Every Right Revolution Health

I've been writing about the consolidation in the online Health space.   My last three blog posts were:

• Revolution Health's sale to WaterFront Media, the parent company of Everyday Health
• Revolution Health's traffic
• WebMD getting into the act, and acquiring Quality Health

Everyday Health had started the whole thing off by stating that their goal was to become the number #1 online Health site.  Well, they just did that!  Everyday Health has now become the #1 Health site, per comScore  (and yes, this is still playing the traffic game). 

So how did EverydayHealth/ WaterFront Media manage to do this?  Since the dawn of time, WebMD has been the #1 Health site, with no one else coming even close.   EverydayHealth and Revolution Health, in their quest to gain on WebMD, kept acquiring other health sites, or representing them for online sales, in exchange getting their traffic assigned to themselves in comScore.  And then, of course, EverydayHealth acquired Revolution.... and they were still lower than WebMD.

Well, this week, we've just announced that RightHealth, Kosmix's flagship Health site (we were #2 in Health through most of this year, per Hitwise), is now also going to be represented for display ad sales by EverydayHealth.  RightHealth traffic is the biggest contributor to Everyday's traffic - woohoo. 

I guess the online display ads world is going to be a little different.

WebMD Acquiring Quality Health

Consolidation in the Health space continues, and now at bargain prices.  WebMD, the gorilla in the space, is acquiring MTS (Marketing Technology Solutions) and its subsidiary Quality Health for about $50 MM.  

Given that MTS had revenues of ~$21 MM in 2007, this is indeed a poor price for their shareholders. 

Why does this make sense?  Well, WebMD is far and away the leader in CPM advertising, and sponsored sites/ areas.  And Quality Health is the best at CPA for health advertisers,  or what they like to call 'performance-based marketing'.  So the theory would be that health advertisers and agencies now need only make one stop to find their advertising dollars.

Cons - by the same token, though, now advertisers and agencies suddenly find a large part of their budgets in one publisher's hands.  That will probably not be viewed in a positive light; after all, marketing 101 includes lessons on diversification for risk mitigation as well as spreading your message across more eyeballs.  You wouldn't just advertise on NBC on TV now, would you?  You would also keep some budget for comedy central, for the young crowd, for the Oxygen channel, for women, and finally for Monday Night Football... because we're in America, and not advertising on football programs gets your TV advertising license revoked.  So this should make things easier too for the other publishers, such as RightHealth, which is owned and operated by Kosmix, my employer.

The announcement took away the thunder from Steve Case's Revolution Health and Everyday Health.  Let the shake-ups continue!

Revolution Health's Traffic - How to Play the Traffic Game

There was a comment on my earlier post on Revolution Health raising a good point - viz that I should check different traffic sources, and not just quote Quantcast. 

Quantcast, alexa, compete, comScore, hitwise - they all have different methodologies, and generally have different measurements for sites, even the big ones.  comScore is the one most advertising agencies prefer - but if you use comScore, be aware of what you're seeing. 

As an example, Revolution Health in comScore shows up as the third largest Health site;  this is because there are sites such as Drugstore.com, Daily Strength, and SparkPeople (which also runs SparkRecipes and SparkTeens), with a total of about 5.4 MM unique visitors, that assign their traffic over to Revolution Health.  Revolution Health represents these sites in ad deals, and in exchange gets to report their traffic in its "network". 

Revolution  Health also bought a few sites - CarePages in April 2007, and HealthTalk in December 2007.  It of course gets to report these sites under its traffic in comScore, and shows bump ups in traffic as a result of these acquisitions. 

If I were to take an impartial stand, I would (a) definitely remove 'ad representation' sites when reporting a site's traffic, and (b) put an asterisk next to traffic bumps due to acquisitions... but still include them.

Here is my take on comScore info for Revolution Health's traffic (leaving out smaller and sub-sites that don't contribute enough).  These are estimated numbers, of course!

