Calculating the Twitter Return on Investment for business use
Over the past year Twitter has become more than a ‘hype’. Last week I was reading the ‘Digital’ section of 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 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, such as models on how to generate real business ROI and Leads) I will reserve for my paying customers.
First an overview of the 4 assumptions that I have tested:
1) ‘Twitter is all about quality. If you add quality Tweets to your account, you get a targeted, quality network’
2) ‘Twitter for marketing use is very interesting, it generates a great amount of new customers back to your website in a viral way’
3) ‘Twitter as a channel to communicate with your customers is very fast and adds an added value to your customers’
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’. It will add new Leads.
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. Mind you, quantity doesn’t have to be a ‘bad’ thing. If having more followers equals more traffic to your website, it can be a very genuine online strategy indeed!
So I decided to test this as well and therefore I used some Twitter accounts just publishing a few, but very high quality / targeted, messages per day. Also, I used a few Twitter accounts to publish a great number of automated RSS feed messages for comparison.
Finally, I experimented by changing the quality of those messages as well resulting e.g. in a channel that had lots and lots of unreadable 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 expected. 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, also not discriminating between ‘quality’ and ‘bulk’ networks. The plugin 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 dashboards of these free plugin tools.
Assumption 2: ‘Twitter for marketing use is very interesting, it generates a great amount of new customers back to your website in a viral way’
Twitter Can result in real business ROI. There are a good number of examples of successes such as the famous 'Dell Outlet' on Twitter. Dell just publishes their discount products news to a Twitter channel with an RSS feed which in it's turn will lead you back to 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 on Twitter. If you are just a small business owner you will struggle to find your ROI. To succeed you need:
- an RSS feed with at least 3,4 new Tweets per hour (to reach and maintain sufficient volume)
- a stable working RSS 2 Twitter plugin tool
- measure your conversion using your own webanalytics tools
- someone to login every day to monitor messages on Twitter
Assumption 3: ‘Twitter as a channel to communicate with your customers is very fast and adds an added value to your customers’
Indeed, Twitter is very fast and you can use it on your mobile phone.Yet it is 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’ investment, also for your service channel. The people servicing your customers will have to be educated how to use it, with extra costs involved.
Ask yourself; 'how successfull is Twitter really?' Be informed that most people who have tried Twitter stop participating after a few weeks. Only a very small percentage of users (less than 4%) will remain active and you will find that they tend to be overly expressive in their communication style adding a lot of risks to your corporate brand (negative exposure) should you consider to openly communicate with these people online..
Most companies think that if they have a presence on Twitter, they can influence what is being said about their Brand (webcare). They tend to forget that they have no good insight of the impact of these discussions and thus are spending too much resources managing 'the few' in a way that doesn't allow very quality indepth interactions (limited to 140 characters).
As a communication channel Twitter is just as time consuming for your company as any Chat-like online service, they require much more invested time of your service channel than traditional media such as the phone. Also, a focus on Tweets about your brand will lead to detachment of your main consumer market. It will only focus on the few who have adopted twitter as their chosen way to communicate, whereas most people think it is a rather complex or unprofessional way to communicate.
Sure it can be a good way to express and share your messages to a general public if you have a strong personal brand, being someone famous or if you have a strong corporate brand such as Nike, or Dell, but don't misjudge the real sexyness of your brand to your followers. 'Are they really following you or do they just want to be followed back?' Mutual following is necessary to send a Direct Message. Doing so, you will notice that you will get a lot of spamm from these followers, costing you more time and more resources..
Finally, and very important, the general public don't understand what is happening, how Tweets work. Most people seem to think that they are getting 'messages' on Twitter. They don't understand the concept that they are following Twitter accounts and thus see the published messages on those accounts on their home screens when they are logged-in. They are mistaking Tweets for personal e-mail-like communication.
So if you decide on having a twitter channel with a 'breaking news RSS feed publishing lots of new items per hour, chances are high that a lot of your 'followers' will think that you are sending them lots of spam prompting angry responses (however obsurd) from them as well.
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 broadcasting channel for almost no costs for marketing purposes. 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.
However,changed when Bing and Google started indexing the Twitter Tweets. I have discovered a number of ‘tricks’ for business use to create ROI, generating Leads. Obviously you will need a lot of quantity in content, automated streaming and a proper backlinking strategy to relevant content. For more information, contact me at www.onlinenetworking.biz
Summary
Twitter from a business perspective is thus is all about 'broadcasting' to your own billboard adding ‘status’ and ‘quantity’. In general (with some exception which I will address underneath), it will not result in business ROI or Value.
