Analysis on Ford’s social media strategy

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Analysis on Ford’s social media strategy

  1. 1. Ford: Social MediaStrategy“What’s the ROI of putting your pants on in the morning?” – Scott Monty,Fords global digital/multimedia communications managerArun Abraham, Marta Karolak, Tarak Parekh
  2. 2. Arun Abraham, Marta Karolak, Tarak ParekhOverviewFord was founded in 1903 by Henry Ford. The company manufactures automobiles andcommercial vehicles under the Ford brand and luxury cars under the Lincoln brand. It is the 2ndlargest U.S based automaker and the 5th largest in the world based on 2010 sales. Ford hasbecome a pioneer among auto manufacturers by integrating social media (SM) into its marketingstrategy as well its internal culture. Via its SM efforts, Ford has worked to humanize the brandand has become the most followed and influential auto brand on various SM channels.Ford’s Social Media StrategyFord’s social media strategy can be analyzed using the traditional Sales/Marketing funnel. A carpurchase can be broken down into the following categories: Trigger, Consider, Evaluate, Buy,Use/Post-Use. Ford engages potential customers through all the stages of the funnel usingvarious tactics as shown in the diagram below. A majority of their effort appears to increase theirpresence at Trigger stage (given the conversion rate applicable to the funnel). They achieve thisby a) Being present on all the social media platforms where customers might expect them to beand b) Allowing users to share their experiences about Ford readily. Engaging customers later inthe funnel is ineffective - a view espoused on several occasions by Mr. Monty. Ford needs to betop of mind for people and have been placed there by individuals they trust – those in their ownsocial networks. This idea is supported by recent research in a paper titled “First is Best” (byProf. Dana Carney et al). Their study finds people consistently prefer the options that come first1.1“First is Best”: http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0035088
  3. 3. Arun Abraham, Marta Karolak, Tarak ParekhAdditionally, there is focus on the Use/Post-Use stage for community creation via channels suchas the Ford Mustang Facebook page or the Your Stories section of the social.ford.com site. Thisserves 2 purposes – 1) The creation of a Loyalty loop where existing Ford customers purchaseFord again, 2) Leveraging social networks to spread Word-of-Mouth.Finally, Ford has recognized the importance of presenting its dealers in a consistent manner onSocial Media channels. To that effect, it has started a program – Ford Direct, which allowsinventory management (online) as well as reputation/review management for the dealers.Ford’s presence in the Automotive Purchase Funnel•Replace Old Car•New Funds•Family Growing•Ad-hoc triggersTrigger•Budget•Features•BrandConsider•Reviews•Enjoyable driving•Good looking•ServiceEvaluate• Dealer Selection• FinancingBuy•Rave/Rant•Service•Maintenance/Repair•ShareUse/Post-Use(Durable good)Ford Social Media- Events, partnerships- WOM fromUse/Post-Use- Friends/Family- Friends/Familyrecommendations- Pictures/Sentiment- CelebrityEndorsements- Facebook Community- @FordService- Idea crowdsourcing- Social.ford.com- Badges- Friends/Family FBRaves- Ford Dealer DirectConnectionMetricsThe table in Appendix 1 documents Ford’s considerable presence across the major SM channels.Ford seems to have a far larger presence on Facebook (12m followers) than on Twitter (500K
  4. 4. Arun Abraham, Marta Karolak, Tarak Parekhfollowers), YouTube (100K), Flickr (2K) or other networking sites. This presence is nuanced inthat their engagement on various social networking sites seems to align with the targetdemographic2for the social networking sites. For example: SUVs (geared towards families) havemore engagement on Facebook, whereas compacts seem to have more engagement on Twitter(which resonates highly with millennials). Additionally, communities & fan circles around abrand such as Mustang that resonates well with its owners’ stand out regardless of the channeland enables expression of the owners’ love for their Mustangs.Ford’s relatively new website FordSocial attempts to aggregate all social interactions acrossmultiple social platforms in one place – a one-stop shop for all that is social about Ford. Fordseems to have capitalized on its lead in social media by having the largest number of followersamong the major auto manufacturer brands. Comparisons of Ford’s twitter presence with that ofGM and Chrysler are summarized (via Twitonomy) in Appendix 2.Social Media TimelineSome of the major milestones of Ford’s Social media strategy are shown on the timeline below.2http://www.ignitesocialmedia.com/social-media-stats/2012-social-network-analysis-report/2007• Started Facebookpage2008• Scott Monty joinsFord• (July) Joined Twitter2009• Ford Fiestamovement2010• Launch of theexplorer.2011• Launch ofsocial.ford.com2012• Plug N Play in ElectricCity with the 2012Focus Electric.• Random Acts ofFusion
  5. 5. Arun Abraham, Marta Karolak, Tarak ParekhFord’s first foray onto the major social networks involved creating a Facebook page in 2007.Until 2009, most of the interaction on Facebook was primarily between Consumers. Post 2009,which coincides with Mr. Monty’s hiring, Ford has actively participated conversations onFacebook & Twitter, working to humanize the brand. In addition to customer engagement, Fordhas effectively used SM for exclusive digital-launch events for some its new models. Forexample, Ford launched Fiesta (a sub-compact car) in the USA via a social media event,providing Fiestas to 100 drivers who blogged, tweeted and posted about their experiences withthe car for six months. The Fiesta movement cost around $5 Million for a net effect of thecampaign close to $100 million.Encouraged by the success of their first campaign, Ford then launched the Explorer in 2011through an online event, and is now engaging potential customers through its “Random Acts ofFusion” campaign for the 2013 Ford Fusion release. The campaign is driven through a dedicatedwebsite and encourages customer to check out the new model and provide their views on the car.Their recent introduction of Badges ties in a social element with visual expression, allowingowners to express their achievements as well as allowing Ford to tailor content to the customers.Designing and Realizing Marketing ObjectivesThere are three main objectives to Ford’s SM strategy. We analyzed them in terms of approachto reaching the target audience and how appropriate the communications are for the segments.1) Awareness & EducationConversations: Ford creates awareness and education among potential and current customersthrough three main channels: 1) Twitter and Facebook when new products are launched or whenfeatures are upgraded, 2) Through videos and celebrity endorsements to create buzz about
