Friday, November 16, 2012

3.       Web 2.0 Solution Proposal

3.1       Description

            The online experience generated by the Web 2.0 phenomenon for consumers and Enterprise 2.0 for business takes advantage of several technologies that have emerged over the last decade most prominent of which is the increasing affordability of broadband internet telecommunications,  and the ease with which online media content can be generated by ordinary users.  This has effectively transformed cyberspace from merely a static browsing experience into a media-rich collaborative computing experience that truly empowers its users (Blue Coat, 2011; McAfee, 2010).
            The technologies behind the Web 2.0 trend covers social networking (Facebook, Google+, MySpace, etc. where interaction between friends, colleagues and acquaintances create a social dimension to the online experience), Wikis (collaborative engagement online allowing users to share and edit content), blogs (participative engagement that allows users to assess and appraise content presented by individuals or groups online for specific focused topics), and media content sharing such as YouTube where user can share multimedia content (Thomson, 2008) that has made YouTube a search engine second only to Google in terms of being the most frequently visited site for online search purposes (Stokes, 2012).  Other technologies include podcasting, news alerts, and social bookmarking but for purposes of this proposal, not all technologies are proposed as being suitable for a company that is just starting to create a social media presence. The business proposal recommends the following:
1.      Blogging is proposed as a complement to social networks and its website extend the interactive communication reach of social media, enabling companies to benefit from market feedback and insights that take the place of commissioned expensive market research works to improve their merchandise and services.  , and widen the brand awareness of the company and potentially convert online traffic into more sales revenues (KISSmetrics, 2012).  Blogs create a venue for real-world experiences on products and services that companies can capture freely and has grown to become a global pastime among online users with more than 110 million blogs as of 2008 and growing (Mayfield, 2008). 
2.      YouTube marketing using short videos about the company and its accomplishments, news and ongoing projects that can immensely improve the online search presence of the company.  YouTube is the 2nd largest search engine on the internet with an estimated 100 million videos viewed each day (Mayfield, 2008; Skwire & Teppema, 2012).  Half of YouTube’s 300 million worldwide users access the site at least once a week making  2.8 billion searches monthly (Stokes, 2012). Posting videos about Brisbane Airport and its role in the tourism and business travel industry as well as related news can take advantage of this reach as a more cost effective advertising model
3.      Enhance and fine-tune the company’s social networking presence by creating and developing a Google+ social networking presence to complement its Facebook account.  With the Google BlogSpot/Blogger presence incorporated into it, this social media presence is expected to promote and further widen the brand awareness of the services provided by the airport.   Over the last 10 months after its inception in June 2011, Google+ has shown phenomenal growth outpacing that of Facebook and twitter with 170 million  active users (Gonzales, Cuevas, Rejale & Cuevas, 2012),  and as of reaching its first birthday in July, Google announced the site has 250 million users (Olander, 2012). 
4.      Harness the revenue earning potential of social media marketing by taking advantage of the social behaviour of users.  For instance, every Facebook user brings with him an estimated 120 friends and colleagues on average (KISSmetrics, 2012).  This potential information cascading opportunity for a product or service endorsement has not escaped savvy marketers to generate a positive down line awareness that fosters the marketing potential of advertising in social networks (Leskovec, Adamic, and Huberman, 2006).  78% of consumers prefer the recommendations in social networks which gives social media a significant advantage over traditional advertising models (KISSmetrics, 2012), making social media the darling among advertisers and marketers.  In this regard, the BAC can harness this social behaviour to make product and service endorsements for its business concessionaires and airline operators in the airport premises.

            3.1.1    Identified Business Drivers

            The following factors have been identified as key drivers in further enhancing the BAC social media presence by harnessing popular and innovative Web 2.0 technologies for both its external and internal stakeholders (passengers or commuters, and employee / consignees). 
·         Harness the communicative powers of social media and its reach in creating and sustaining and wider awareness about the role of Brisbane Airport to its passengers, surrounding communities, the government and to the country’s tourism programs. The business concessionaires at the Brisbane Airport can benefit from have a shared access to a common communication platform with which they can access information that can benefit them, the airport and the passenger going through the terminal.  For instance, coordination can be made between airlines and airport managers to ensure flight times and passenger turnout are communicated through alerts on smartphones and laptops of concerned parties to ensure that enough manpower can man car rentals, food concessionaires and baggage handlers. In times of emergencies, coordination can be instant as information can be updated and immediately accessible to every stakeholder.
·         While the current social media presence is not meant to generate additional revenue streams directly, but more as a tool to improve communication between the company and its publics, there is the potential for social media to generate direct income through commissions in the sale of products and services that have a presence in the airport premises.

