MedNet.com faces challenges to its revenue model from a competitor called Marvel. MedNet generates most of its revenue from advertisements using a cost per impression (CPM) model. However, Marvel uses a pay per click (PPC) model where advertisers only pay for clicks, not impressions. This is causing MedNet's largest advertiser, Windham Pharmaceuticals, to consider shifting ad spending to Marvel. If MedNet loses Windham's business or has to change its revenue model, it could lose a major source of revenue. Strategic options for MedNet include taking a more diagnostic approach to visitors, charging for content subscriptions, expanding offerings and languages, and improving customer relationships to maintain trust and integrity.

1. MedNet.com Confronts
“Click-Through” Competition
Harvard Business School Case
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Submitted by: Piyush Gupta
B.Tech (CHE)
IIT-Kanpur

2. What is MedNet.com
a Company Delivering Health Information free to consumers.
Who is Heather Yates
Vice President (Business Development) @ MedNet

3. Heather Yates
Vice President (Business Development) @ MedNet
Maria Baker
Windhram CMO
Bill Bishop
Vice President (Consumer Marketing) @ MedNet
Who are the Players?

4. What is the Present Situation?

5. Situation Analysis
MedNet’s Chief Advertising Company(Windham Pharmaceuticals)
is asking for Change of underlain Rules in their Revenue Model
Widham Planning to shift its MedNet ad Dollars to Marvel, a Competing
Website which gives more Flexibility to their Advertising Companies with
their different Revenue Models
In Case MedNet either Loses Widham or Changes it’s Model as being
asked for, in both Cases MedNet loses a Behemoth Share of its
Current Revenue

6. Scientifically based Medical Information to a Non-Professional
Consumer base Free of cost.
Trusted and Evidence Based Information.
Accessible, User Friendly and Vividly Presented Content
Developed by Highly Trained Professionals.
What Places MedNet in a Standout Position from
its other Competitors?

7. Threats to MedNet (Competitors)
US National Library of Medicine
World Health Organization
Cholesterol.com
ClinicalTrials.com
AlternativeHealth.com
Marvel( The Most Important One)

8. Illustrate the Design, Implementation, and
Interpretation of Research Surveys.
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
Objective of this Case

9. Revenue
Advertisement Income: $12,000,000
Expenses
Purchased Content: $3,700,00
Sales and Marketing: $3,000,00
Tech-Support: $1,300,00
General Administration: $3,000,00
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Net Income: $1,000,000
MedNet’s Income Statement,2006

10. CPM(Cost per thousand impression) Basis
One impression meant 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
MedNet’s Revenue Model

11.  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.
How Marvel Posed a Challenge to MedNet?

12. This Proved to be the main Reason, some
advertisers began to ask other sites to charge only
for click-through sales model.
Ex: MedNet’s & Windham
Case

13. Insights from the
MedNet’s Web-Traffic
Analytics Reports and
Surveys.

14.  Advertisers at MedNet are more likely to provide me with useful remedies and
information than advertisers found on websites that don’t adhere to the same
evidence based standards
Strongly Agree: 85%
Strongly Disagree: 15%
 Will you return to MedNet next time you need Medical Information
Yes: 93%
No: 7%
 if you saw an advertisement on television or in a newspaper, would you call the
call center?
Yes: 74%
Shows visitors MedNet Visitors clicked on more pages and advertisements than general interest web
surfers
MedNet’s Visitor Survey Results(Key Points)

15. Windham Pharmaceuticals Ad. Campaign Results
Ad Venue Monthly
Visitors
Impressions
Received
Cost Click-
Throughs
CTR Total Ad.
Cost
Cost Per click
Through
MedNet 4.3mm 17.2mm $100CPM 516,000 3% $1.72mm $3.33
Marvel
Search
19mm 57mm $0.54per
click through
798,000 1.4% $430,920 $0.54
U.S.
Newspaper
2.5mm/day 5mm $260,000/2-
day ad
37,000 0.74% $260,000 $7.03

16. Advertisement Placement Estimated Contribution/Sale
General Interest Website $48
Search Engine $45
Health Care Website $150
News Paper(Via Call Center) $165
Television(Via Call Center) $75
Average Profit Margins Per Pharmaceutical Prescription
for Heart Medication

17. 1. Search Page
2. Advanced Medical Search
3. Weight Control Center
4. Pharmaceutical News
5. Insurance News
6. Advanced Pharma. Search
7. Health News Update
8. Cholesterol Controlling
9. Depression Center
10. Medical Encyclopedia Search Index Page
MedNet’s Most Viewed Pages (Top 10)

18. “If MedNet decides to Sell only Click throughs
at a rate competing with of marvel’s, their
revenue will drop by the least of 80% given that
their audience space remains the same.”
The Looming Threat: Marvel

19. MedNet’s Service Provide More actual Sales rather than just
Giving a opportunity to give Medical information.
Marvel’s audience are less lucrative to Windham as MedNet
Provides
MedNet Provides Evidences and is more User-Friendly than
Marvels, also uses Coupons Sale Confronts
What’s the Edge of MedNet over Marvel

20. Take 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 theirTrustworthiness.
Strategic Options to be implemented

21. Disclaimer
"These slides were created by “Piyush Gupta” as part of an internship
done under the guidance of Prof. Sameer Mathur
(www.IIMInternship.com)"
Piyush Gupta Sameer Mathur