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Archive for the ‘Pharma’ Category

WebMD: No Immunity to Ad Pullback

• Posted April 24th 2008
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• by Janice

WebMD, the bellwether of the online health information sites, is suffering from ad pullback.  It was widely reported this week that WebMD has lowered its guidance for 2008 and its stock has been punished as a result.   S&P has downgraded the stock to a sell and cut its target price to $23.

Concern about lower-than-expected pharma advertising was a major factor in the downgrade.  But, WebMD is not entirely dependent on online ads for its revenue, which mitigates the financial picture. WebMD is also a leading provider of online continuing medical educations (CME) programs, and also provides private portals and custom publishing.

Some seem to relish bad news about WebMD and are quick to ascribe the slowdown in pharma advertising for WebMD to competition from newer players that offer less-costly ad alternatives. See, for instance, the comments in Silicon Alley Insider.  We firmly believe that ad dollars will continue to shift online.  However, the advertising sector is notoriously cyclical, and considering the current economic climate, the ad pullback is likely to prove contagious in the short term.

 

Vertical Ad Networks Still in Experimental Phase

• Posted April 17th 2008
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• by Janice

The Health Central Network (THCN) and IAC’s Advertising Sales (IAC/AS) group announced the launch of a new health advertising network this week. THCN owns and operates a collection of healthcare-focused websites, with a core collection of disease-specific sites such as My Migraine Connection and My Allergy Network, which were either acquired or built. Owning the sites gives THCN the ability to impose common standards, tools, and interoperability among the sites and unites them under a single strong brand that appeals to advertisers that want to reach consumers who are seeking information about disease management and healthcare.

Health Central’s new agreement with IAC/AS now provides them with a strong vertical ad network in addition to substantial ad sales resources for serving the pharmaceutical industry. Furthermore, the relationship between IAC and THCN goes well beyond this cooperative ad network. IAC made a significant minority investment in THCN in January, which PaidContent.org has reported at $50 million.

Glam Media competes with THCN/IAC for the same pharmaceutical and health-related consumer product ad dollars, but with a different vertical ad network model. Glam, which raised an additional $85 million in February, has also assembled a substantial collection of related websites that in the aggregate attract tens of millions of visitors per month.  While THCN’s content is medically-focused, Glam’s network of sites is weighted more toward entertainment and lifestyle. But the key difference is that Glam does not own or operate most of the sites in their network. Instead they offer a range of advertising and marketing services to the affiliated publishers.

As the Web develops into a more mainstream advertising and marketing medium, both of these experiments bear watching. Advertisers and marketers will likely try out both, and success will go to whichever produces the best results.

 

TargetRx Receives Funding Boost

• Posted April 9th 2008
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• by Marji

TargetRx announced it received $9.6 million of venture funding led by Quaker BioVentures, New Enterprise Associates (NEA) and Domain Associates, all existing investors. The company expects the funding to fuel future growth as well as the development of new products for its pharmaceutical industry customers. These new products will be designed to help customers improve their sales and marketing processes and drive overall business performance.

TargetRx has a normative database of physician attitudes that it combines with patented proprietary analytic methods to provide pharmaceutical companies with “leading indicator” of performance. Essentially, the research gives these pharmaceutical companies a glimpse into how they are currently performance and what they can do to improve that performance against key drivers of physician prescribing behavior. TargetRX can also forecast the companies’ future performance.

According to a press release announcing the funding, TargetRx has worked with most of the top 30 U.S.-based pharmaceutical companies since 1999. This funding should help TargetRx further the relationships it has built with those companies as well as yield new business. Companies in all industries–not just pharmaceutical–are constantly struggling to find ways to improve their sales and marketing functions.

Gaining customer insight in order to make these processes work better is a constant challenge. There is undoubtedly a large market for the solutions that TargetRx offers; and now there is the promise that these products will be developed even further and be joined by additional innovations. TargetRx isn’t the only winner here. As a result of this additional funding, these pharmaceutical customers who expect to gain a competitive advantage from TargetRx’s intelligence, are poised to be victorious as well.

 

Follow the Money

• Posted February 26th 2008
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• by Janice

The Centers for Medicare and Medicaid Services, a division of HHS, has come out with a new report that projects that spending on healthcare will increase to $4.3 trillion – that’s trillion with a “t”—by 2017. That translates to 1 in every 5 dollars being spent on healthcare.

The full report, which is available on the Health Affairs website, projects an increase from 46% to 49% of the total to be paid by federal and state governments, as the baby boomers become eligible for Medicare.  That still leaves over $2 trillion in consumer spending. With that many dollars at stake, one thing is certain: advertisers will be targeting those consumer dollars.

So it is no wonder that there has been a surge in the number of consumer healthcare portals that stand ready to accept these ad dollars. Their current focus is on pharmaceutical companies as they transfer a growing percentage of their approximately $5 billion annual consumer ad budgets online. There’s no doubt that pharma ad budgets could fund quite a few consumer health portals. But, pharma companies aren’t the only potential advertisers. Medical device vendors factor in, too. Plus, with the growing demand for quality and cost data to help inform healthcare decisions, expect to see more medical practitioners (not just plastic surgeons!) and provider institutions, including hospitals, clinics, nursing homes, and home health providers promoting themselves online.