Augustine Fou- 2 -Executive SummaryTHESIS• WebMD may experience continued “softness” despitethe uptick due to the management reshuffle afterearnings.
Augustine Fou- 3 -Executive SummaryTHEN• WebMD has been the beneficiary of traditional ad dollars from pharma/healthcareadvertisers shifting to digital, because it was the “only game in town” in terms ofcredible, medical information (vetted by doctors)NOW• Now, there are other credible sources of medical information online (e.g.MayoClinic.com) and users’ default habits mean they start with Google to searchfor medical info online, rather than go straight to WebMD.com• As free organic traffic softens, WebMD has to buy traffic via display ads andsearch ads to continue to prop up traffic in order to generate “inventory” to sell adimpressions• Display ad CPMs are also trending down industry-wide due to a variety of factorsincluding much lower cost inventory from social channels like Facebook• WebMD’s business model relying on display ads and CPM-based pricing is out ofsync with the industry trend towards “performance” (e.g. CPC and CPA)
Augustine Fou- 4 -Top 10 Medical WebsitesApril 2013Source: Experian Hitwise, April 2013WebMD.com isonly 10.5% shareof visits now
Augustine Fou- 5 -Unique User ComparisonSource: Compete, April 2013 DataNext 3competitorscombined arelarger thanWebMD
Augustine Fou- 6 -Pageview ComparisonSource: Compete, April 2013 DataWebMD is theonly one in decline
Augustine Fou- 7 -Ranking Organic KeywordsSource: iSpionage, April 2013 DataThe number of ranking organic keywords (shows up onpage 1 of results) is helping WebMD maintain site traffic.
Augustine Fou- 8 -WebMD Buys TrafficLarge number of display ads driving traffic to themselves.
Augustine Fou- 9 -Shifting to Lower CPM AdsBig Portals Ad Networks Facebook10’s of dollars 1’s of dollars 10’s of centsAdvertisers are shifting allocation to get more impressionsLarge audiencePublisher/portalhas more powerLots of long-tailsmall websitesAdvertiser hasmore powerMassive number ofimpressions“Junk” quality andsuper-low pricesCPM0.1% 0.01% 0.001%CTR
Augustine Fou- 10 -Digital Used for PerformanceSource: IAB 2012 Annual Report
Augustine Fou- 11 -Related ArticlesMeet the Most Suspect Publishers on the WebBy: Mike Shields, March 19, 2013State of Display Ad Market 2013By: Augustine Fou, April 17, 2013Botnet Traffic Clicks Cost Advertisers Millions in WasteBy: Augustine Fou, April 29, 2013Future of AdvertisingBy: Augustine Fou, March 15, 2013Augustine Fou- 11 -
Augustine Fou- 12 -Dr. Augustine Fou – Digital Consigliere“I advise clients on innovating theirbusiness to stay ahead of trends andreduce their reliance on single forms ofrevenue (e.g. display ads in the case ofWebMD).”FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)MCKINSEY CONSULTANTCLIENT SIDE / AGENCY SIDE EXPERIENCEPROFESSOR AND COLUMNISTENTREPRENEUR / SMALL BUSINESS OWNERPHD MATERIALS SCIENCE (MIT 95) AT AGE 23@acfouClickZ Articles: http://bit.ly/augustine-fou-clickzSlideshares: http://bit.ly/augustine-fou-slidesharesLinkedIn: http://linkd.in/augustinefou
Augustine Fou- 13 -WebMD.com Website TrafficDespite user and visit growth but the all-important metricof pageviews continue to decline slightly.Source: Compete, April 2013 Data
Augustine Fou- 14 -WebMD.com User CharacteristicsAverage stay, visits per person and pages per visit haveall been consistently trending downSource: Compete, April 2013 Data