Trading Mass media for Social Media

Trading Mass media for Social Media

Effective Advertising on Social Media

White paper

Prepared by Outback Social Media Communication Team Zhao Liu, Brian Giaquinta, Miao Li, Yi-Hsuan Chang, Shaojing Wang Prepared March 31, 2014

Prepared for The Management Department of Outback Steakhouse

Trading Mass media for Social Media

Table of Contents
Executive Summary Introduction Problem: Ineffective telework management is a threat to ITI. Solution: Develop a system for productive teamwork and collaboration Conclusion References 3 4 5 7 10 12

Trading Mass media for Social Media

Executive Summary The following report examines the issues associated with Outback Steakhouses current marketing and promotion strategy and offers innovative solutions to combat these issues. Outback Steakhouse used mass media to attract new business and promote its brand name. However, it has come to the attention of the research team that, as technology and consumer behavior rapidly change, this method of marketing becomes less and less effective relative to its high cost of implementation. As a result of these issues, our team has concluded that Outback Steakhouse should implement a social media marketing platform, which will include the creation of a company profile on all of the leading social media outlets, a campaign which will serve to recruit followers to said profiles, and a revamping of the corporate public relations strategy to include social media outreach. Trading mass media for social media leads to three major benefits, all of which will ultimately have a positive effect on the bottom line. Low cost, wider reach and immediate feedback from customers will lead to positive growth and happier consumers. The interactivity feature allows the company to virtually eliminate all costs associated with customer feedback, which in turn will reduce human resource related costs. With a systematic plan in place for converting Outback Steakhouses promotional efforts to focus more on social media outreach, the cost of marketing will be significantly reduced resulting in stronger bottom line performance. Furthermore, leadership will be better positioned to respond to consumers concerns due to the interactive nature of modern social media.

Trading Mass media for Social Media

Introduction Outback Steakhouse has over 2000 locations in 25 countries around the world. It was founded in 1990 in USA. With more and more locations setting up, we spent more money in commercial to promote our products in order to increase the brand awareness and sales. Outback Steakhouse has used mass media to attract new business and promote its brand name. Declining profits can be directly attributed to the high investment cost of purchasing commercial time, and low-yield marketing campaigns are the result of televisions declining viewership, the limitation of the audience that can be reached via television commercials, and the lack of immediate feedback from potential consumers. According to our financial report, we found out that the cost of mass media from 2008-2013 is increasing. However, the Return of Investment (ROI) is decreasing. Especially in 2013, we spent 500,000 dollar in mass media, while only 20% of ROI (2013 Financial Report of Outback Steakhouse, 2014). After 2013, more and more people get the advertising from social media instead of mass media (Omni, 2013). For Outback Steakhouse to become more competitive within the industry, it needs to reduce existing inefficient mass media advertisement, which will in turn reduce costs and increase social media advertising exposure. Therefore, a new cooperate social media communication team is established.

Trading Mass media for Social Media

Problem: Ineffective Mass media advertising
1. High Cost

The main way the restaurants products and services are promoted is through TV, magazine and newspaper Commercials. However, this type of mass media promotion is extremely expensive and becoming less effective. Plans to purchase national commercial coverage have been discussed, but the budget is simply not flexible enough to justify such an investment. According to The Washington Post, the 30-second commercials cost approximately $4 million per spot during the 2014 Super Bowl (Kay, 2014). Popular television programs such as American Idol average $310,000 per commercial time slot (Crupi, 2014). Therefore, our current focus is on local advertising, which is far less costly but covers a much smaller network. Based on the financial statements, Outbacks advertising efforts consumed nearly 50% of its total costs while yielding a mere 20% return on investment as major restaurants turn to social media for promotional purposes. In order to lower costs and increase ROI, we suggest a switch from mass media to social media to promote the restaurant. 2. Limitation of the audience There is no doubt that mass media has a large number of viewers. However, with the appearance of new media and the development of social media, the dependency on mass media has decreased significantly. Furthermore, the recently discovered phenomenon of audience fragmentation has led to more effective advertising efforts via social media versus mass media. Media systems dependency theory (MSDT) believes that the audience seeks mediated information to meet their demand (Ball-Rokeach & DeFleur, 1976). Based on the different

Trading Mass media for Social Media

demand levels of different audiences, our new cooperate social media communication team is able to divide audiences into categories that allow us to objectively determine where the most effective advertising can be done. The result shows that people rely on mass media to acquire financial and international news, but rely more heavily on social media for entertainment news and commercial information, as shown in figure 1.
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Unconcerned New Media Traditional Media