  6. 6. Arun Abraham, Marta Karolak, Tarak Parekhproducts, 3) Facebook apps such as the Mustang customizer, which has been successful in bothengaging users and creating awareness about Ford among the friend circles of customers.Appropriateness: Ford has used the social media channels both from a traditional marketingperspective in educating the existing Ford customers about upcoming Ford events, models andchanges to its lineup. By being present on all the possible social media channels, they rely onword-of-mouth, as well as participating/sponsoring events (such as the joint event with Pandora,where Ford donated to charities chosen by music artistes3that could potentially serve tointroduce the brand to potential customers.2) Humanizing and CredibilityConversations: Ford’s social website aims to engage customers with Ford employees. The ideassection encourages users to post new features for future Ford products. Dedicated staff monitorsand updates social media to ensure that Ford knows when people are talking about the brand andcontact them as soon such as possible regarding customer service issue reported via the@FordService handle. Approximately 2000 requests/week are handled via this medium.Appropriateness: Humanizing the brand is at the core of Fords stated social media strategy.This helps people get past the Big bad corporation issue and allows Ford to tap into and respondto comments, suggestions, and complaints directly. Customers find it convenient and feel heardwhich builds credibility. Ford also “follows” many of their customers rather than just monitoringthem, which aims to further show that they care about their users.3) Loyalty and Community buildingConversations: One of the major initiatives for community building is the social.ford.com3http://media.ford.com/article_display.cfm?article_id=33310
  7. 7. Arun Abraham, Marta Karolak, Tarak Parekhwebsite where customers share stories about their Ford automobiles. As one could expect, wedidn’t find it very effective as we see that there are very few comments/likes on the user posts.The Ford Facebook page and apps seem much more engaging. They manage several campaignssuch as Ford Driving Skills for Life where users share their driving experiences. Ford alsofeatures several photographs shared by users on their Facebook page which engage customers toshare their experiences with each other and create a positive vibe.Appropriateness: Ford believes that a car is an emotional purchase for people. Ford leveragesthis to enhance consumer-consumer interaction by providing a social board (such as FordsMustang page on Facebook) for people to share & express their love as well as connect withother enthusiasts. They use their Facebook page to run contests (such as the MustangCustomizer) to involve people to create as well as engage people to vote. They "reward" winnersby providing prime web estate on Fords FB page (such as Mustangs cover photo, which featuresthe current winner). They have also leveraged enthusiasm by starting a Badge program thatallows people to display their brand loyalty. To date, their 6 most popular badges have beendownloaded approximately 750K times4.Resources EstimateAnalyzing information gathered from various interviews with Scott Monty, we estimate Ford’sannual social media marketing budget to be between $100-$125 million. Based on ourconversations with people with similar responsibilities, we list down some of the main costdrivers of Ford’s social media campaign. Detailed estimates of these costs are in Appendix 3.4http://www.joakimnilsson.com/case-studies/how-ford-social-energized-their-core-customer-base-with-badges/
  8. 8. Arun Abraham, Marta Karolak, Tarak Parekh Social Media staff – Between 30-35 employees. Mr. Monty alludes to a staff of 40employees who work on social media strategy (Not all of them full-time) – $4-5 million. Website (FordSocial, Events), Facebook & Mobile applications - $1 million. External branding/social-media firm (Team Detroit) Celebrity endorsements, Content partnerships, donation to charities. Events (including car giveaways, community involvement), Audio/Video creation.Recommendations/CritiqueFord has come to be regarded as one of the top companies (see Appendix 2) in terms of socialmedia given their steadfast focus and deep understanding of the utility of the various socialmedia platforms. They continue to evolve and utilize social media to engage and buildrelationships with their existing and potential customers.There are several areas we believe where Ford could improve their social media approach:1. FordSocial (social.ford.com): The site does not seem to have considerable activity - nor doesit seem thoroughly streamlined with other SM platforms – So better awareness and ease ofuse would help drive traffic.2. Ford should also consider the potential pitfalls of Scott Monty’s personal interests vs theFord brand. This might lead to some potential conflicts of interest. For example, the @FordTwitter handle links back to @ScottMonty, where Mr. Monty posts his personal views.3. Increase resources during “Buy/Purchase” phase: Improve ways to help customers choosedealers based on word-of-mouth recommendations.
