WebMD cuts 250 jobs amid advertising malaise

Share this article:
WebMD adds clicks but not adspend
WebMD adds clicks but not adspend
WebMD is laying off 14% of its workforce in hopes of saving $45 million to offset revenue losses from an ongoing advertising slump that's plagued the portal throughout 2012.

Around 250 jobs will be eliminated in the reduction, which the company said was part of a broader effort to streamline operations, cut costs and focus on increasing user engagement.

“WebMD's value proposition for users continues to be very strong,” said Cavan Redmond, who joined the firm from Pfizer last summer, filling a vacancy left by founder Wayne Gattinella when he resigned at the start of the year. “Becoming leaner and more nimble will enable the company to extend our leadership in this highly dynamic and increasingly demanding marketplace. In addition, anticipated changes in US healthcare will provide meaningful new opportunities to link the needs of patients, consumers and healthcare professionals to enable them to navigate their care. We are moving swiftly to implement these operational changes and new market initiatives.”

WebMD has, in recent months, initiated a redesign of its print magazine and a rethink of how its different access points fit together, with special emphasis on upping its game in mobile media, along with new apps and tools. Those moves have garnered a noticeable spike in traffic – the site saw double-digit increases in unique visitors and page views in the third quarter – but haven't yet moved the needle on revenue, which sank 13% for the third quarter over the same period in 2011, to $117 million. Sponsorship and public portal advertising fell 15% to $96.7 million.

The decline of the big, mass-market blockbuster drugs is partly to blame for the slump, but the portal has also faced increasing pressure from more nimble competitors like EverydayHealth, which saw advertising and sponsorship revenues from healthcare companies rise 35% for the first half of the year (EverydayHealth is a private company and does not divulge revenue figures, but based on numbers they put out during a flirtation with an IPO two years ago, they remain much smaller by dollars). WebMD, having long pursued an “above-the-fray” Rose Garden strategy in dealing with the competitors nipping at its heels, has started punching back.

As part of the restructuring, the company said it will “streamline its sales and delivery processes to enable better collaboration with our sponsor and agency clients,” while watching costs more closely, with “a sharper focus on prioritizing resources and investment to key areas of future growth.”
Share this article:
You must be a registered member of MMM to post a comment.

Email Newsletters

MM&M EBOOK: PATIENT ACCESS

Patient access to pharmaceuticals is a tale of two worlds—affordability has improved for the majority, while the minority is hampered by cost, distribution and red tape. To provide marketers with a well-rounded perspective, MM&M presents this e-book chock full of key insights. Click here to access it.

More in Channel

Five things for pharma marketers to know: Monday, September 15

Five things for pharma marketers to know: ...

Pharma has sought 76 meetings with FDA over biosimilars; Gilead licenses Sovaldi to India generic drugmakers; Pfizer and Ranbaxy Lipitor lawsuit dismissed.

Liraglutide, aiming for new indication, gets new name

Liraglutide, aiming for new indication, gets new name

Why Novo Nordisk is choosing not to leverage Victoza's brand equity as it seeks a weight-loss indication for liraglutide.

Five things for pharma marketers to know: Friday, September 12

Five things for pharma marketers to know: Friday, ...

An FDA panel voted in favor of liraglutide for weight loss; Allergan investors backing an attempted takeover of the firm crossed a critical threshold; and 100 million health wearables are ...