Today, in the Colony Square building only a few feet away from our office, the leadership at WebMD is letting up to half of the 250 Atlanta staff go. Shocked doesn’t begin to describe my reaction to this health media giant being cut, quite literally, down to size.
WebMD IS health content online to many people. In our study of content and credibility earlier this year, participants rated WebMD as one of the most credible sources of any content, much less health content. I’ve had the privilege, over the course of many years, to work or consult for a wide range of health companies and government agencies. Time and again, WebMD set the standard by which everyone else’s health content was judged. Even last week, I observed some market research where several participants said when they have a health question, they often turn to WebMD for an answer. And, in its most recent annual report, WebMD noted that the audience for its core offering, WebMD.com, continues to grow.
So, if WebMD’s reputation and popularity haven’t changed, why the huge cuts? The reason most widely reported is that pharmaceutical advertising money dried up because of drug patents running out and changes in advertising regulations. Atlanta Business Chronicle hints that WebMD is battling competition from Sharecare, a venture of WebMD’s own founder, Jeff Arnold. Both reasons suggest that the health ecosystem is changing—and by extension the health content ecosystem is changing, too. This situation will offer many lessons, I have no doubt, but two in particular strike me.
The saying “don’t put all your eggs in one basket” is old, but it’s still true. WebMD was apparently so dependent on advertising dollars from a few pharmaceutical companies that a change for those companies meant dramatic instability for WebMD.
What puzzles me is that WebMD has been expanding its editorial content (articles, quizzes, slides, videos, and so on) beyond diseases, which aligns well with pharmaceuticals, into new wellness and prevention topics for years. That means WebMD had plenty of new editorial substance to attract and support new kinds of advertisers who aren’t as constrained by regulations. What also puzzles me is that the lifecycle of drug patents is pretty clear and, therefore, should have been anticipated. My hunch is that even though WebMD was capable of diversifying advertising sources and capable of anticipating the need to do so, that requires more effort than sticking with the same advertisers.
The takeaway? Seeking a variety of advertisers or funding sources is more work and perhaps more overhead than depending on only a few, but it pays off with less risk.
While the story of Jeff Arnold now competing with WebMD might set some tongues wagging, the reality is that the competition for health content lies in many more places. Any company or organization can publish, or be a source of, digital content today. Insurance companies and hospitals are getting into content. Startups in the self-tracking space are recognizing data dumps don’t work; they need content. Even health tech companies are getting into content. At the same time, traditional media and traditional publishers are getting into digital health content, while government agencies invent consumer-friendly content sites such as flu.gov. And, I’m only scratching the surface.
While the health content ecosystem teems with sources, WebMD has been expanding beyond a website into print (look for the magazine at your doctor’s office), video / TV, mobile tools, and other content products. WebMD has not been afraid to experiment editorially, which is fantastic. The health giant is anything but stagnant. But, this constant expansion likely isn’t sustainable. Perhaps it’s time to assess these content products in light of the content ecosystem and decide which ones should stay, which ones should change, and which should be retired. In other words, it’s time to adjust the strategy.
What does that mean for you and me? Monitor your content ecosystem with wide eyes. It’s an exciting, crazy time for content. New competitors or partners can come from just about anywhere. Don’t be surprised if you have to adjust. (I find adjusting so important to content work that I devoted an entire chapter of “Clout“ to it.) And, consider whether your strategy should be a volume play or more focused.
Of course, I wish WebMD’s layoffs were not happening, and my heart goes out to everyone affected. Even those who are not laid off will cope with missing friends and coworkers, adjusting to new bosses, and doing more with less. That said, I’m hopeful this move represents a temporary setback that will prompt some healthy change. The web pioneer’s content and audience are as strong as ever. If WebMD can stay strong while expanding its advertising and focusing its content products (not the other way around), then the long-term prognosis looks good.
Originally published on the now-archived Content Science blog in December 2012.
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