While pundits debate the valuation of Facebook, Twitter and other high-visibility social media sites—some wondering if there is a viable revenue model somewhere to be discovered—LinkedIn has been quietly profitable since 2007. Not bad for an Internet business born right after the bubble, in 2003. As Reid Hoffman, founder and chairman, explained in a recent interview, LinkedIn’s strategy is founded on two core tenets: unflinching focus on the needs of the target audience (the business professional) and a diversified revenue model. While other social media sites look for ways to keep their users on the site, LinkedIn understands time limitations for the business professional, and looks for ways to help people get what they need from the site as quickly as possible. But that does not preclude LinkedIn from actively accumulating details about its audience (e.g., through quick polls), which in turn improves its advertisers’ ability to fine-tune targets and messages. As to the diversified revenue model, I spend more time on Twitter, but I shell out $195 a year to be a member on LinkedIn.
Archive for October, 2009
Consolidation, cost cutting and product pruning seem to be a way of life in publishing these days. Witness the recent decision by Condé Nast to discontinue Gourmet magazine. And thus it was refreshing to read about Bloomberg’s strategy for BusinessWeek, which Bloomberg acquired from McGraw-Hill recently. Instead of the expected bundling and special package pricing for advertisers, Bloomberg plans to beef up BusinessWeek’s editorial and possibly increase the price, which according to Advertising Age is $35 annually, compared to $106 for The Economist. I’ve long since switched over from BusinessWeek and Fortune to The Economist, despite the higher price, precisely because of the editorial. And I’ve made a decision to discontinue my Wall Street Journal subscription once it expires, as Financial Times offers me a global perspective and better-quality writing worth the premium price. Ironically, The Wall Street Journal (WSJ) just passed USA Today in circulation, reaching 2.2 million compared to USA Today’s 1.88 million. I don’t want to be a snob, for I enjoy USA Today once in a while, especially when I’m overseas and hungry for news from home. But the very fact that WSJ is being compared to USA Today speaks to the problem. As WSJ tries to appeal to a broader audience with the likes of scandals and lifestyle-related editorial, its management seems to have adopted the strategy of expanding its circulation by picking up higher-income households in general, possibly at the risk of losing some serious business readers.
I think there are lessons here for healthcare marketers, especially those of us who operate within the business-to-business model (e.g., clinical diagnostics, medical devices). Although price is part of the buying decision, businesspeople are more likely to look closely at value (e.g., productivity gains with a more reliable though more expensive product). So, first of all, lowering the price is not the only path to business in a down (though perhaps recovering?) economy. By the same token, packaging deals without true added value won’t do it either. Buyers see through that quickly and, if not, a more thorough business analysis by the bean counters will reveal where the true value is. Lastly, why not take a bold step and take advantage of lower costs to improve products, so you’ll end up with a better product to sell, perhaps at higher prices?
My favorite marketing idea of the week:
Estee Lauder Gets Women Ready for Their Social-Media Close-ups: Cosmetics Giant Offers Makeovers and Professional Photos to Use for Profile Pictures
Excellent example of social media in healthcare:
How Hospitals Are Quietly Leading The Way With Social Media
If you are looking for statistics (also ideas for presenting numbers in a not-so-boring way):
From The Economist: Did you know?
Last but not least, look before you tweet:
Short Outbursts on Twitter? #Big Problem
More Mobility and Improved Income Potential for Doctors
Breaking from tradition, the Ministry of Health is loosening regulations to allow doctors in China to practice at multiple locations. (Up until now, doctors have only been able to practice at the specific hospital where they are employed.) It listed three conditions under which doctors can practice at multiple locations: when assigned by the government to support rural healthcare needs or emergencies, when serving multiple hospitals within a community health system, or when formally accepting employment from more than one hospital. In each case, specific applications have to be filed with relevant entities. The third option, multiple employers, is estimated to increase a doctor’s income by more than 100,000 RMB (about $15,000). It is also being hailed as a way to increase access to skilled medical care.
Pay-for-Performance Policy and Other Cost Control Measures
“If a healthcare worker can do the work of one and a half or two people, and we increase his pay by 20 percent to 50 percent, we will be able to control costs while increasing compensation,” said Minister of Health Chen Zhu at a press conference. The pay-for-performance policy, enacted on October 1, is one component of China’s healthcare reform and has been garnering a lot of press recently. The Ministry of Health is also implementing policies to reduce the price hospitals may charge for pharmaceuticals. This year, 30 percent of hospitals are expected to reduce their profit margin for certain basic drugs to zero. Another component is the establishment of clinical pathways to standardize diagnosis and treatment in order to increase efficiency and control costs. Minister Chen noted that one outcome will be the reduction of the length of hospital stays. And, with the pay-for-performance policy, better outcome will translate to more income for doctors and healthcare workers.
Traditional Chinese Medicine: Science or Alchemy?
Traditional Chinese medicine (TCM) continues to be an area of focus for China as policy makers and practitioners craft strategies for continuing development. The Third Traditional Chinese Medicine Development Conference will convene November 16-19, 2009, in Wuzhou, Guangzhi, with the goal of publishing a strategic analysis of current status and future trends to be used as a reference tool for practitioners, policy makers and commercial developers. Meantime, an impassioned editorial in Worker’s Daily decries the fact that, more and more, TCM is being challenged to provide the same level of clinical trial evidence and scientific descriptions of modes of action as Western medicine. The editorial suggests that rejecting everything that science cannot explain is assuming that our scientific knowledge today is sufficient to explain everything.