Source: Outback cooperate social media team

Figure 1. The comparison of media dependency between Mass media and New Media

3. Lack of immediate feedback Mass media is disadvantaged in that it is incapable of retrieving and responding to customer feedback. Given the ever changing behavior apparent in modern consumers, it is imperative that a growing business be able to respond to customer feedback in a positive way. Previously, Outback has failed to accurately represent their target audience in advertisements because of the time lag between feedback and the launching of new marketing campaigns. As a
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Trading Mass media for Social Media

result of this, customers are lost and ultimately profits suffer as more and more money is dumped into ineffective mass media advertising. So, we urgently need to use some new channels to bring our promotion to our customers immediately. Social media is the best choice through free platforms such as Google, Facebook and Twitter, where we could get in touch with our customers in a timely manner.

Trading Mass media for Social Media

Solution: Establish Social Media Advertising Adopting social media brings the company three major benefits, as shown in Figure 2. Firstly, the social media outlets which will be utilized by the execution team are free of charge, meaning the costs incurred by the company will drop significantly. Furthermore, modern culture has shifted almost disproportionately toward social media versus television, meaning the reach of a social media presence will be far wider. Lastly, and arguably most importantly, an interactive social media marketing strategy allows Outback Steakhouse to get immediate feedback from its customers so that it can constantly strive to be the best in the industry in every part of the world, as shown in the figure 2.

Source: Outback cooperate social media team

Figure 2.Social Media Advertising Processes

Trading Mass media for Social Media

1. Low Cost Social Media Platforms Social Media platforms include blogs, wikis, social networking sites, photo-sharing sites, instant messaging, video-sharing sites and podcasts which are the Internet-based form of communication. Those allow users to have conversations, share information and create web content. In addition to these advantages, most social networking sites like Twitter, Facebook, YouTube, and Yelp are free to set up. Therefore, our restaurant set up the Twitter, Facebook Fan Page and Yelp since 2010, 2011 and 2012, respectively. In order to strengthen our restaurant promotion via social media, we pay less money to these platforms. For example, a cost per click (CPC) cost models allows the client to pay only when someone clicks on the advertisement on Facebook. Twitter, on the other hand, offers different advertising options promoted tweets, which cost $.50 to $4.00 per engagement, lead to increased exposure when compared to average Twitter users posts (Alleger, 2013). We only pay when users interact with our ad by clicking, replying, retweeting or favoring our tweet. For Outback, these costs average $1.35 per engagement. According to the first quarter financial report, Outback spent around $500,000 on Facebook and Twitter ads. Additionally, around $50,000 was spent in recruiting and training employees to maintain the social media platform and interact with customers. 2. Wild Reach & Interactive Technology has changed our lives, the way we are influenced and how we influence others. Social media marketing is taking over the traditional marketing landscape due to its wide reach nature and audience interactivity. Social media can be used by people of all ages around the world. The internet has broken the geographic restriction. The perception is that social media reaches young people primarily, but its growth is explosive and far-reaching. The audience of
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Trading Mass media for Social Media

social media is interactive, whereas the audience of traditional marketing is passive. This enabled people to search for the information anytime, anywhere. Consumers can actively choose to follow or like certain businesses (McKever & Teresa).They can easily forward the promotion or information to their friends and followers. 3. Immediate Feedback An official social media account will allow the promotion team to make sure the company is immediately aware of things being said about the company after advertisements are posted. Given useful feedback on our public relations engagement, the strategic team will be able to immediately respond with developmental ideas on how to combat the issues. Outback also has the leverage to give benefits to customers who generate useful feedback through discount or promotions (Paternoster). Strengthening the relationship between the customer and the business is of paramount importance as Outback strives to grow as a leader in the industry. Positive growth will be catalyzed by transparency between the business and the customer through social media.

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Trading Mass media for Social Media

Conclusion For the reasons outlined in this report, it is the conclusion of the consulting team that Outback should reduce its investment in television commercials and implement a new and improved social media platform to reach out to new consumers and generate active and immediate feedback. By nature, a restaurant business should be designed to ensure a high quality customer experience, maximize bottom line profits, and adapt to changing consumer behavior. Immediate feedback from customers will allow Outback to develop ways through which the customer experience can be enhanced. Exposure to other markets that were once untapped by the restaurants services will lead to global growth and therefore increased profits. Social media is rapidly taking over television mass media as the popular marketing outlet among the worlds leaders in business, and Outback will position itself well to adapt to world changes by adopting this plan. For this decision to be made, social media communication team can begin the social media marketing process before the end of the fourth quarter this year.

