Case Study: Mednet.Com

MedNet.com Individual Homework Questions

1. What is the best argument Yates should make to justify charging Windham for impressions rather than click-throughs? (15 pts)

The strongest argument to justify paying for impressions on MedNet is that when a visitor is on the MedNet page, they are inclined to actually look at the content in the advertisement because they came to a page to get help for their aliments. The viewing of the ad on the MedNet page is more valuable than the click-through on the Marvel page. When a consumer visits the MedNet site, they are often in crisis mode and trying to find a solution to a medical issue. A Marvel visitor might be searching for something totally irrelevant to the medical industry and have no reason or predisposition to click on the Windham advertisement.

Marvel click-throughs are 4% less likely to turn into a sale than MedNet’s customers. MedNet visitors comes for answers and trust that the products advertised on the site work because they trust MedNet. The survey shows that 93% of visitors will return to MedNet for more medical information. That loyalty and trust shows that impressions on MedNet are valuable and will positively affect Windham’s bottom line. After doing the analysis in questions 2, it is clear to see that even though the cost of impressions and click-throughs is four times as much as Marvel, the profit from MedNet is ten times greater.

2. Fill in the table in the attached Excel file with case and exhibit data (print it and attach it to the homework hard copy). Make sure to explain the source of your data and detail your calculations. What insights do you gain from the table? (25 pts)

See attached excel spreadsheet. I have shown the source of my data in the excel spreadsheet along with how the amounts were calculated. The biggest take away from the table shows that even though Windham is paying four times as much for advertisements at MedNet, the profits are ten times higher. The ROI is also much higher. Marvel provides low advertisement cost, however, this advertising has minimal increases to the bottom line. Only $287,280 in profit from Marvel visitors vs. $2.9M of profit from MedNet visitors. Windham should concentrate less on the extra ad cost and spend more time analyzing where the most profit is stemming from. In this case, it is from MedNet visitors.

3. What should MedNet specifically do in order to address the emerging competitive threats from sites like Cholesterol.com? (20 pts)

Sites like Cholesterol.com focus on one chronic illness. Windham is worried that if they do not advertise on sites like Cholesterol.com, their competitors will get those customers. Windham wants to know why they should spend ad dollars at MedNet rather than Cholesterol.com. Sites like Cholesterol.com