Harvard Business School Case: Mednet.com confronts ‘click through’ competition

Sachet JainIIT Delhi

What is MedNet ?

A company delivering scientifically based health information free to consumers. Earns its profits through advertisements.

Windham Pharmaceuticals

It is MedNet’s biggest advertiser

Players from MedNet?

Heather Yates: Vice President ( Business Development) @ MedNetBill Bishop: Vice President (Consumer Marketing) @ MedNetFrank Do’nofrio: President CEO, MedNetBradley Meyers: CFO, MedNet

Players from Windham?Mahria Baker: Windhram CMO

Situation Analysis

• MedNet’s Chief advertising company is asking for change of rules in the revenue model• Widham planning to shift its MedNet and Dollars to Marvel, a Competing Website which gives more flexibility to their Advertising Companies with their different Revenue Models• In Case MedNet either looses Widham or changes its model as asked for. In both cases a loss of revenue happens.

MedNet VS Competitors

• Scientific based Medical Information to a non professional consumer base, free of cost.

• Trusted and evidence based scientific information

• MedNet Users clicked on more pages and advertisements than general web surfer does.

Objectives

• Suggest a Strategy to Survive in the Growing and Competitive Health Services Market.• Garnering better Revenues and Avoid Losing the General Customer Base and Advertising Agencies

MedNet’s Income Statement

MedNet’s Revenue Model

• CPM ( Cost per thousand impression) Basis

One impression that one visitor requested from a web-server a page that had a specific advertisement on it, hereby monetizing of ‘ eyeballs’ i.e. Site Visitors

How Marvel Posed a challenge to MedNet?

• Marvel(A highly successful search engine) Turned the Tables on its competitors by declaring that it would provide impressions for free and charge advertisers only for click throughs. • Pay Per Click Basis Revenue Model where CTR(click through rate) was measured as the number of clicks divided by total number of ad impressions delivered.

This is the major reason why other companies asked for CTR’s.

Widham’s Ad. Campaign

The Threat : Marvel

If MedNet decides to sell only click throughs at a rate competing with of marvel’s, their revenue will decrease by atleast 80% given their audience space remains same.

MedNet vs Marvel

• Mednet provides more actual sales rather than just giving an opportunity to give medical information.• It provides evidences and is more user friendly. It also uses Coupon sale confronts

Strategic options to be implementedTake a more Prescriptive, Diagnostic posture toward site visitors treating them as cholesterol.com did, almost as patients. They could charge for content like magazine/e-file Subscriptions, and be less dependent on advertising revenues. Bring Alternative Health Information to the site, like Conservative Scientific Studies of Acupuncture, Chiropractic medicines and Herbal Remedies. Going Global by presenting information in Several Languages like cholesterol.com did, this will also improve their ad. Revenues. Build Customer Relations, integrity and their Trustworthiness.

Created by Sachet Jain,IIT Delhi, during an internship by Prof. Sameer Mathur, IIM Lucknow.

www.IIMInternship.com