Social Media Communication Team Phone: 352-211-1234 Email: outback_socialmedia@gmail.com

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Trading Mass media for Social Media

References (2014). 2013 Financial Report of Outback Steakhouse. Outback Steakhouse. Alleger, J. (2013, December 11). How Much Do Ads on Twitter Cost? Retrieved from Blog Entries: http://www.ppbh.com/how-much-do-ads-on-twitter-cost/ Ball-Rokeach, S. J., & DeFleur, M. (1976). A dependency model of mass-media effects. Crupi, A. (2014, January 15). Ford, Coca-Cola Return for Season 13 of American Idol. Retrieved from ADWEEK: http://www.adweek.com/news/television/ford-coca-colareturn-season-13-american-idol-155001 Facebook. (n.d.). Ad Set Cost & Budgeting. Retrieved from Facebook: https://www.facebook.com/help/318171828273417/ Kay, A. (2014, Feburary 2). Super Bowl Ad Costs: Latest Info on Cost of 2014 Super Bowl Commercials. Retrieved from Bleacher Report: http://bleacherreport.com/articles/1945417-super-bowl-ad-costs-latest-info-on-cost-of2014-super-bowl-commercials McKever, C., & Teresa. (n.d.). Retrieved from wikiHow: http://www.wikihow.com/Tell-theDifference-Between-Social-Media-and-Traditional-Marketing Omni. (2013, January 2). Are you prepared for 2013 Social Media Marketing? Retrieved from OMNIBEAT: http://www.omnibeat.com/are-you-prepared-for-2013-social-mediamarketing/ Paternoster, L. (n.d.). Gathering customer feedback offline and through social media. Retrieved from Institude of Customer Service: http://www.instituteofcustomerservice.com/18496440/Gathering-customer-feedback-offline-and-through-social-media.html

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Trading Mass media for Social Media

White Paper Benchmarks

Component
Content (25 points)

Exceeds Standards
(22+ pts) 22

Meets Standards
(20-22)

Not Meet Standards

(<20)

Summary

Generalizes efficiently and with reader and purpose in mind Validates information with details, logic, and source Emphasizes the important and de-emphasizes the unimportant Focuses on readers needs and goals persuasively Avoids direct quoting of material and paraphrases successfully Executive Summary provides an overview of the White Paper Reflects the logos (facts and figures the reader needs), pathos (benefits to reader) and ethos (credible information) Provides specific information of use to the reader (cost, timeline, personnel, for example) Action statement in conclusion (22+ pts) 25 (20-22) (<20)

RECOMMENDATION

Organization (25 points) Summary Presents supporting details in a logical sequence Uses an appropriate writing strategy (frontloaded, persuasive) Introduction: problem and, proposed solution Conclusion: sum of key points and appropriate action step Introduction and Conclusion are stand-alone paragraphs Style (20 points) Adheres to clarity principles, using active voice, unambiguous subjects (no this or it or these), and appropriate language for audience. Follows concision principles (few words, minimal negatives, few superlatives) Avoid unnecessary passive Keeps paragraphs relatively short and accessible by covering just one topic, including a transition word or phrase every 2-3 sentences, and consistent word choice No vague superlatives Keep sentences relatively short, but with some variation in length Word choice results in acceptable, professional, positive tone Format (20 points) Clear interpretation of correctly formatted graphic before the graphic Single space lines, leaves blank space between paragraphs, non-indented paragraphs, left justified, one inch margins Correct short report format (title page, works cited page,APA) Descriptive, concise title with element of persuasion(APA) Descriptive headings to label major sections, properly formatted (APA) Highlights text for emphasis and easy reading (e.g., bulleted or numbered lists, italic type) used sparingly and appropriately APA Format followed: internal references and reference list at end of document Document saved properly (lastname_proposal) Mechanics (10 points) Spelling, grammar, and punctuation perfect, no missing words or misused words

(17+ pts) 17

(16-17)

(<16)

(17+ pts)

(16-17) 17

(<16)

(8+pts) 9

(7-8)

(<7)

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Trading Mass media for Social Media

TOTAL / Comments 90

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