The Return of Investment of Social Technologies

Over the course of all the posts I have published on this blog I have discussed the many reasons why social media and enterprise 2.0 is a viable tactic in the business world when it comes to building a customer base and marketing products. What I have yet to discuss is the financial return on such an investment. The importance of a financial incentive for implementing enterprise 2.0 and included social technologies is so businesses seek out these methods and stick with them. Return of Interest is calculated to determine the total profit returned from an implementation, it can be found from the following equation:

return on investment (%) = (Net profit / Investment) × 100

As an example, say a company earns a Net profit (Gain-Cost) from their marketing strategy to a total of $100,000. For the example lets also say they had an Investment of $50,000 and that the point from implementation to evaluation is 6 months. If we calculate the ROI as below:

ROI = (100,000 / 50,000) x 100

ROI = 200%

In this example the company had a return of 200% of their investment within the 6 months of their marketing strategy. This is a successful ROI as the company doubled their investment. Many factors have to be taken into account when calculating the ROI, every cost and profit needs to be weighed in for evaluation otherwise the company could get a untrue ROI.

Onto a real world case study, I am sure many of you may have seen the youtube videos 'Will it Blend', if you haven't then follow this link. What you may not know is that the series is funded by BlendTec who sell blenders. Upon uploading videos of their blenders destroying just about anything to social media website Youtube they noticed a significant jump in sales. Blendtec reported a 700% increase in sales soon after their Youtube channel launched. Now as Blendtec has not published their finances online we can only exaggerate their ROI. As their sales went up 700% from publishing a few 2 minute videos online the ROI must have been at an immense percent.

An Estimation of their ROI:

Before sales BlendTec was your high-end blending company maybe selling 10,000 units a month in the US. Each unit would have been sold to wholesalers at around $80. This gives them an annual sales profit for their medium sized company $9,600,000. Their costs (still exaggerated for the exercise) may have been $50 per unit to manufacture, $300,000 per year for a small marketing team, $400,000 for a small accounting team, $1,000,000 for factory employees and $500,000 for office employees. This leaves them with $1,400,000 left to spend on uncalculated expenses.

Now if the company invested $200,000 a year on their high-quality YouTube channel their ROI would be as follows:

Cost of Investment = $200,000
Expected Sales Profit (after manufacturing cost) = $3,600,000

Actual Sales Profit (after manufacturing cost) = $25,200,000

Profit Added to company = $21,600,000

Net Profit of investment = $21,400,000

ROI = (21,400,000/ 200,000) x 100

ROI = 10,700%

While this ROI is most likely not exact I would not doubt it is far from the truth of BlendTec's successful Youtube campaign. In conclusion you can see just how immensely profitable a social media presence could add to a company, albeit such cases as BlendTec are as rare as winning the lottery.

Marvel in Social Media

In this blog post I will be reflecting on my analysis of Marvel Comics' social media presence. I used social media monitoring applications such as Addictomatic, Socialmention and Omgili. In this blog I will cover the strengths and weaknesses of each application over my analysis. First a quick description for those who don't know of Marvel Comics, Marvel is one of the top comic book publishers internationally and is responsible for producing cult classic movies such as the Avengers and X Men. 

In my analysis first with Addictomatic I found relevant fan blogs through the wordpress and google blog searches. Such searches provided a large fan base that supports the comic book company. Although there were many fan-made blogs returned no official blog posted by Marvel comics. All other social media searches through Addictomatic returned barely related content, some results were even more related to DC Comics (Marvel Comics' primary competitor) than to Marvel. Addictomatic I can conclude is effective at finding Marvel fan related articles and blogs but does not specifically find posts created by the company in question.

Addictomatic results for Bing news and Google blog search

The second web application I used to analyze Marvel's online social media presence was Socialmention. I would like to first mention (pun intended fully) that Socialmention works rather differently than Addictomatic, instead of having multiple feeds displaying different sites, SM displays all relevant results in the same feed. All of the results returned from Socialmention were by fans or followers of Marvel, the majority of results being photobucket pictures and tweets. SM would be a good medium for an advertising company that is hired by Marvel to evaluate market base and how they could create things to interact with it.

