ROI of Online to Store: Panasonic Case

Enterprise 2.0 is widely used in organizations, such as Facebook, Twitter and blogs. Social technologies help organizations to create a great communication with customers and have good insights into products. It is easy to find that Enterprise 2.0 brings a lot of benefits for organizations. However, without measurements, companies do not know how much value Enterprise 2.0 technologies have brought for them. Return on investment (ROI) helps companies to measure whether Enterprise 2.0 technologies bring benefits. In this blog, I will use a Panasonic case to discuss the ROI in an Enterprise2.0 project.

Overview Panasonic Case

Panasonic Corporation is a Japanese multinational electronics company, which was established in 1918. It is the world’s fourth largest television manufacture of 2012. The case study of Panasonic is about Panasonic digital cameras (Product x) sales during the online campaign period in a major French retailer. Panasonic spends money on advertisement to promote marketing, such as TV, YouTube, online display and paid search. From this graph, TV advertisement spent 85% of the budget. YouTube, online display and paid search spend the remaining 15% budget, which are 6%, 5% and 4% respectively in the 4^th quarter. The total Revenue is $0.25billion.

Measuring the Costs

The following is that Panasonic spends money on media investment in the 4^th quarter.

Cost for TV Advertisement (85% of the budget) = 17 million

Cost for YouTube (6% of the budget) = 1.2 million

Cost for Online Display (5% of the budget) = 1 million

Cost for Paid Search (4% of the budget) = 0.8 million

Expenses

Expenses	Price
TV Advertisement	17 million
Total Cost (TV Ads)	$17 million
YouTube	1.2 million
Online Display	1 million
Paid Search	0.8 million
Total Costs  (Social media)	$3 million

Measuring the Benefits

There is 15% of offline retail sales comes as a result of ‘Product X’ Brand marketing. Total Revenue is $0.25billion.

Total Revenue (TV Ads) = 0.25 billion *9%= $22.5million

Total Revenue (Social media) = 0.25billion*6%=$15 million

Total Benefit (TV Ads)	$22.5 million
Total Benefit (Social Media)	15 million

ROI of TV Advertisement = ((22.5-17) /17) *100=32. 35

ROI of Social Media = ((15-3) /3) *100=400

From ROI, we can find that Enterprise 2.0 technologies can help Panasonic to get more benefits than TV advertisements.

Tangible benefits

Social media make a great contribution for sales. Even though the investments in social media are not the most the sales were driven by social media, which accounts for 40%. 

Social media don’t only promote ‘Product X’ sales, but also it increases sales of the other Panasonic product during the campaign period.

Intangible benefits

Panasonic uses the Enterprise 2.0 technologies to promote sales, which is a good way to communicate with clients.

It helps Panasonic get insight into its products, after Panasonic gets client’s feedback.

Strength and weaknesses of ROI approach

Strength of ROI approach is that Panasonic uses social media technologies to promote sales, which is not the traditional social media, such as YouTube. Panasonic realizes that consumers have changed the way to get information. Panasonic knows to use new social media to make advertisement and promote sales. What’s more, Panasonic doesn’t use a lot of investments, and it gets a good ROI approach by YouTube. Moreover, the advertisement of ‘Product X’ does not only promote the sales of this product, but also it has a positive effect for the other products’ sales.

Weaknesses of ROI approach are that Panasonic doesn’t use many different kinds of social media technologies during an online campaign period. This is because a single social media technology cannot cover the largest consumer group. Therefore, Panasonic cannot get the most ROI by Enterprise 2.0 technologies. 

Reference List:

Panasonic. (2014, September 26, 23). Wikipedia. 

        Retrieved from http://en.wikipedia.org/wiki/Panasonic

Panasonic Online to Store Case Study a Think with Google. (n.d.). 
        Panasonic Online to Store Case Study a Think with Google. 
        Retrieved from 

        http://www.thinkwithgoogle.com/case-studies/panasonic-online-to-store-case-        study.html