MedNet, a trusted health information website, faces declining advertising revenues as competitors like the search engine Marvel adopt contextual advertising models. Windham, a pharmaceutical advertiser, is considering shifting its ad dollars from MedNet to Marvel. The case analyzes whether MedNet provides better value to Windham than Marvel. The analysis shows MedNet has higher click-through rates and profit margins for Windham compared to Marvel. Additionally, MedNet is compared to condition-specific sites like Cholesterol.com and different strategies are evaluated, with building on MedNet's trust and integrity found to be the best approach.

1. MEDNET.COM CONFRONTS
“CLICK-THROUGH”
COMPETITION
Harvard Business School Case
Ashish Soni
IIT DELHI

2. MEDNET

3. MEDNET
The award-winning site was considered the
best health website for trusted, evidence-
based, consumer health information.
Advertisements on MedNet proposed specific
and immediate solutions to health concerns.

4. MARVEL

5. Hugely successful search engine.
visitors.

7. Heather
Bill
Mahria
CMO of Windham
Vice President of Consumer Marketing at MedNet
Vice President of Business Development at MedNet

8. PRICING
STRATEGY

9. PRICING STRATEGY OF MEDNET
Traditional Banner Advertisement, charging
pharmaceutical advertisers on a
($100 per 1000 impressions)
Also charged for each .

10. PRICING
STRATEGY

11. PRICING STRATEGY OF MARVEL
Contextual, or
Advertisers paid website owners for click-
throughs and not for impressions
Charged for each

12. Windham was considering shifting its MedNet’s ad dollars to Marvel.
Mathematical analysis for proving that MedNet is giving better value to Windham
Competition with general interest websites like Cholestrol.com
Analysis to the three possible outcomes

13. OBJECTIVES OF THE CASE - 1
To use quantitative analysis
methods to compare a

14. Data Analysis and interpretation and
decision making.

16. ISSUES
1. Is Windham getting from MedNet
than from Marvel? If yes then how?
2. Is MedNet General interest websites
like cholestrol.com? If yes then how?

17. Is Windham getting
better value from
MedNet than from Marvel? If
yes then how?

19. COST DUE TO IMPRESSIONS
Advertising
Venue
MonthlyVisitors
(Given)
Impressions
Windham
received
(Given)
Cost (for
imrpression)
(Given)
Total ad costs
(from
impressions)
MedNet 4.3 mm/month 17.2 mm $100 CPM $ 1.72 mm
Marvel Search 19 mm/month 57 mm $ 0 $ 0
Case page 4

20. COST DUE TO CLICK-THROUGHS
Advertising
Venue
Monthly
Visitors
Click-
Throughs
(Given)
Cost
(for click-
throughs)
(Given)
Click-
through rate
(Given)
Total ad costs
(from click-
throughs)
MedNet 4.3 mm/month 516000
$ 3.33 per
click-through
3% $ 1,718,280
Marvel Search 19 mm/month 798000
$ 0.54 per
click-through
1.4% $430,920

21. TOTAL AD-COSTS
Advertising
Venue
Monthly
Visitors
(Given)
Total ad costs
(from click-
throughs)
Total ad costs
(from
impressions)
Total ad costs
MedNet 4.3 mm/month $ 1,718,280 $ 1.72 mm $ 3,438,280
Marvel Search 19 mm/month $430,920 $ 0 $430,920

23.  Did you click on a sponsor’s advertisement today?
3%Yes
 For those who clicked on the sponsor’s advertisement, did you make
a purchase?
6%Yes
 Have you clicked on a health advertisement at a search engine
website?
1.4% Yes
 For those who clicked on a health advertisement at a search engine
website, did you make a purchase?
2%Yes

25. Advertisement placement Estimated contribution per sale
General interest website $ 48
Search engine $ 45
Healthcare website $ 150

26. Advertising
Venue
Click-
throughs
(Given)
% of people
buying
(Given)
Total number
of people
buying
Estimated
contribution
per sale
(Given)
Total
contribution
MedNet 516,000 6% 30,960 $ 150 $ 4,644,000
Marvel 798,000 2% 15,960 $ 45 $ 718,200
Exibit 2 Exibit 3 Exibit 4

27. Advertising Venue Total ad costs Total contribution Profit Margin
MedNet $ 3,438,280 $ 4,644,000 $ 1,205,720
Marvel $430,920 $ 718,200 $ 287,280

28. Click-throughs of are as strong as that
of
Windham is for clicks from Marvel.
Profit margin of Windham from is
clearly greater than that from

29. ISSUE
Is MedNet better than
General interest websites
like cholestrol.com? If yes
then how?

31. POSSIBILITY 1
Take a more prescriptive, diagnostic posture
toward site visitors—treating them, as
Cholesterol.com did, almost as patients.Then
they could charge for content and be less
dependent on advertising revenues. But
would MedNet’s board stand for this more
aggressive approach to dispensing medical
information?

