Mednet Advertising

1. What does an advertiser want? Sales, leads, brand awareness? What are the best metrics for measuring those? How do you determine if the business model produces the results that an advertiser wants?

Companies advertise in order to increase revenues, identify potential new customers and build their brand equity in the marketplace. Although all of the foregoing reasons for advertising are interrelated, each may have a very distinctive timeframe.

Increasing sales/revenue is typically a targeted and shorter-term goal when it comes to action-specific advertising. Companies are looking for tools that provide some control over consumer activity. For example, a company may have excess inventory or manufacturing capacity that it needs to sell or fill. If the company could utilize an advertising campaign offering lower prices in order to sell excess inventory or manufacturing capacity, it would allow the company the ability to flex pricing when required. Developing a robust and targeted advertising strategy that drives consumer activity is a huge advantage since excess inventory and capacity cost the company money and decreases its utilization of assets.

The long-term strategy of increasing sales can be linked to growing brand awareness and strength. Over time companies want advertising campaigns that distinguish their products from competitors' products. Metrics for measuring advertising success can be both quantitative and qualitative.

Quantitative:

Market share and market penetration are two metrics commonly used for measuring brand strength. Companies want advertising campaigns that offer differentiation, relevance/frequency (# of customers exposed to ad), esteem and reach (average # of times a potential customer is exposed to the advertisement over a period of time). Frequency and reach are two important metrics for e-advertising campaigns.

Qualitative:

Companies can conduct consumer surveys and "voice of the customer" initiatives to gauge customer attitude towards their brand, via brand awareness, brand equity and brand image surveys.

2. What is the best argument Heather Yates can make to justify charging Windham Pharmaceuticals instead of click-throughs? Does she have acceptable alternatives?

Ms. Yates should focus on the quality of MedNet's website traffic and build on its solid reputation of integrity, trustworthiness and business expertise. Their financial data and ROI calculations vs. Marvel proved that MedNet's business plan and strategy provided the best results for Windham Pharmaceuticals (see ROI calculation in Question #3). In order to further address Windham's concerns regarding the price difference between CPM and CRT, Ms. Yates should focus on the following:

* Leverage MedNet's solid reputation as a general health resource as well as a condition specific resource. Although cholesterol only ranks 8th on the most viewed categories on MedNet, weight control center ranks 3rd. There is a strong correlation between high cholesterol and people who are overweight. A visitor coming to MedNet for weigh control will also be exposed to Windham's cholesterol specific product.

* 85% of MedNet's users strongly agreed that advertisers at MedNet were 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. MedNet's users associated the Windham brand with trust and quality as a result of advertising on MedNet

* 93% of MedNet's users will return the next time they require medical information. The high return rate will not only help build Windham's brand equity with returning users, it will lower their cost of attracting new customers.

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