Digital Media Term Paper

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¶ … Digital Media Budget

Expanded Digital Media Budget for Zap Cars

The second phase of the Zap Cars Digital Media (DM) Budget is to analyze in depth three of the most promising strategies proposed. These include the development of the Zapped! Website and free music downloads on the ZapMe! Label, budgeted at $1.5M; the development of pre-emptive Web Marketing campaigns which include a heavy reliance on analytics for $750K; and the launch of a globally-based rich media advertising campaign on Google, MSN and Yahoo, budgeted to cost $750K. Taken together these three initiatives define 60% of the total $5M budget, or $3M. A key consideration in going forward with each of these specific strategies is the potential each has to quantify their relative contributions to Zap Cars' awareness levels, both from an unaided and aided standpoint. The target audience for the Zap Car is emerging as consumers who are in their 20s and 30s, college educated, and primarily male. Each of the three strategies being refined in this paper have the potential of also being quantified in terms of their contribution to increasing awareness in addition to moving potential customers through a sales funnel. These three strategies are now analyzed from a financial perspective below.

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Term Paper on Digital Media Assignment

Budgeting $1.5M for this specific online initiative that includes the development of an entirely new website, the creation of a download sites and services, and the research and development necessary to create an entirely MPs-based record label called ZapMe! needs to include budgeting for the necessary hardware, software, and services to get the three initiatives online first, and second, supported over time. The costs associated with attracting talents and promoting the specific musical acts for the ZapMe! label is not included in this analysis. Those promotional, public and media relations costs are part of the overall operating budget for Marketing Communications. The costs concentrated on here are by definition direct costs that apply directly to the development of the website, music download service, and ZapMe! label. Table 1, Zap Cars Digital Media Budget specifically covers the costs and anticipated benefits of investing in a website, music downloads service and in the ZapMe! label, which be comprised entirely of MP3 downloadable songs for iPods and MP3 players.

Table 1: Zap Cars Digital Media Budget

Web Site, Download Center and ZapMe! MP3 Label

Gray cells contain calculations that should not be altered.

Company Data

Required rate of return

Tax rate

Fiscal Quarters

Initial Investment in Web Site

Hardware (e.g., servers)

Software (e.g., e-commerce catalog software)

Development (e.g., third-party site design and development)

Total Initial Investments

Benefits from Web Site

Direct sales of music

Incremental car sales resulting from enhanced promotional/salesperson effectiveness

Incremental car sales resulting from increased partner participation

Reduced travel costs

Reduced customer service costs

Reduced printing and shipping costs

Lead Generation of potential ZAP Customers

Lead Escalation and Lower Funnel Qualification of ZAP Customers

Cost Savings from generating quotes electronically from the website

Sale of a Zap vehicle based on Web Quotes turning to a Sale

Total Benefits

Costs (Excluding Initial Capital Investments)

Website Content Development

Search Engine Optimization for ZAP KeyWords

Project management on Web Site, download area and ZapMe! records microsite

Downloads File Sharing MicroSite Development

Depreciation on capital expenditures (calculation uses three-year period)

Hosting, domain-name registration

General and administrative (e.g., rent, insurance, exec. salaries)

ZapMe! Label MicroSite

ZapMe! Label Billing System

ZapMe! Label Partnership and Website Artist Alliance

Total Costs

Net Benefits (Costs)


Value after tax

Depreciation added back

Cash flow

Cumulative cash flow

Evaluation Metrics

Net present value (NPV)

Internal rate of return (IRR)

Payback period (in years)

The total outlay assuming this budget is $1,030,450, which is the initial investment in the website of $270,000 and the costs excluding capital equipment of $760,450. This leaves $469,550 for promotional and marketing costs related to launch all three initiatives.

