Case Study: Zoomedia

Business Description: A privately-held San Francisco, CA, Internet communications agency serving life sciences companies, offering strategic planning of Internet initiatives and website strategy and development to address creating corporate, product, patient and clinical trials interfaces.

Theme: Zoomedia has significant presence in the life sciences marketplace and is planning an entry into the nutraceuticals market. The key question addressed in this case is whether that makes sense and what will it take to succeed.

Background: Zoomedia was founded in 1994 as a multimedia design firm for emerging life sciences companies like Genentech. The company rapidly moved into website development as the Internet gained momentum, and has built over 100 websites for both startups and market leading companies like Gilead, Genencor, Chiron, Alza and Celera. Its strategic direction has continually been to expand from basic web development into a comprehensive Internet communications agency that can offer a complete, web-based solution that integrates with a client’s other marketing and business development efforts. The company is accomplishing this strategy by upgrading its technology and bringing in new media savvy executives.

Situation Assessment: Zoomedia enjoys a healthy portion of web business in the biotechnology world, and it believes that its offering will have significant value for nutrition-based companies. It’s a market currently being served by small, local companies that may lack adequate knowledge and resources to offer a robust solution. Through its internal analysis Zoomedia believes that companies throughout the nutrition supply chain, from technology all the way to the customer, can better harness the power of the Internet to reach customers and connect with the other elements of their marketing plan.

The timing for Zoomedia’s market entry appears fairly strong as the industry is beginning to turn a corner and companies are seeking more clever ways to grow their businesses. An underlying assumption behind its strategy is that today, few companies lack any website presence, but a clear majority of these companies lack an integrated web strategy, and more important, any idea of the effectiveness of their web presence. Companies providing web-based solutions need to convince business executives that websites are “living” entities that need to be continually monitored and updated—it’s not a one-time, static action. As the market recognizes, more people use the web as their primary source of information about nutrition—they essentially “Google” the web.

Opportunities: As most companies in the nutrition industry already have some level of web presence, it is critical to Zoomedia’s success that it builds a compelling argument for new investments in website development. Its success is highly dependent on convincing executives that they will receive significant value from new website developments. There are many companies that understand the strategic significance of their online tools and have already “enhanced” their sites, but a larger market exists for players that need help and these will be the targets for Zoomedia. Due to the rise and fall of the dot.com companies, many remain cautious about over investing in web developments. Zoomedia must demonstrate to prospective customers the potential to provide business solutions. Many companies believe that their web presence fits their purposes, so it will be critical to demonstrate how a properly functioning website needs to be a priority, particularly for market segments with a more complicated sales message, such as nutrigenomics. This will be particularly difficult since marketing budgets tend to be fixed and limited, and many projects are competing for these same funds. It will be critical to provide executives with metrics on the expected return on investment for website improvements.

Lessons Learned: At the heart of Zoomedia’s challenge, which is not unlike any new product or service in this industry, is educating the market on its value proposition. Zoomedia is an experienced, successful business with unique capability, but it also needs to use creative means to demonstrate why companies should use its services. The quality of its products alone will not lead to success and it will need to overcome several challenges: (1) Zoomedia needs to identify and target the right companies, as significant time and energy can be wasted by focusing on the wrong customers. It must sell the value of integrated Internet communications to companies who consider their websites as static online documents, instead of a prime communications channel; (2) It’s critical that Zoomedia not sell a service, but rather a solution; (3) The company must leverage its biotech experience base and demonstrate its application to nutraceutical products. It has a wealth of knowledge and experience, but it must fit the context of the nutraceuticals market; (4) Many companies have already invested in websites, so Zoomedia must convince clients that continual website improvements be approached like a marketing budget element with annual funding.