SocialMention results

The final web application that I used in my analysis was Omgili. It is quite similar to SocialMention but has less focus on result statistics and more focus on the results themselves having snippets for each result returned. There is little to say bout Omgili other than it allows a user to do much the same as the other two applications, its speciality being in ore depth for individual results. 

Omgili results

In conclusion all three social media monitoring tools are effective in the same thing. Their differences are minor but by sheer volume of results Addictomatic wins out of the bunch as it allows for quicker analysis of social media. 

Professional Enterprise 2.0 Strategy

This week I will be going into detail on yet another organisation and identifying how yet more social media value levers influence the social technologies used by the said organisation. This week the focus is on the Professional Services Sector. The company I have chosen to investigate is Optus company the Australian Telecommunications company. To analyse how Optus uses social media technologies we can analyse their social presence primarily through Facebook and Twitter. Optus has a smart, casual and friendly social attitude to their social media approach. They remain in communication with customers through their online social media presence.

Optus' Facebook profile has 133,364 likes as today and 1,826 people talking about it. Their staff frequently comment on Facebook users with insightful and friendly posts that reinforce their policy. Below is an example:

This helps to build confident and strong relationships with the customers of Optus. As the interactive aspect of their social media binds users to the Facebook page. Optus' Twitter page is more business oriented with Tweets as such it is aimed at a different audience, more investors and business clients than the casual approach of Optus' Facebook profile. Their Twitter page has 30,511 followers and has made 121,237 tweets. Optus' Twitter account follows a professional online etiquette such is visible in the picture following:

Twitter allows Optus to build strong business ties to their professional customers as they can keep updated with company related news with the almost daily posts. Both Optus' Facebook and Twitter accounts benefit their company by establishing a bridge of communication to their customers. This allows them to follow some of the social media value levers such as:

• Customer Service
• Providing customer care via social technologies
• Marketing and Sales
• Deriving customer insights
• Using social technologies for marketing communication and interaction
• Generate and foster sales leads
• Social commerce

The above two categories of Value Levers are the two most relevant to the social aspect of Optus' Social technologies. In the field of customer service followers of the company can ask questions through Facebook and receive informative replies on topics regarding to future products, sales and other things similar. The other aspect of their social media presence is to foster sales leads through the use of Marketing on their websites. Promotions and new products are advertised on both their Facebook page and their Twitter page. 

In conclusion Optus' online presence through social media benefits both itself as a company and the customers bridging their communication in a medium that allows quick and informative discussion.

Value Levers in the Not-For-Profit organisation Wikipedia

In previous blog posts I have covered Social Media Value Levers in commercial organisations. While there is a lot to learn from commercial organisations we can also analyse how non-profit organisations use Social Media Value Levers to their own advantage. I have chosen to analyse Wikipedia, who as pretty much everyone on the internet would know provide a free encyclopaedia service for the Internet. If you have ever researched something through google chances are a wikipedia page was right at the top of the results. Wikipedia was not always a bastion of information and knowledge, as it is sourced one hundred percent by the community in its early days it there was much disinformation and many incorrect facts. 

The Social Media Value Levers used by Wikipedia can be summed into four main social technologies:

• Collecting Information and Insights
• Gathering information for their service
• Crowdsourcing resources and solutions

• Mobile Resources
• Fundraising
• Creating and expanding volunteer networks
• Retaining support

• Executing their Mission
• Educating the public
• Engaging with supporters

• Social as Organisational Technology
• Improve collaboration and communication
• Rapid organising

Wikipedia uses crowdsourcing for their collection of information for their articles. Any user can contribute to the website and the article will be flagged for experienced volunteers to look over to validate. This allows Wikipedia to generate accurate and insightful information for their high quality articles.

Another Social Media technology that Wikipedia embraces is the use of Mobile Resources. Wikipedia's volunteers are built off of an intuitive discussion environment which allows users to get involved in the research that they are interested in. This allows their volunteers to engage in their fields of research and become dynamic members of the Wikipedia volunteer group which allows Wikipedia to have a large amount of volunteers.

Wikipedia is able to execute their mission of educating the public and engaging in historical discussion through the use of social media value levers. Wikipedia has achieved their mission by educating millions through using their service. 

In conclusion Wikipedia uses Social Media Value Levers to great effect in establishing their online presence.