The Ford Fiesta Social Media Campaign ROI

The goal of today’s blog post is to look at the return on investment on Social Technology implementation made by a multi-national car company known as Ford Motors. Ford motor company is thethird largest car manufacturer in the world, established in first decade of the twentieth century. Sales volume of this global car behemoth runs into the hundreds of billions of United States Dollars.

In 2009, Ford motor companylaunched a new social media campaign for its new ford fiesta car. The experiment was to last for six months, promoting the new car to a younger age group between their 20’s and 30’s through social media, by using 100 people who are key players in the online social arena with massive followings.

Ford handed over 100 ford fiesta cars to these 100 drivers with six months of all expenses paid for the use of the new car by ford motors. In exchange for this, ford request that these selected drivers use social media platforms to share their ford fiesta experience with friends and followers. This people were expected to blog, tweet, and post photos to Flickr and make YouTube videos, all of which would move organically through their social networks.  

The Key Objectives of launching the social media campaign are:

·         To reach millennials who were difficult to engage

·         Start a national conversation about ford for a new generation

·         Work with contemporary culture instead of against it

·         Generate US sales for a style that had previously only been successful overseas

Key Issues with this social media campaign:

·         How to market to millennials

·         No models in showrooms

·         Control over what agents say about the cars

·         How to measure performance

Cost of Social Media Campaign

The project was launched by providing 100 fiesta cars to hundred agents that are socially savvy bloggers. The company hired a social media marketing firm to help manage its campaign. And also incurred cost on maintenance of the vehicles within the project duration. The 100 Ford fiesta cars were estimated at $2million including the infrastructure provided. The program lasted for about six months which cost an average of $500,000 per month to maintain. This results in an approximate total cost of $5million.

 

ROI Calculation

ROI = {(Gain from Investment – Cost of Investment) / Cost of Investment} X 100%

ROI = {($30million - $5million) / $5million} X100%

ROI = 500%

Six days after the Ford fiesta car was launched, it grossed sales of over 10,000 cars which is approximately $150 million in sales revenue.

It is assumed that the net profit on each ford fiesta car is $3,000 which approximates to $30million for 10,000 ford fiesta cars. While the payback period for the project was approximately six months. 

Benefits

Running a social media campaign for its ford fiesta car launch has help generate about $25 million monetary benefit with six months of the campaign. This has also helped the car company improve its customer engagement effort and created sales leads for the car brand as a whole.

Tangible benefits

·         Reduced cost of acquiring customer insights

·         Reduced marketing cost by using the viral power of social technology platforms to drive sales leads

·         Increase in sales beyond standard benchmark for launches through other media channels

Intangible benefits

·         Increased marketing effectiveness. For example, 6.5million views on youtube within the campaign period

·         Increased collaboration with its customers on how to serve them better

·         Increase in innovation based on customer insight

·         Codified knowledge gained through successful social media campaign

Strengths and Weaknesses

Strengths

•    the campaign helped ford motors generate sales of more than 10,000 cars within six days of launching the ford fiesta car
•      the cost of marketing to generate that same number of sales was far less than that of traditional media channels.

Weaknesses

•      The data provided based on the number of youtube video views of 6.5 million cannot be directly linked to the sales generated.
•        The cost of executing the campaign is an approximate figure based on the first month data release for the campaign. And the net profit for each ford fiesta is an assumption made.

Conclusion

Social media marketing is a very effective means of collaborating with partners and employees. It provides effective means to engage customers which can often lead to valuable customer insights at a very low cost compared to using other mediums. But the challenge of using social media marketing is that most of the benefits attributed to it are intangible while a small number of the benefits are tangible. As the use of this technology tools reach its critical mass more and more organisations will discover ingenious ways to measure its tangible benefits that can be tied to a monetary return on investment.

What interests you about what you have read on the mouthwatering ROI of the ford fiesta social media campaign? Share your ideas and thoughts below in the comment area.

Reference

Newman, A., Thomas, J., & Ebrary. (2009). Enterprise 2.0 implementation. New York: McGraw-Hill.