Building the Koop Brand
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The four-year, $89 million alliance with America Online that drkoop.com announced this week is a perfect example of the power of branding.
Immediately after the deal was made public on Tuesday, drkoop.com shares surged in heavy trading, reaching as high as $45.75 before closing at $36.88, up 56% from Friday's close.
While the stock's price has since retreated -- KOOP was trading Friday afternoon around $29 per share -- I believe the real bounce will come in the long-term.
When drkoop.com filed to go public, I wrote a Midday Report in which I called the IPO "the branding play of all time." The last few days illustrate exactly what I meant:
All right, maybe they didn't say that verbatim, but that was the message. And it will reverberate, especially with the all-important future customer, the person who barely goes online or doesn't at all yet, which is still the majority of the U.S. population. Many of them heard or read about the AOL-drkoop.com deal, and will maintain an association between Koop, AOL and the Web.
Further, by giving drkoop.com direct access to its growing base of 19 million subscribers, AOL is providing the Web health site an unprecedented online marketing channel. A large percentage of subscribers tend to stay within AOL's user-friendly confines. If they want to find information on health, they just click on the Health channel provided by AOL. Oh, and look who's here! Why, it's Dr. Koop, the beloved and trusted former Surgeon General. I would recognize his dignified, benevolent visage anywhere!
That's how branding works. And whatever assets some of the other medical sites possess, they don't have Koop.
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