Calculating the Twitter Return on Investment for business use (research 2010)
Over the past year Twitter has become more than a ‘hype’. Last week I was reading the ‘Digital’ section my online newspaper and noticed that 5 out of 20 news-items where about the use of Twitter. There seems to have formed a general consensus that Twitter is not only ‘the place to be’, but also promises mythical business opportunities. Everyone is talking about Twitter, everyone seems to be using it so there must be some business sense behind it…?
So it was time for me to have a thorough research (in 2010) about the Real business value of Twitter and to calculate a Return on Investment (ROI) business case.
I decided to ‘go the extra mile’ and therefore I created some 20 different Twitter-accounts testing out multiple techniques, changing these over time using the different accounts in order to get some ‘quantity’ and ‘quality’ in useful data about use, users and conversion ratio’s.
The research has led to some surprising insights, some of them I will share with you online. Others (the better tricks) I will reserve for my paying customers.
First an overview of the 4 assumptions that I have analyzed:
Over the past year Twitter has become more than a ‘hype’. Last week I was reading the ‘Digital’ section my online newspaper and noticed that 5 out of 20 news-items where about the use of Twitter. There seems to have formed a general consensus that Twitter is not only ‘the place to be’, but also promises mythical business opportunities. Everyone is talking about Twitter, everyone seems to be using it so there must be some business sense behind it…?
So it was time for me to have a thorough research (in 2010) about the Real business value of Twitter and to calculate a Return on Investment (ROI) business case.
I decided to ‘go the extra mile’ and therefore I created some 20 different Twitter-accounts testing out multiple techniques, changing these over time using the different accounts in order to get some ‘quantity’ and ‘quality’ in useful data about use, users and conversion ratio’s.
The research has led to some surprising insights, some of them I will share with you online. Others (the better tricks) I will reserve for my paying customers.
First an overview of the 4 assumptions that I have analyzed:
- ‘Twitter is all about quality. If you add quality Tweets to your account, you get a targeted, quality network’
- ‘Twitter for marketing use is very interesting, it generates a great amount of new customers back to your website in a viral way’
- ‘Twitter as a channel to communicate with your customers is very fast and adds an added value to your customers’
- ‘Twitter’ is very easy to use as an extra channel to get more visibility for the content on your websites just using RSS feeds’
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How I measured
During my research I also used a number of plugin Services for Twitter. These Services add a specific value for Twitter users such as the generation of automated messages. I tried out a great number of these plugins. Some plugins e.g. offered a ‘dashboard’ on which you can see the number of views to your account or information about the number of clicks back to the content you Tweeted about or to your website in general. Most of these produced rather questionable to very dubious results. Sadly these results are too often the benchmark in which Twitter services and advice is given to companies. It formed the ‘bulk’ of reports from so-called Twitter experts that I have read online. Thus, I wanted to measure only real conversion and therefore I used a combination of both Google Analytics and W3Counter to get some real data. Assumption 1: ‘Twitter is all about quality. If you add quality Tweets to your account, you get a targeted, quality network’ The first thing you will notice is that Twitter has one feature that attracts everyone’s attention and which has been the growth engine behind other social networks like e.g. LinkedIn: number of ‘friends’. These are not called ‘friends’ here, instead they are ‘followers’ which is more correct because people on Twitter gather around the content you are sharing rather than a personal connection. Like on LinkedIn this triggers a lot of ‘status’ oriented actions on the network. Users feel compelled to get more ‘followers’. Having more followers means ‘being more interesting’. The ‘reward’ of getting more ‘followers’ in itself is not a very quality oriented aspect, it leads to all sorts of spamming activities from users in order to get more and more followers and the competition in this is addictive in the same way as LinkedIn has proved to be addictive for many users. I have written about this aspect earlier and will not get into this aspect, instead I want to focus on the business ROI. Quantity doesn’t have to be a ‘bad’ thing, if that is the way to more followers and they really to generate more traffic to your website, it can be a very genuine online strategy indeed! So therefore I added just a few messages per day on some Twitter handles and these tweets could be considered very high quality / targeted messages. In addition, I used Twitter networks that just added a great number of automated RSS feed messages to Twitter handles. Finally, I changed the quality of those messages as well resulting e.g. in a channel that had lots of low quality messages (just containing hyperlinks or re-tweeted messages) and channels with heavy number / bulk top quality messages. My expectations I expected that the good quality messages would result in far better ‘performance’ in added ‘followers’ and a higher quality of those ‘followers’. I also expected that the non-quality messages would only result in fewer followers and in followers of a lower quality (e.g. more automated ‘bots’ and ‘spammers’). Also I expected that the ‘quality channels’ would result in higher click-back / conversion ratio’s to my website. Results I was very much surprised by the results. They were much more unimpressive than I thought. Simply put, any kind of heavy quantity Tweeting resulted in faster growing Twitter networks, the main incentive of the network. No matter if it was a bulk of high quality messages or very low quality messages (I even used a bulk feed with links that didn’t work). In a matter of days, the quantity oriented networks added about 5000 ‘followers’. The low quantity networks on which I added just a few high quality Tweets added just a few ‘followers’. There also wasn’t any difference in the quality of the followers. Across the board, there was about an equal amount of spammers / bots to ‘real-people ratio. No measurable differences. The ‘click-back’- and ‘conversion ratios’ were very low indeed (on average just 0,04%), independent of the usage of ‘quality’ or ‘bulk’ networks. Interestingly, my (plugin-tool) dashboards showed me an abundance of click-backs and high conversion of thousands of people visiting my websites. W3Counter and Google Analytics however showed hardly any conversion at all (!!) which raises some questions about the use of these free plugin tools. Assumption 2: ‘Twitter for marketing use is very rewarding, it generates a great amount of new customers back to your website in a viral way’. Twitter can result to real business ROI. There are a good number of examples such as the famous Dell Outlet on Twitter. The just auto-added their products to a Twitter channel with an RSS feed which lead you back to special deals on their website. This solution hardly costs any ‘time’ to invest. You just have to check your account from time to time to see if anyone is is sending you a message instead of using the links back to your store. Here obviously the ROI business case is easy to make: extra costs: about 30 minutes per day of 1 fte + the use of a specialized plugin (in this case CoTweet), rewards: and extra channel driving more sales to your website. However such success stories are not common in real life. If you are just a small business owner you will struggle to find your ROI. Minimizing 'spend Time seems to be the answer. Therefor, to succeed you need:
Indeed, Twitter is very fast, yet not very obvious for a lot of users how to best use it. Can you expect your customers to just use Twitter as a main communication channel? No, certainly not, you will always need to have your ‘normal channels’ (phone, email etc) as well. So it is an ‘extra’ also for your service channel, the people servicing your customers with extra costs involved. It adds value if you didn’t have a mobile website / channel service yet because Twitter can be used on almost all modern mobile phones. So be sure to calculate the costs involved for training your service channel and changing administering tools to cope with the use of the Twitter channel. Assumption 4: Twitter’ is very easy to use as an extra channel to get more visibility for the content on your websites just using RSS feeds’ No question about it that you can create a new channel for almost no costs. If you add your products or services by just adding aN RSS feed everything will be done for you automatically. Just don’t expect too much from it. That might change however when Bing and Google will start indexing the Twitter Tweets. I have discovered a number of ‘tricks’ for business use to create ROI. Summary Twitter thus is all about ‘status’ and ‘quantity’ from a business point of view. In general (with some exception which I will address underneath), it usually will not result in business ROI or Value. Minimizing 'spend Time seems to be the answer. Therefor, to succeed you need:
Also, one could use social media analytics tools to scrape real time data, filter it and republish or re-use the filtered content in order to create a higher quality data stream. Also this strategy could result in creating dynamic personal profiles for topics of interest. One final thing I wanted to be clear about; People name Twitter as a Social network. I do not concur. The profiling options are too limited in my opinion but we can all disagree on the semantics. Should you call it a social network, then judging from the data and numbers, Twitter can be added to the ON Models. |
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