Shelley's writeup

Network Marketing CASE #2
MedNet.com Confronts “Click-Through” Competition

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

Heather Yates and Bill Bishop‘s predicament is based on numbers they found, using cost-per-thousand impression (CPM) and click-through rate (CTR) measuring the internet traffic and effectiveness of advertising on websites. However, they too much relied on numbers and might miss other possible metrics. MedNet’s business model was providing free content to audience and generates profits from advertising. Therefore, MedNet had to differentiate its self from other sites and to draw as many audiences as possible.

MedNet.com’s strategy was different from Marvel and Cholesterol.com mainly on the coverage of pharmaceutical information types it offered and online target customers. Most visitors turned to MedNet only when “in-crisis” and clicked around to research specific symptoms and those eyeballs became the source for MedNet to gain profit by counting CPM. For MedNet advertisers, CPM cost them almost six times higher than using CTR as Marvel provided; furthermore, consumer audiences’ click-through sometimes did not promise sales revenue. In this case, advertisers tend to find a cheaper platform but with more brand awareness and visitors. And it shows that Yates and Bishop analyzed the overall environment merely on numbers they got and thus put themselves in such a predicament.

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

Factors an advertiser would take into consideration when selecting websites include method of measuring success of online advertising in order to lower the costs, eyeballs, credit of the websites, types of potential consumer audiences surfing the sites, etc. Those concerns are premise for advertisers to reach the purpose of gaining both sales leads and also brand awareness. Generally speaking, long-term goal for a company is to generate profit. More sales revenue and the lower costs and expenses bring more profit so that companies tend to promote their products through advertising for the purpose of boosting sales.

MedNet.com served as an intermediary for potential customers and suppliers; that is to say, provided a platform for sellers and buyers to trade. If an advertisement with well-known company selling something which customers are familiar with, then the advertisers will put more efforts on increasing sales leads. On the other hand, raising brand awareness will be top priority for a start-up company. And once people recognize the brand name, sales leads and brand awareness will be positive correlative just as snowball effect.

Finding the best metrics for advertisers should 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 make it more 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?

Despite all three websites provided free pharmaceutical information to visitors and hoped to attract more advertising banner as possible, their business models to profit from advertisers sales are not the same. In this case, there are three types of business model with different consumer behaviors as follows:

A) MedNet.com
People go to MedNet to search certain symptom only when they are in crisis and tend to spend longer time on browsing through medical information to deal with their or their family‘s health problem. Once they visit MedNet, they click around the advertisements to find a better solution.

B) Marvel
Such search engine served 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 usually know specific diseases they got and then go to the website to find further instructions. Unlike MedNet.com and Marvel.com, Cholesterol.com gave more details as well as professional knowledge about the issue. To distinguish from MedNet, visitors could store their data and got recommendations or other bonus from the website.

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

Compared to other two competitors, Marvel had a vast audience and provided impressions for free while Cholesterol.com provided customized service for their target customers. Despite MedNet offered trustworthy information for consumers, it’s not enough to compete with Marvel and Cholesterol.com. Followings are some suggestions for MedNet to create more value-added service for their existing and potential consumers:

A) Create a interactive platform through:

a) Encourage visitors add themselves as a MedNet member.
b) Members can subscribe different categories e-paper selected by MedNet.
c) Members can get coupons and extra discount if they do online-purchasing.

d) Members can create personal profile and data on MedNet to get more related information and knowledge.


B) Cooperate with other organizations such as:

a) Hospital or pharmacy
Strengthen the links among such organizations to get more accurate and professional information.
b) Company
Provide employees up-to-date health information through the internet.
c) Non-profit organization or charity
Targets on health-keeping related NPOs or charities by supporting and promoting their ideas on MedNet. Then put MedNet’s link on their official websites so that they could create a win-win situation.

C) Establish a feedback system
Set up an online forum for members to discuss certain topics or issues. The forum serves as a platform for members to share their experiences such as feedbacks or comments on products. Also, if a member raised a question on that forum, his or her problem might be solved by other members. Such family-bound system may increase the return rate of MedNet members even they are not “in crisis.”