32. POSSIBILITY 2
Bring alternative health information to the
site, starting conservatively (perhaps with
scientific studies of acupuncture) and slowly
becoming more liberal. But would this help
the problem of flattening advertising
revenues from pharmaceutical firms like
Windham?

33. POSSIBILITY 3
Take a more prescriptive, diagnostic posture
toward site visitors—treating them, as
Cholesterol.com did, almost as patients.Then
they could charge for content and be less
dependent on advertising revenues. But
would MedNet’s board stand for this more
aggressive approach to dispensing medical
information?

34. POSSIBILITY 1 REJECTED
Take a more prescriptive, diagnostic posture
toward site visitors—treating them, as
Cholesterol.com did, almost as patients.Then
they could charge for content and be less
dependent on advertising revenues. But
would MedNet’s board stand for this more
aggressive approach to dispensing medical
information?

35. SUPPORTING POINTS
Many of the visitors want
information free of cost, therefore
charging for content would repel
potential customers and decline
the business

36. SUPPORTING POINTS
It may decline the revenue and
business of the site as majority or
visitors click on both condition-
specific pages and general health
information (given on page 12 - most
viewed pages).This may reduce the
activity in the site

37. SUPPORTING POINTS
It may come at risk of violating
both state and federal government
regulations regarding diagnosis
conditions and prescribing
treatments.

38. POSSIBILITY 2 REJECTED
Bring alternative health information to
the site, starting conservatively (perhaps
with scientific studies of acupuncture)
and slowly becoming more liberal. But
would this help the problem of flattening
advertising revenues from
pharmaceutical firms like Windham?

39. SUPPORTING POINTS
Alternate health audience will not
click on a pharmaceutical as Most
of them don’t trust pharmaceutical
companies or Western medicine.

40. SUPPORTING POINTS
MedNet’s content is provided and
reviewed by the experts due to which
people trust their articles. And
alternate approaches may have
discrepancies as they don’t have
qualified professional for these fields.

41. SUPPORTING POINTS
This approach will also not help in the
problem of flattening advertising
revenues from pharmaceutical firms
like Windham, as Windham is more
about authentic medicines rather than
alternate approaches.

42. POSSIBILTY 3
Build on their greatest strength—their
integrity and trustworthiness—as well as
their web business expertise, to evolve
into a developer and manager of employer
websites. But would employers let them
introduce pharmaceutical advertising? If
not, wouldn’t they still lose in the long run?

43. SUPPORTING POINTS
It is very easy,TRUSTED and informative website for
non-pro consumer audience.
The content was developed by 24 journalists,
designers, doctors and administrators
It is reviewed by medically trained journalists.

44. SUPPORTING POINTS
According to data provided by the case
85% of the people believe that
advertisers at MedNet are more likely to
provide them with useful remedies and
information than advertisers found on
websites that don’t adhere to the same
evidence-based standards.

45. SUPPORTING POINTS
25% of the people decide to go online
to find health information on MedNet via
search engine like Marvel,etc which has
19 million visitors per month, So
people’s knowledge about MedNet is
evidently growing and thus more people
are getting connected.

46. SUPPORTING POINTS
Also 93%of the visitors claim
that they will return next time they
need medical information to
MedNet.

47. SUPPORTING POINTS
MedNet board members also perceived that
some condition-specific sites(e.g.,
cholestrol.com) came dangerously close to
diagnosing conditions and prescribing
treatments for their visitors, and thus were at
risk of violating both state and federal
government regulations (and the laws of many
foreign nations) that required medical advice to
be dispensed in person by a licensed
physician.

48. SUPPORTING POINTS
Also general interest sites are very
condition specific whereas people
seem to be fickle minded as given
in case than people of MedNet
stayed long, explored avidly,
clicked around to clarify
symptoms.

49. SUPPORTING POINTS
According to the data people value
the integrity and trustworthiness of
MedNet. Hence most will follow it
and even become repeated
visitors.

50. WOULD
RUN?

51. Employers wont let them introduce
pharmaceutical advertising as MedNet
would adversely affect their business
and may also attract their potential
customers.

52. MedNet would thus lose its potential
employers and thus its business may
decrease drastically.
If not, MedNet wouldn’t lose in the
long run because the contribution per
sale provided by MedNet is far greater
than that provided by any other site

53. Advertisement placement
Estimated contribution per sale
(Given)
General interest website $ 48
Search engine $ 45
Healthcare website $ 150
So more employers will like to associate with
MedNet for the profitability of their business.

54. Also due to its trustworthiness and
authenticity, more employers will get
connected.

55. These slides were created by Ashish
Soni, IIT DELHI, as part of an internship
done under the guidance of Prof. Sameer
Mathur (www.IIMInternship.com)