Economic Value

For this assignment, I will examine Ford Motor Company’s app to “Customize Your Dream Mustang,” that can be accessed via their Facebook page or the company website http://www.ford.com/cars/mustang/customizer/. In my blog, I will discuss how this type of marketing can be assessed an economic value.

If Ford Motor Company wanted to assess the economic value of using social media, like Facebook, the company would have to consider the amount of prospected viewers the ad would receive. With this particular type of advertising, Ford is not only banking on their loyal customers to see it, but also their entire social network of friends, family, and co-workers. This creates a chain reaction and allows Ford’s product to be promoted to people that may have never even considered buying a Mustang or any other Ford.

In order for Ford to acquire an actual dollar value for this app, they have to first figure out how mush it costs for each response they receive using their other marketing techniques (TV, print media, etc.). This would give them a base value. Once the base value is established, Ford can then take multiply it by the number of responses this “Mustang Customizer” generated. Let’s explore this philosophy using the following hypothetical numbers:

Ford’s avg. marketing $ spent on print & TV = $5 million

Avg. number/year of sales, quotes, & inquiries = 10,000

Number of participants in Mustang contest = 130,000

If you take the dollar amount spent ($5 mill.) and divide it by the number of responses (10,000) you base cost of $500 per message received. To get the economic value, Ford could multiply the number of contest participants (130,000) by the base cost ($500) for an economic value of $65 million. Keep in mind that this economic value would increase with the additional views of friends, family members, and co-workers of the contest participants.

In short, companies like Ford are utilizing marketing tools available via social media to maximize the marketing efforts and expand their marketing base. Using advertising or promotional contests on websites, like Facebook, is a cost efficient way for companies to generate business and interest. With this promotional contest, ford undoubtedly will maintain relationships with its loyal fan base, but will most likely gain some new fans as well.

References: http://www.ford.com/cars/mustang/customizer/, https://www.facebook.com/fordmustang?fref=ts