Creating the website, defining and creating a music downloads area, and creating the ZapMe! label can all be hosted on the hardware, software, and services as defined. There isn't a need to specifically create separate hardware platforms for each initiative; all three can be hosted on the same server. The assets as defined as the hardware, software and services will need to be depreciated over a three-year period, hence the entry in the table under Costs. Of the three initiatives, the ZapMe! Label will take largest initial investment of $125,000 which is comprised of the microsite for $50,000, the billing system for $25,000 and the Label Partnership and Website Artist Alliance for $50,000. The latter two areas, the billing system and Label Partnership and Website Artist Alliance, rely on a hosted application platform that requires a monthly fee to operate. The ZapMe! label microsite is also on a hosted platform, yet the costs decrease over time based on the initial development of the site being completed in the first quarter, and the costs primarily being made up of hosting and maintenance fees for this specific site.

The benefits from the website, downloads service and ZapMe! music label are expected to begin accruing in the first quarter of operations. This is due to the use of these three initiatives to accomplish direct sales of music which will become an integral part of the branding strategy, development of lead generation and escalation for upper and lower funnel sales strategies, reduction in travel costs as part of the website will be used for training dealers, and a reduction in printing costs will be accomplished by having brochures and literature available online.

The largest gains from pursuing these three strategies in conjunction with one another is the incremental gain in car sales both directly as a result of lead generation and escalation being handled all electronically both for Zap Cars and for the dealers. The incremental sales based on the entire selling process, from lead generation to closed sales, being managed online, are going to be a significant cost savings. Incremental car sales based just on the enhanced promotional and salesperson effectiveness strategies will net out $420,000 in revenue in the first three quarters of launch and an incremental $285,000 will be generated based on having the lead escalation process completely automated online.

In summary, based on the anticipated revenues generated from this strategy the Net Present Value of the $1,030,450 invested is $211,866, generating an Internal Rate of return (IRR) of 40.9% with a Payback Period of 1.8 years. The cumulative cash flow from this project turns positive in the Second Quarter, edging up to $36,126 and then accelerating to $289,809 as the start-up costs are covered in the First Quarter, and then gradually decrease over the Second and Third quarters. Please see the Appendix for the Excel spreadsheet used in the analysis.

Pre-emptive Web Marketing including SEO and Analytics

The intent of this initiative is to analyze click stream data and ascertain what websites visitors to the Zap Cars site have been to prior to their visits to the company's site. This includes the ability to read cookies and develop personalized content on the Zap Cars site that aligns with their interests, as indicated by the content of cookies contained in visitors' browsers. As a second part of this strategy the development of Search Engine Optimization (SEO) routines and developments to make sure the Zap Cars name and keywords selected for optimization on place the company's website high in organic searches in all major search engines. Organic searches are specifically those that are found in the main search results of each search engine; they are not the advertisements that appear on the right side of the screen for example in Google, or along the bottom of the Yahoo searches. The third aspect of this strategy is defining an analytics strategy to track the performance of these two initiatives over time.

The $750,000 budgeted for this specific initiative is going to be spent on personalization of the website, search engine optimization strategies and analytics. The costs incurring in the first project of setting up the website to begin with also include the integration of the personalization and search engine optimization structure to support the inclusion of keywords on each page of the website. This technique of embedding keywords in each page of the website is the basis used for ensuring all search engines can find the pages and index them so that when someone searches on a term, it is found and presented in the organic search results delivered.

The significant costs of search engine optimization are in the continual refinement of keyword strategies and the placement of keywords both within the HTML headers of pages but also in the actual content on the pages themselves. As this can become quite a complex process, many companies create an ongoing project to get these efforts initially up and running, and then refined over time. The following are the steps of the Search Engine Optimization (SEO) process, shown in Table 2, Costs by Phase of the… [END OF PREVIEW] . . . READ MORE

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How to Cite "Digital Media" Term Paper in a Bibliography:

APA Style

Digital Media.  (2007, April 21).  Retrieved January 25, 2021, from

MLA Format

"Digital Media."  21 April 2007.  Web.  25 January 2021. <>.

Chicago Style

"Digital Media."  April 21, 2007.  Accessed January 25, 2021.