Revolution Health Sale to Waterfront Media - update

Following my older blog post on Revolution Health possibly looking for exit strategies  (http://techperspectives-vikram-singh.blogspot.com/2008/09/revolution-health-up-for-sale-or-just.html),  now there is talk of them merging with Everyday Health, which belongs to Waterfront Media.  

I'm not sure how much conjecture there is in this news - the Washington Post was the only major news outlet that seemed to carry this article.   Plus, we've heard stuff like this before - layoff news from Revolution seems to come every couple of months.  And around August, there was talk of them merging with Glam,  which would have been funny.

So why might this merger make sense?  Well, to begin with, WebMD is the big bully in the online Health space.  Most Health sites need to sell display and other advertising to make money, and everyone plays second fiddle to WebMD.  With the market softening, this starts hurting even more.

Everyday Health and Revolution Health could merge, and start showing their combined traffic to potential advertisers and media agencies - this at least shows them  having traffic levels comparable to WebMD. 

At the same time, though, there is one issue - this would be the same as the old Daily Strength-Revolution deal, where Revolution signed up to have their ad sales team represent Daily Strength.   And they would get to show DS metrics under the Revolution name in comScore, if they needed to.  But if agencies thought about it, they would really be paying not for this combined set of eyeballs, but a lower number, since the sites would have a large overlap of users.  i.e. the true unique visitor traffic would need to be figured out, to ensure that advertisers and their agencies were getting the best deal.

Both sites were already doing this anyway - Waterfront Media operates a plethora of websites, including the one-dimensional-but-very-popular SouthBeachDiet.com site.

In terms of other strengths, Everyday Health is much better than Revolution at SEM, getting more traffic at lower cost.  And I like Revolution's branding and web 2.0-is look better.  So maybe there are synergies.... I just don't feel the combination will be greater than its parts.

Where does RightHealth,  my employer Kosmix's big Health property (#2 Health Information site per HitWise) end up with all these changes?  Well, for one thing, competition suddenly goes down in all aspects, if EveryRevolution is formed.  In my job, I'll fight against one less sales team and one less Business Development team  (I'm ignoring the benefits of more competitors right now, they are outweighed by the cons),  we'll get more traffic, the online Health space loses one major contributor to fragmentation....

To end this post, I'll throw out some potential names for the combined entity; pick your poison:

• EvolutionHealth  (my current favorite
• EveryHealthRevolution  (a close second)
• RevolutionDay
• EveryRevolution

If one of these is picked, I expect a royalty check.

Revolution Health up for Sale, or just in Trouble?

Tongues are wagging across the valley about Steve Case's Revolution Health being up for sale.  Is this true?  Or is Revolution just in a bit more trouble (after all the rumors of folks being unhappy and leaving, no health insurance for quite a while, etc. etc.). 

Either way, their traffic is dropping precipitously - see the graph below, from Quantcast.

This is quite the drop-off.  However, it could also be a function of Revolution slowing down their SEM efforts - they grew their traffic aggressively using SEM (and who doesn't today?), but early estimates held that the Revolution gurus were spending between $400K - $800k/month between October 2007 to May 2008, without getting a proportionate return.  If that was the case, then it makes sense that they ramp down their SEM activities until they can run them profitably, or at break-even.... or even at a loss that is sustainable, given their overall burn-rate.

There is, of course, another option - that Google changed their algos with respect to Revolution Health, temporarily destroying their SEM strategies.  It happens quite often,  much to the detriment of Google advertisers. 

(Its not just SEM players who get taken to task every now and then; SEO companies also get whacked when the big G changes its ranking algos - witness what happened to Answers.com last year).

By the way, on a totally separate note,  the graph above shows why I love Quantcast;  comScore, which is the metrics provider of choice for most advertisers and agencies (specially in the Health industry), shows a company's total network.  A few months earlier,  Revolution signed a deal with Daily Strength, to supply ads to DS.  comScore would probably show Daily Strength Page Views and other metrics under Revolution Health.