Online health sites earn majority of their revenues from advertising and sponsorship programs. They also earn revenues by licensing and retailing products through their site.
WebMD (Nasdaq: WBMD), the leading portal for online health, for example, saw its advertisement and sponsorship revenues grow by 45% to $52.4 million and licensing revenues increase by 61% to $19.8 million in Q2 2007 over the June 2006 quarter. In Q2 2007, WebMD’s online services segment adjusted EBITDA increased 56% to $14 million or 19.3% of segment revenue compared to $9 million or 18.2% of segment revenue in Q2 2006.
The CPM rates for WebMD grew by approximately 16% year-on-year during Q2 2007 indicating strong pricing environment and increased sell through.
Niche positioning, premium and highly targeted content and strong demand allow the health portals to not only draw advertisers to its sites but also charge decent CPM rates.
Online health portals should consider aggregating services for beauty treatments, weight loss therapy, power yoga, counseling for depression, etc. They can also retail nutrition, health program, fitness, yoga, weight loss, bipolar disorder, children’s health, mother care and other related CD and DVDs.
Interested readers may also want to read my article Games For Good, where I discussed a game called ReMission by Hope Foundation that is focused on Cancer Patients. Similar Games For Good educating patients about their condition, the need to take medication, follow programs, etc. could be a great opportunity for the healthcare sites to expand.
Finally, mental illness as a category requires assisted living. It is not easy to find assisted living facilities online, and healthcare destination sites need to augment their resources related to Alzeimers, Scirzophenia, Bipolar Disorder, etc. As a matter of fact, there is an interesting franchise business to be created around these illnesses, that has to do with assisted living centers.