and social networking.

Finding the best metrics for advertisers should be according to different needs of companies:

A) CPM (click-per-thousand impression)
For products or companies that are newcomers in perspectives of customers are suitable to use CPM if they put raising brand awareness as their first priority.

B) CTR (click-through rate)
If an advertising banner was delivered 1000 times and only 10 people clicked on it, then the CTR is 1 percent. However, this metric would be incorrect if “click fraud” happened or if one person clicked on the same advertisement ten times.

C) PPC (pay-per-click)
PPC is commonly used nowadays on search engines, blogs, social network or some specific web pages. Aside from traditional banner ads, keyword advertising makes it easier and accurate to reach the target customers. Although it still may cause “click fraud,” PPC is the best metric for advertisers with tight budget

3.) What specific consumer behaviors determine whether or not a business model produces the results an advertiser wants?

Since there are different consumer behaviors depending on the business model we will discuss the 3 companies from the case.

A) MedNet.com:
If Mednet's business model is of targeting the "in crisis" customers then number of site visitors/sales should, if profitable, be an attractive result of customer behavior.
Another wanted behavior is Mednet customers spending more time browsing through medical information to deal with health problems. Once they visit MedNet, they click around the advertisements to find a better solution (tips as well as medicine). As Yates said: “our audience is attracted to your products, and we have reason to believe that our advertising partnership adds to your bottom line” (pg;6) We look for attractive customer feelings, of ones who are stimulated psychologically and ready to buy the products.

B) Marvel:
Initially, they wanted customers to search on subjects related to health and be led to a site that could advertise a specific drug. These search engines serve as a starting point for visitors to browse through general health-keeping information. Due to vast audience and free impressions offering to advertisers, Marvel got more click-throughs and posed a threat toward MedNet.

C) Cholesterol.com:
Cholesterol.com provided deeper health information which targeted at remedies for cholesterol problems only. Visitors could store their data and reviews; this behavior is attractive because it could eventually lead to customers marketing a company’s drug. If customers are discussing cholesterol issues online they probably also discuss it among personal contacts. The single focused business model as well as its focus on education has created these customer behaviors.

They obviously really want consumers to purchase an item after clicking on the advertisement. They also want consumers to recommend their product to friends and family. They want customers to market the quality and satisfaction to others.

4.) What steps can MedNet take to address emerging competitive threats?

Although content acquisition makes up 34% of total expense, MedNet should still focus on enriching its contents on alternative therapies, and scientifically based solutions with legal disclaimers. (To compete with U.S. National Library of Medicine and WHO)

Technology support is 12% of the expense. They should focus on changing the looks of the site. According to the case, viewers are divided into Western-Med based (chemical ingredients) and Alternative Health (organic, natural ingredients) based. MedNet can create two versions of the site (like AMD and ATi website) under the same URL for both customer bases. They should provide herbal medicine therapies, its related news and findings, and information for the original customers as well in easy to view and navigate way.

User friendliness and customer incentives are important factors as well. Although the survey revealed that 60% of viewers aren’t in favor of leaving personal information on the site, but the function of a “disposable” entry like blood pressure, body weight information that follows the user during the search will be seen as convenience. What’s more, as long as it doesn’t severely violate any related regulations, recommending suitable treatment would also mean another “user-friendliness”. They could offer memberships which would offer discounts, enlarged article accessibility and personal profile and feedback service.

Last, sales and marketing expense stands for 27% of the total expenses. They should look for alternative income methods. Besides selling contents, MedNet, by designing seamless framework, can sell doctor’s prescription and necessary drugs for the prescription (NTU Hospital website lets patients to fill out a survey like sheet and diagnose one’s health condition). MedNet could also offer lower-cost medical information service for companies. With their strong business network, MedNet should come up with pharmaceutical suppliers and medical doctors for those companies at cheaper price.

In the long run, MedNet should project for becoming global online pharmacy with solid information that sells medicine like Netflix does with DVDs, and prescribes doctor’s treatment like hospitals do for patients. They should expand internationally. They should also create ties with hospitals, pharmacies, corporations and NPOs.
They have to follow the new trends of advertising
• Try to stay ahead of their competitors and always keep their eye out
• Value proposition
• Increase the content of the site (again health related) so that by enlarging the subjects they may get more advertiser opportunity
• Enlarge their network