How data skills help firms create social media that matters

THERE’S hardly a company in the world today that doesn’t have a social media presence, whether it’s a Facebook account, a Twitter feed or a Web site with an interactive blog. But mere existence in the social media space doesn’t guarantee a boost in customers, sales or brand recognition for a business, says Lynn Wu, a Wharton professor of operations, information and decisions who specializes in the study of information technology and its relationship to productivity.

In her latest paper, “Data Analytics Skills and the Corporate Value of Social Media,” Ms. Wu analyzed a large sample of businesses to determine how they derived value from social media. The research was co-authored with Wharton operations, information and decisions professor Lorin Hitt and Fujie Jin, a former Wharton Ph.D. student who is now a professor at Indiana University’s Kelley School of Business. The results indicate that firms reap the most benefit when they can analyze and interpret data across all departments and operations, not just marketing. Ms. Wu recently shared details of the study with Knowledge@Wharton.

An edited transcript of the conversation follows. Knowledge@Wharton: Could you give us a brief summary of the research? What were you trying to study?

Lynn Wu: The research is really to understand how firms derive value when they start using social media. That’s an important question because, according to a recent CMO survey, only 15% of executives can quantitatively see the impact of social media on their bottom lines. That means 85% of them cannot [see the quantitative impact]. Forty-five percent [of survey respondents did] not have any clue, both quantitatively or qualitatively, what value social media is to their business. That’s even a bigger problem as social media spending is projected to double within the next three to five years. Understanding how firms derive value from social media is becoming a really important question.

Knowledge@Wharton: How did you examine this question, and what did you find?

Wu: We collected the largest possible sample because previous social media studies often target marketing-related activities or firms. So, here we just look at all of the firms, whoever had a social media presence; in this case, a Facebook company page.

AN Australian start-up is getting some traction with a proposition for mobile phone users: Watch our ads, and we’ll cut your wireless bill.

Called Unlockd, the company has reached half a million customers through deals this year with two carriers to offer users a discount on their rates if they agree to view ads when they unlock their handset screen. In the US, Boost Mobile, a brand of Sprint Corp., gives customers with Android phones a $5 credit on prepaid plans that cost from $ 30 to $ 60 a month.

Unlockd also operates in the UK through a deal with Tesco Mobile, and plans to expand into five more countries by October, and an additional eight before yearend. It’s raised more than $20 million from investors including two heavyweights: Sol Trujillo, former chief executive officer of Melbourne-based phone company Telstra Corp., and Lachlan Murdoch, co-chairman of 21st Century Fox, Inc. It’s seeking to raise as much as $40 million more this year, said Matt Berriman, the start-up’s CEO.

“Consumers have been looking for ways to get what they want, sellers have been looking for ways to reach consumers, all enabled by wireless and bandwidth,” Mr. Trujillo said in an interview. “The carriers have been looking for new revenue streams. There’s a great triangle here where they can generate new revenue off of services their customers chose to take or not.”

HEATED MARKET

Unlockd joins a growing list of companies — including Facebook, Inc., Amazon.com, Inc. and Pandora Media, Inc. — that are targeting the mobile-advertising market, which is expected to more than double to $65.5 billion by 2019, according to researcher eMarketer. The moves come after years of attempts by start-ups and companies like Virgin Mobile to offer ad-subsidized wireless service, many of which were aborted. Proponents say those companies were ahead of their time, and that consumers are now more receptive to viewing ads on their phones.

Unlockd is working with more than 300 advertisers globally, including Starbucks Corp., McDonald’s Corp., Viacom, Inc.’s MTV, Lyft, Inc. and News Corp., he said.

“Like any good mobile product, it’s more about timing, and I think the timing is very good,” said Doug Robinson, CEO of Fresh Digital Group. His agency’s clients include Macy’s, Inc., Walt Disney Co.’s ESPN and Ford Motor Co. Earlier this year it used Unlockd to run a public-service campaign for the Partnership for Drug-Free Kids.

“To pinpoint this audience on TV or radio is nearly impossible,” Mr. Robinson said. “We know exactly who we are reaching.”

In the US, Unlockd users tend to be younger and Hispanic, while in the UK, the program reaches people 25 to 54 years old, Mr. Berriman said. Unlockd isn’t available on Apple, Inc.’s iPhones.

FRONT DOOR

When consumers sign up for the service, they get ads, content and promotional offers whenever they swipe the screen to unlock their handset, and those ads are tailored to their location. A Boost customer would typically use the Boost Dealz app to see 25 to 30 pieces of content or ads a day in return for the lower bill, Mr. Berriman said. An ad can be dismissed almost instantaneously.

“People used to deliver newspapers onto the front doors of people’s homes, because it was the first place in the morning people would go,” Mr. Berriman said. “What we are seeing now is people don’t go to the door now first thing in the morning. They roll over and look on their phone.”

Unlockd licenses its platform to telecom companies and shares the advertising revenue with them. Mr. Berriman declined to discuss particulars of its deals.

A decade ago, Virgin tried offering users free minutes for watching ads; the Sugar Mama program was shuttered in 2009 amid the financial crisis. The Finnish company Blyk tried its own ad- supported wireless service in the UK but had to change its business model around the same time. The common wisdom came to be that ad- subsidized wireless just doesn’t work.

Other companies challenging that notion today include RingPlus, Inc., which launched its ad- supported service last year. It offers free and discounted plans, but asks users to listen to a commercial

before an outgoing call is connected. Chicago-based CellNuvo lets users earn minutes and texts by answering surveys and receiving ads.

LOCK SCREENS

The fact that Unlockd acts as a carrier’s partner instead of a competitor could help it succeed, according to analysts.

“This can work provided the discount levels are right, the ad experiences are good,” said Paul Verna, a senior analyst at researcher eMarketer. “This is basically putting money back into consumers’ hands without asking for a lot in return.”

The unlocked and locked screens are a relatively new target for mobile ads. In July, Amazon began offering Prime members $50 off the price of phones from brands Blu and Motorola in return for viewing ads on their locked screens. Start- up Mobile Posse serves content to a user’s home and lock screens.

Mr. Berriman, a former professional cricket player, started Unlockd 18 months ago after seeing a demo of a piece of content that popped up when a user unlocked a phone. He tested the service with Lebara Mobile in Australia for six months last year, before launching the service commercially with Boost in January.

“I thought there was a model there,” he said. —