A successful use of Return on Investment and Social Media

Written on Tuesday, 1 October 2013 by Chris Vo

Alas, closure to the blogging saga with this final blog post. This week's post is measuring the ROI of social media for Cadbury.


Image source by Cadbury Chocolate

Return on Investment (ROI) is a topic that any business should be very familiar with. There are two ways of calculating ROI. The standard calculation involves a measure of a corporation's profitability, equal to a fiscal year's income divided by common stock and preferred stock equity plus long-term debt.

The other methods involves non-financial returns. How I believe ROI is calculated is when investment on a product or a service is measured against the benefits or values expected to be received whether it is profit or something intangible like increased productivity.



Image source by RMS 

This is crucial for businesses intending to venture on social media platforms as this can indicate whether using social technologies would be worth doing. Let's use Cadbury as an example to calculate how they managed to receive a ROI by using social media.

Cadbury Wispa Bar


Long before I was born in 1981, Cadbury introduced on the shelves the scrumptious milk chocolate, Wispa that everyone loved before disappearing off the shelves completely in 2003.

Image source by CargoCollective
Consequently, the entire population of UK initiated a petition to demand their beloved Wispa bar back on Cadbury's Facebook and Twitter page. Cadbury responded by sending out 40 million bars to the market! After 18 weeks to responding to the petition, all 40 million bars were sold. This added an additional 30% to Cadbury's annual profits.

How did this happen?


I wasn't able to find the exact number of followers they had on their Twitter and Facebook page at the time but we can assume it was more than enough to force Cadbury to review their decision for taking good old Wispa off the shelves. UK must really like their chocolate. Their social media presence has enabled Cadbury to listen to what their customers wanted most and as a result they obliged.

By demonstrating  how Cadbury was able to calculate their ROI with social media, other businesses can evaluate the ROI of the use of Social media themselves and become one of many successful businesses to use social media.

Here's another random fact..


After winning a high court battle, Cadbury owns Pantone 2685C purple by trademark rules which prevents other companies from using that colour.

Thank you for reading, it has been a pleasure.



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2 Comments

  1. nyatesy |

    It seems Cadbury were able to add value using social media and produce a solid ROI. Were you able to find any weaknesses associated with Cadbury's strategy?

     
  2. Chris Vo |

    Hey Nathan, the calculation of the non-quantifiable benefits I was hoping for in Cadbury's case were limited. There were no mentions of how using social media had benefited Cadbury's use of social media from this fiasco.

    Conclusively, that was an assumption which I had to make up.

     

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