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Mednet Case Study

Essay by   •  November 20, 2018  •  Case Study  •  858 Words (4 Pages)  •  88 Views

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MedNet Case Study

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MedNet Case Study

  1. “The best argument Heather Yates can make to justify charging Windham Pharmaceuticals for impressions instead of click-throughs”

        First, MedNet is popular and highly trusted in the medical community. Further, its website is easy to use and offers thoroughly reviewed scientific information for free. Quantitatively, Heather could argue that visitors to MedNet’s site are often in a crisis mode, hence are more likely to make more immediate purchases than those of Cholestrol.com and Marvel (Oetting, 2015). In essence, she could make a strong case that any visitor to their site is a serious prospect for the pharmaceutical company, and is likely to be converted into a sale faster than a user from any other site. Besides, Yates could also state that unlike specific interest sites like Cholestrol.com, MedNet has no advertising boundaries for pharmaceutical companies. Therefore, Windham could advertise any other pharmaceutical product that it has or wishes to produce and get good returns on its advert investment in terms of impressions that result in sales (Oetting, 2015). In addition, given that most visits to MedNet are not accidental, and there is about 93% return rate for visitors, Heather could convince Baker that Windham can establish a long-term relationship with the users of MedNet’s website who end up buying their products (Young, 2007). That way, some would go straight to Windham’s website the next time they need similar medication, resulting in less repeat impressions on MedNet’s site, and less wastage of ad dollars. Lastly, since MedNet’s number of impressions are audited periodically by independent auditors, Heather could let Baker know that whatever the firm bills them is an exact reflection of the views on their adverts, and as past data indicates, a large fraction of these end up turning into sales. In brief, the value proposition argument is the best that Yates can make to defend its method of charging for adverts.

  1. Are there Acceptable alternatives?

        Based on the threat at hand, there are about three alternatives that MedNet could consider, only that two have serious challenges. The first is treating visitors to the site like real patients, taking health data such as blood pressure and heart rate, and charging them for content from the website. This way, the firm could be less dependent on ad revenue. However, from the survey conducted by MedNet, 50% of its visitors are not willing to provide such information, and 75% are not prepared to pay for content from the website (Young, 2007). What is more, this will not stop Windham and other pharmaceutical companies from moving to other ad websites. The second alternative is tying the website to the intranets of corporations and offering services to employees at a fee. This would make the firm lose the independence that its board values so much, and will not stop Windham from leaving. The only viable option is doing what Windham is asking and charging the company based on the click-through rates other than the impressions. However, this would mean an 80% drop in MedNet’s values if it makes this adjustment with its current customer traffic and a price that can compete with that of Marvel (Young, 2007). To overcome this challenge, it would have to increase the number of visitors to its site. One possible way of doing this is incorporating information on alternative medicine. However, some members of the board are strongly opposed to this, and most of the people who believe in alternative medicine do not believe in pharmaceutical alternatives (Novella, 2012). Therefore, their click-through rates for companies like Windham would still be low, leading to a substantial drop in revenue. However, the firm could make up for this by incorporating adverts from companies that make alternative medicine. Even though a part of the board opposes this, they could be made to understand that it is the only viable option. Things like search engine optimizations can also be done to increase the firm’s chances of getting a larger audience (Whitman, 2018). All these only if Baker is not convinced with the argument in part 1.

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