  9. 9. Arun Abraham, Marta Karolak, Tarak ParekhAppendix1. Highlights of Ford’s Social Media PresenceFacebook(Likes/Discussions)Twitters(Followers/Following/Tweets)Youtube(Subscribers/Videos/Views)Corporate 1,654,101/36,241161,199/33,186/9,87182,072/360/5,347,583Fiesta 260,918/299320,419/8,899/2,7511,587/60/2,964,382Fusion 245,908/17,6292416/12/173130/531/449,595Mustang 4,537,489/110,90554,110/8,618/61710,583/108/7,352,763Ford Trucks 674,448/8,84743,686/6,214/5626,458/65/4,238,389Ford Focus 510,572/6,52312,972/4,275/479Ford Explorer 223,944/6790 2,068/XX/4,502,538Ford Escape 103,327/14,1363442/1612/686Ford Edge 56,881/7280Ford Flex 48,847/4010Ford UK 112,181/99023485/3043/2841
  10. 10. Arun Abraham, Marta Karolak, Tarak ParekhFord Brasil 147,870/36440Ford Mexico 140,660/513010303/5659/117722. Twitter comparison between Auto Manufacturers
  11. 11. Arun Abraham, Marta Karolak, Tarak Parekh
  12. 12. Arun Abraham, Marta Karolak, Tarak Parekh3. Cost BreakdownScott Monty has said in an interview (Business Insider) that Social media and digitalmarketing efforts come up to about 25% of the total marketing budget. 80% of is online paidads (digital marketing) which means social media is roughly 5% of the annual budget..Annual marketing budget is $2.5 Billion. $2.5 Billion * 25% * 4% = $125 Million is the annualmarketing budget.An estimate of the break-up of this figure is shown below: Mr. Monty has stated that around the world, 40 people are working on social media,but not solely dedicated to it. Assuming a 50% utilization of their efforts and anaverage salary of $100,000, the spend on labor for social media is around $2 Milliona year.
  13. 13. Arun Abraham, Marta Karolak, Tarak Parekh 20 Assets * $3000 = $60k Photoshoots = $50k * 20 = $1 M Facebook application development = $100K Website development and maintenance = $5 Million Ford also contracts an agency to oversee its social media campaign which weestimate for be around $10 Milllion For the Fusion launch, Ford has tied up with 3 celebrities. Estimating this costs to bearound $10 Million. They are also rolling out 100 sedans. Assuming a cost of $25k, this comes to $2.5million. Social media events such as “Random acts of Fusion” - around $10 Million using the2009 ford fiesta movement ($5 Million) as a reference. Ad spending on social media websites such as Facebook and Twitter - $5 Milllion.4. Sample of TweetsTweet Retweets InferenceRetweet if youve driven a @Ford truck thisweek! /via@raymotorco (CC @FordTrucks)164 trying to engage the users andmaking them retweetHappy Birthday Henry Ford! It’s hard tobelieve you’re turning149!http://t.co/BjZNFrUl121 remind people about Ford’s historyAs of today, weve produced 350M cars! Seewhat that meansto:@Oreo, @McDonalds, @CocaCola, @Yoplait & @GeneralMills http://t.co/3GbXdjRH82 Comparing the company to otherwell-known brandsUrgent safety news for owners of the 2013Escape with 1.6 literengines: http://t.co/PFJ138cI64 Trying to show that they care forcustomer. Also inviting customersto follow them to get quick updatesFord uses recycled blue jeans to absorb sound 63 Portraying a green and caring face
  14. 14. Arun Abraham, Marta Karolak, Tarak Parekhto make your ride extra quiet. Where do youspend time that you wish could be just asquiet?of the companyToday we announced Q2 results: pre-taxoperating profit of $1.8 billion, $0.30 pershare,driven by N. America & Ford Credit. $F44 Targeting investors and show thecompany’s healthy state. Couldalso be a signal to the customersindicating that the company isdoing well and is reliable in thelong term.Best New Car Feature Currently On theMarket? Well take it! Vote for us in.@ebaymotors Peoples Picks. bit.ly/PHTAiDGetting suggestions and votes fromusers – Engagement5. Purchase-Intent Tweets

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