            3.1.2    Objectives

            The project aims to establish a more robust and active Web 2.0 computing environment for the Brisbane Airport Corporation with the following specific objectives:
Optimize marketing communications potential through a wider social media presence
Use of Google+ for a wider social networking presence that can be harnessed for marketing and PR purposes
User base to exceed 30,000 within the first 6-8 months from launch
Creation of blog sites to engage the public to actively share comments and suggestions on company products and services
At least 12 active blog feedback per day after the 4th month of implementation
Creation of a more intense YouTube marketing presence that can replace advertising spend on tradition print and broadcast media

·    Generate no less than 20,000 aggregate views for the corporate video materials posted in YouTube within the 6 months of launch; and
·    Reduce advertising placement spend on TV and print by 40 % within the same period.
Augment revenue stream through online sales commissions from airport concessionaires
Signed contract with business concessionaires to provide a 2%-5% commission on sales generated from local and international traffic to their websites directed from any social media site of Brisbane Airport
Incremental sales of $100,000 for the first year of operation with a conservative 15% increase every year thereafter.

3.2       Cash Flow Analysis

            3.2.1    Projected Benefits

            The proposed Web 2.0 enhancement to the business is expected to generate benefits that are qualitative and quantitative n natures with primary and secondary benefits in each as shown in Table
Table 3: Project benefits

Enhancing social media presence
Wider reach of information about the airport, local aviation news, its plans and project and other matters that concern the passengers going through the airport.
Fewer passenger inquiries at the airport on flight schedules, airport taxes, documentation requirements, etc. since these are now available online
Better market perception about the company, further boosting the goodwill of the airport name driven by its constant communication with its passengers and stakeholders,
Increased user base for social networking sites for the airport
Augment revenue stream through online sales commissions
Enhanced e-commerce value for the website and social media presence
Generate commission sales revenues of at least $100,000 with a 15% annual increase
Foster better business relationships with airport concessionaires
Retention of high value business concessionaires with no more at least 10% increase in their aggregate sales the airport’s social media referrals.


3.2.2    Anticipated Project Implementation Costs

·         No additional manpower is needed for the project or in the implementation itself; current staff handling the social medial activities will be involved in the project and additional internal users will be harnessed to ensure that market feedback from social media sites are responded do even outside of office hours.  To these end, several units of iPads will be provided to them as initial equipment that will enable them to engage in social media concerns even at home.
·         Technical specifications for PC Tablet (Apple iPad2) purchases will be valid within 6 months from submission of this proposal.  Hence immediate purchase is recommended as soon as possible considering the high obsolescence rate of these devices in the market, usually in 8-14 months.
·         Exchange rates and inflation rates will remain relatively stable throughout the project duration with no more than 5% fluctuation.
·         Purchase prices are valid within three months of this proposal.

            3.2.3    Cash Flow Analysis

            This proposal assumes an incremental increase of 15% of commissions revenues resulting from online purchases of items from visits directed or emanating from a visit to any of the Brisbane Airport social media sites.  The current base income is also assumed to be $100,000 which has been conservatively estimated.  In the absence of a company preferred a weighted average cost of capital (WACC), the cash flow analysis used the prevailing average of 7.05% for several markets as calculated by Damodaran (2012).
            From this assumption, a cash flow analysis on Table 5 clearly shows that the project will pay for itself in less than for years based on a discounted payback period computation. It has positive NPV and its IRR exceeds the current cost of capital (7.05% rounded out in the table presentation), both indicative of project that has acceptable business value for the company.  The revenue assumption will have to be validated after the first year, but this quantitative assessment can be insignificant compared with the qualitative value of achieving a wider communication reach among the company’s stakeholders that the proposed Web 2.0 technologies promise.

4.1       Statement of Work

            Over a period of 12 months, the project team will implement the various web-based technologies to enable the company to harness the Web 2.0 or Enterprise 2.0 computing platform and create the application web experience for its customers. The Web 2.0 umbrella project covers the following:
(1)   Blogging:  Using Google’s BlogSpot/Blogger, create blog sites to provide closer interaction between customers and the company.
(2)   Improve Facebook presence: Fine-tune the corporate Facebook presence to present the company products and services, news and industry developments, as well as customer feedbacks to create a positive impression that the company values its markets.
(3)   Create Google+ social networking presence that incorporates its blogosphere presence for optimum market reach and ability to extract passenger feedback and reaction to airport services provided by the company
(4)   Implement YouTube Marketing.  Develop short 10-30 second advertising and advertorial content about the company products and services, history and programs, people profiles, and other relevant materials that can be used to promote the company name and thus create branding preference.


4.2       Key Project Assumptions and Constraints

The project will have the following assumptions and constraints or limitations:
  • The project team members are stakeholders in the organization and will be directly involved in operating and using the proposed Web 2.0 computing technologies as proposed for at least 3 years from the successful implementation of the project
  • The system vendor (s) in the supply chain for the project will cease to operate during the system implementation.
  • The implementation will result in the decommissioning of the various existing computing systems that are replaced throughout the company’s operations.
  • Project funding may be increased within 20% as approved by the project sponsor
  • The project has a 12-month timeframe, ending on or before 10 December 2013.
  • The project deliverable will comply with approved policies of the company where applicable unless otherwise rescinded for purposes of accommodating any new procedural requirement as may arise from its implementation.

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