The widespread use of digital media by online health marketers is a point of concern in a complaint by consumer and privacy watchdog groups to the U.S. Federal Trade Commission. The commission has been asked to investigate regarding “unfair and deceptive advertising practices” available to consumers online. The group is concerned that while digital marketing is providing consumers with medical information, it is also engaging in activities that “threaten privacy, raise questions about the fair presentation of independent information, and advance the sales of prescription drugs and over-the-counter products.”
But, despite the concern, online health information provider, WebMD (NASDAQ: WBMD) continued to see phenomenal growth in the quarter. The company’s Q4 revenues grew 22% over the year to $168.5 million and exceeded the Street’s projected revenues of $166.3 million. EPS of $0.47 was also ahead of the market expectations of $0.44.
Revenues from public portal advertising and sponsorship grew 28% to $147 million. Private portal service revenues fell from $23.2 million last year to $21.4 million. Among other statistics, traffic to the WebMD Health Network grew 38% to an average of 86.4 million unique visitors per month. The number of page views during the quarter grew 22% over the year to 1.8 billion.
For the year, revenues grew 22% to $534.5 million and EPS fell from $2.07 to $0.88. For the current year, WebMD projects revenues of $610 million–$640 million with EPS of $1.22–$1.40. Analysts were expecting WebMD’s revenues for the year to be $630.8 million with EPS of $1.25. For the current quarter, the company projects revenues to be more than $125 million compared with the Street’s projections of $128.3 million.
WebMD’s Mobile Initiatives
The growing concern over digital marketing hasn’t done much to dampen the growth of health apps. According to a report by Pyramid Research, more than 200 million health applications for mobile devices are being used by doctors and patients today. The number is expected to cross 600 million by the year 2012. Another report claims that the mobile health annual market will be worth $1.7 billion by 2014.
There are already several apps available in the market, most of which focus on disseminating health-related information to users. Epocrates, the leading drug reference source, was identified as the most popular health app among providers by the Pyramid Research. The app is used by healthcare providers as their point of care drug reference site. The free app claims to be the only one to provide an “integrated set of unique features, such as pill identifier, formulary data and dosing calculator that physicians require at the point of care.”
It is not just health care providers, but their patients who are turning to the mobile apps. Healthagen’s iTriage has information on symptoms, diseases, and medical procedures. The app is also a directory of nationwide hospitals, clinics, and pharmacies. It helps users search for and gives them turn-by-turn directions to the nearest choice among its database of over 750,000 physicians or 350 specialty clinics.
WebMD is also not far behind in its mobile initiatives. The WebMD Mobile app includes a Symptom Checker; lists first aid essentials; gives information on drugs, supplements, and vitamins; helps identify pills by color, shape, and imprint; and can be used to map and search for a nearest healthcare provider. But it is their Medscape app that has received rave reviews.
The Medscape app was recently named the most downloaded free medical app of the year for iPhone by Apple on its iTunes Rewind 2010 featured list of Apps. The app provides a comprehensive reference on more than 6,000 drugs, 3,500 diseases, 600 procedures and 80 tables and protocols; gives daily medical news and alerts; and is part of WebMD’s Continuing Medical Education activities. The company recently expanded the reach of its popular MedScape app to both the iPad and Android devices. Since its release, earlier last year, for the iPhone and BlackBerry devices, the Medscape Mobile app has registered over 700,000 healthcare professionals.
Among other apps, iPharmacy was selected as the No. 1 medical app of 2010 of Apple App Store with its medication guide on 10,686 drugs. The Pocket Lab Values app was the highest rated iPhone lab value App for being a useful reference point for students, doctors, and nurses by providing access to lab values, clinical information, critical lab values, differential diagnoses, tube colors, and useful websites. Another app, iMeds – The Medication Reference claims to be the most complete medication app with over 7,300 FDA approved medications and to be the only app to provide full prescribing info. The app Mediquations was selected as the staff favorite by Apple for being a comprehensive medical calculator with 230 formulas, scoring tools, and an intuitive interface. MedCalc, with its more than 700,000 downloads, claims to be one of the more popular apps by giving access to medical formulas, scores, scales, and classifications. Skyscape Medical Resources is also a useful database of free medical information and decision support resources.
A survey conducted on 3,000 families in the U.S., India, China, South Africa, and Brazil by McKinsey found that 70% of those surveyed were looking for either free or low cost health related apps. While the sample may be rather small, it does represent a growing opportunity, and WebMD seems to be working towards addressing it.
Their stock is trading at $56.10 with a market capitalization of $3.4 billion. It touched a 52-week high of $58.53 at the end of last month.