To What Extent Is the Decision by Ford to Utilize Social Networks an Effective Advertising Strategy?

* Introduction: * Social media websites like Facebook, Twitter and YouTube are becoming a growing place for companies – specifically Ford Motors – to advertise on, with Facebook generating $3. 1 billion in ad revenue last year – around 85% of its total revenue (Raice, Ramsey & Schenchner 2012). Ford now devotes 25% of its advertising budget towards social media (Raice, Ramsey & Schenchner 2012). Ford currently has a channel on YouTube with over 73,500 ‘subscribers’ (Ford Motor Company 2012), a Twitter account with over 148,000 ‘followers’ (Ford Motor Company 2012) and a Facebook page with over 4.

1 million ‘likes’ (Raice, Ramsey & Schenchner 2012). The use of Facebook and other social media websites as an effective advertising strategy is much disputed. While Ford believes the money is worth spending, General Motors Co. withdrew their $10 million Facebook advertising campaign, due to the lack of impact it had on their car sales (Raice, Ramsey & Schenchner 2012). * * The question I am aiming to answer in this report is to what extent is the decision by Ford to utilize social networks an effective advertising strategy.

Within this report I will focus on three different forms of social media websites – all of which are popular – Facebook, Twitter and YouTube. A conclusion will be reached by focusing on the positive and negative effects of using social media as an advertising platform, specifically whether or not Ford’s target market are Facebook, Twitter and YouTube’s main users, promotion via online media websites and the interactive ability Facebook and other social networking sites provide and the effect it has on Ford’s image.

* * Target Market: * Ford’s target demographic in comparison to Facebook and YouTube’s main users is key to determining whether or not the use of social media sites is an effective advertising strategy. According to Cars Guide (2012), Ford’s new cars range from $20,000 to $50,000. From this, it can be deducted that Ford’s target demographic are middle class individuals and families who are of the legal driving age.

According to a recent study by Ignite Social Media, 80% of Facebook users earn $25 000 to $99 999 a year, with 93% being 18 or older, 91% of YouTube users are over the age of 18 and 81% earn $25 000 to $99 999 per year and 93% of Twitter uses are over the age of 18 and 78% earn $25 000 to $99 999 per year (Chappell, 2012). This would define the majority of the users’ on YouTube, Twitter and Facebook as middle class people of the legal driving age, correlating with Ford’s target market. Ford has effectively researched what social media websites their target market is most prevalent on and advertised on these sites accordingly.

Doing so is vital to the ‘People’ section of Ford’s marketing mix, which is important to having an overall effective online advertising strategy. * * Promotion: * Ford’s use of promotion via social media is of particular importance in order to have an effective advertising strategy. Currently, Ford has a Facebook app, ‘Mustang Customizer’, which has been used 4. 3 million times since September, 2011, allowing Facebook users to virtually customise their own Mustang, with a vote based competition running for the ‘coolest’ Mustang (Raice, Ramsey & Schenchner 2012).

The use of this promotional tool has most likely gained Ford attention, due to the number of people using it. Proof that the promotional tool works can be seen in the 18% rise in the sale of Mustangs in 2012 (Raice, Ramsey & Schenchner 2012). In the past, Ford has also used YouTube for promotions, running a competition for 100 blog users in the US to win a motion Fiesta six months before the actual release (Social Media Online 2011). The winners were required to ‘video blog’ about their experiences with the Fiesta. According to Social Media Online (2011), the campaign won a lot of popularity and fame within the YouTube community.

The use of these social websites to promote Ford caught the online community’s attention and Ford seems to be utilising the social networking sites to create promotion competitions, that without social media, would be otherwise impossible. * * Brand Reputation: * Social networking websites have a high level of interactivity and this can either improve the brand’s reputation or tarnish it severely (Brookins, 2012). Ford has Facebook, YouTube and Twitter accounts, all of which allow the public to publicly give feedback.

In order to not let the feedback tarnish their reputation, companies must respond promptly (Brookins, 2012). Time must be invested into managing the pages in order to respond to customer feedback and to keep information relevant. Despite these possible negative sides, Ford seems to be managing such issues effectively. This can be seen in Ford’s twitter page. Scott Monty, Head of Social Media, and Karen Untereker, U. S Social Media Manager run the twitter page, showing Ford has appointed staff to care to invest time and care for their social media page (Ford Company, 2012).

Ford is using social media websites to portray their business in a positive light, as opposed to getting bogged down with negative feedback. Ford utilises the high level of interactivity offered on social media websites to improve their reputation, something that other businesses often struggle to do. * * * * * Conclusion: * In conclusion, Ford, unlike some businesses, has effectively utilised social networks as an effective advertising strategy, and the fact that Ford dedicated 25% of its advertising budget towards it, is much justified.

This is because Ford effectively pinpointed what websites their target market use and advertised accordingly on them, uses promotions via online media sites to raise sales and awareness of their products and boosts their brand’s image and reputation through the interactive capabilities these websites provide. Advertising on social media is only a part of Ford’s larger advertising strategy, and through combining social media with other platforms such as print and television Ford has a well-rounded, effective advertising strategy.

This report proves it is clear that Ford’s advertising on social media is a successful strategy. * * Bibliography * Brookins, M. 2012. “Disadvantages of Advertising With Social Media” Accessed August 21, 2012. http://smallbusiness. chron. com/disadvantages-advertising-social-media-18746. html Business Link. 2012. “Online business networking and social networking” Accessed August 21, 2012. http://www. businesslink. gov. uk/bdotg/action/detail? itemId=1081912566&type=RESOURCES * Cars Guide, 2012. “Ford”. Accessed August 21, 2012. http://www. carsguide. com. au/ford * * Chappell, 2012.

“2012 Social Networking Analysis Report”. Accessed August 21, 2012. * http://www. ignitesocialmedia. com/social-media-stats/2012-social-network-analysis-report/ * Ford Motor Company, 2012, “Ford Mustang”, Accessed August 21, 2012. https://www. facebook. com/fordmustang * * Ford Motor Company, 2012. “Ford Motor Company”. Accessed August 21, 2012. http://www. youtube. com/ford * * Monty, S & Untereker, K, 2012. “Ford Motor Company”. Accessed August 21, 2012. http://twitter. com/Ford * Raice, S, Ramsey M & Schechner, S, 2012. “Facebook Gains Two Big Advertisers’ Support”. Accessed August 21, 2012.