Health Guy

Failure to Deliver Meaningful ROI Online for Pharma?

It seems that someone at WebMD must have read both the article and the comments-yesterday they announced a $75M acqusition of Quality Health!

Failure to Deliver Meaningful ROI Online for Pharma?

Thanks for the kind words. I am aware of Quality Health although I have not worked with them nor spoken to anyone who works there. I would be curious as to the ROI via their model of measuring impact from viewing a Pharma ad online (assume this is a banner?) vs. the ROI from generating a very qualified lead online where qualified is someone who has typed in a very specific search for a condition, been taken to a specific offer, answered key questions to further qualify themselves, and then opted in to agree to receive marketing materials from Pharma.

I certainly think its possible to draw a connection between someone who at some point saw an online ad and their eventual arrival at the doctor's office, but I dont know if you can tie this outcome as close as you might in a more unique lead generation hybrid model. But hey, every little bit helps. And the larger point of my article isnt about what methods of innovation will work the best, but simply that in order to get Pharma to move we all must innovate more. And to the extent that Quality Health and others are doing that I tip my hat.

Failure to Deliver Meaningful ROI Online for Pharma?

Hi Dr. Goel,

Thanks for your comments. And I agree, vertical sites that offer users more substantive, focused content are likely going to gain traction in the coming years as the general portals are unable to "be all things to all people".

And as you suggest, Pharma would be smart to understand how a smart, targeted spend in sites like these could impact their business, either via new scripts or for CRM/retention purposes.

Finally, I also concur (hope) that the more effective products/websites are more than mere publishing houses that are so prominent today.

Google Health Unveiled: Open the Flood Gates

Well, I guess we will agree to disagree. You are impressed by Google Health and I am not. Who knows? Maybe something interesting will evolve-certainly Google knows how to innovate. And its nice that someone is writing about online health. That is rare.

But I dont think Google Health represents any additional value to cause any investor to buy Google stock. And this is a website about investing, right?

Google Health Unveiled: Open the Flood Gates

A) I dont work for a market research firm.

B) Google already has ADAM and every other content provider integrated into their search results.

C) Google already is the leader in the online health ad space.

D) Nothing about Google Health inidicates that they can gain traction with users or make money. Just saying that a market is "a billion dollar industry" doesnt make it so. In fact, I dont know anyone who is making any money in PHR field.

My point here is simple: broad, general statements that have no historical fact or logical assumptions are useless. And how investors usually get burned....

Google Health Unveiled: Open the Flood Gates

No offense but your evalutaion of Google Health shows a lack of expertise in the online health space. And as for their content, its simply licensed from ADAM just like tons of other health websites. The fact is there is no motivation for users to use this service, secure or not, and it will gain zero traction. People have been trying to get users to import their data for years with zero success. And now the WSJ reports that the CBO is saying that any benefit from digital health records is overstated and likely non-existent.

Google should just stick with search. After all, they already eat WebMD's lunch by taking the majority of Pharma ad dollars already.

Blue Nile, ZipRealty Down; WebMD, Monster Up

How can you say WebMD "outperformed" when it lowered its 2008 forecast just a week before? You still dont understand their business if you are still advocating this stock as a buy.

CBS Digital Acquisitions: What's Next?

CBS will buy WBMD before the year is over. They have an exisiting content syndicaiton relationship but more importantly, WBMD stock is down 3x from its highs. Its cheap right now and gives CBS entry into a growth market---online health. And of course, Phara cross selling could be huge, assuming they could make that work operationally.

Time to Buy WebMD

While there may be some fundamental financial analysis that says on a discounted cash flow basis WBMD is a buy but there is no reason to buy this company based on any analysis you offered above. In fact, most of what you report is simply taken from their earnings call or other available information and not any specific insights.

The fact of the matter is that WebMD is 100% opposite of what you call "niche content". The vast majority of their content is rented from health publishers whose content is easily found all across the Internet. I am speaking of firms like Healthwise, Harvard Health publications, MayoClinic, etc. Anyone with money could start a website tomorrow with 80%+ of the same content as WebMD.

And while you note that WebMD does have large reach there are a few problems. One, organic growth is likely saturated based on the data you provide. Two, ad agencies across the country hate to work with WebMD who is arrogant and overpriced. Three, CPM revenues are declining as Pharma is putting pressure on online health portals to deliver more "action" and less banner ads which are ineffective at delivering the ROI required to meet their needs.

And of course there is much more competition today than even one or two years ago. Back then WebMD was the only kid on the block and had free reign. Not any more. Users are tired of their inch deep and mile wide content and have migrated to deeper, "long tail" websites. Competitors like Revolution Health, Everyday Health, and Microsoft are coming on hard and fast competing for both ad dollars and user attention. WebMD has done a good job with Medscape which will be more difficult to supplant although new sites like Sermo have an interesting model and are gaining traction.

As I said at the start of my comment, there may be a financially sound reason to buy WebMD at these levels but not a strategic business reason. I suspect as the recession deepens WebMD is likely to test its IPO price of $17. And if the institutions get scared or need to liquidate for other reasons this could be a low teens stock by summer.