To succeed you need:
- an RSS feed with at least 3,4 new Tweets per hour (to reach and maintain sufficient volume)
- a stable working RSS2Twitter plugin tool
- measure your conversion using your own webanalytics tools
- someone to login every day to monitor messages on Twitter
One final thing I wanted to point out; People regard Twitter a 'Social Network'. I don't agree. In my opinion 'profiling' options are too limited to base quality interactions on. But we can all agree to 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 Model as follows:
For more information, contact me at www.onlinenetworking.biz
So it was time for me to have a thorough research 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, such as models on how to generate real business ROI and Leads) I will reserve for my paying customers.
First an overview of the 4 assumptions that I have tested:
1) ‘Twitter is all about quality. If you add quality Tweets to your account, you get a targeted, quality network’
2) ‘Twitter for marketing use is very interesting, it generates a great amount of new customers back to your website in a viral way’
3) ‘Twitter as a channel to communicate with your customers is very fast and adds an added value to your customers’
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’. It will add new Leads.
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. Mind you, quantity doesn’t have to be a ‘bad’ thing. If having more followers equals more traffic to your website, it can be a very genuine online strategy indeed!
So I decided to test this as well and therefore I used some Twitter accounts just publishing a few, but very high quality / targeted, messages per day. Also, I used a few Twitter accounts to publish a great number of automated RSS feed messages for comparison.
Finally, I experimented by changing the quality of those messages as well resulting e.g. in a channel that had lots and lots of unreadable 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 expected. 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, also not discriminating between ‘quality’ and ‘bulk’ networks. The plugin 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 dashboards of these free plugin tools.
Assumption 2: ‘Twitter for marketing use is very interesting, it generates a great amount of new customers back to your website in a viral way’
Twitter Can result in real business ROI. There are a good number of examples of successes such as the famous 'Dell Outlet' on Twitter. Dell just publishes their discount products news to a Twitter channel with an RSS feed which in it's turn will lead you back to 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 on Twitter. If you are just a small business owner you will struggle to find your ROI. To succeed you need:
- an RSS feed with at least 3,4 new Tweets per hour (to reach and maintain sufficient volume)
- a stable working RSS 2 Twitter plugin tool
- measure your conversion using your own webanalytics tools
- someone to login every day to monitor messages on Twitter
Assumption 3: ‘Twitter as a channel to communicate with your customers is very fast and adds an added value to your customers’
Indeed, Twitter is very fast and you can use it on your mobile phone.Yet it is 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’ investment, also for your service channel. The people servicing your customers will have to be educated how to use it, with extra costs involved.
Ask yourself; 'how successfull is Twitter really?' Be informed that most people who have tried Twitter stop participating after a few weeks. Only a very small percentage of users (less than 4%) will remain active and you will find that they tend to be overly expressive in their communication style adding a lot of risks to your corporate brand (negative exposure) should you consider to openly communicate with these people online..
Most companies think that if they have a presence on Twitter, they can influence what is being said about their Brand (webcare). They tend to forget that they have no good insight of the impact of these discussions and thus are spending too much resources managing 'the few' in a way that doesn't allow very quality indepth interactions (limited to 140 characters).
As a communication channel Twitter is just as time consuming for your company as any Chat-like online service, they require much more invested time of your service channel than traditional media such as the phone. Also, a focus on Tweets about your brand will lead to detachment of your main consumer market. It will only focus on the few who have adopted twitter as their chosen way to communicate, whereas most people think it is a rather complex or unprofessional way to communicate.
Sure it can be a good way to express and share your messages to a general public if you have a strong personal brand, being someone famous or if you have a strong corporate brand such as Nike, or Dell, but don't misjudge the real sexyness of your brand to your followers. 'Are they really following you or do they just want to be followed back?' Mutual following is necessary to send a Direct Message. Doing so, you will notice that you will get a lot of spamm from these followers, costing you more time and more resources..
Finally, and very important, the general public don't understand what is happening, how Tweets work. Most people seem to think that they are getting 'messages' on Twitter. They don't understand the concept that they are following Twitter accounts and thus see the published messages on those accounts on their home screens when they are logged-in. They are mistaking Tweets for personal e-mail-like communication.
So if you decide on having a twitter channel with a 'breaking news RSS feed publishing lots of new items per hour, chances are high that a lot of your 'followers' will think that you are sending them lots of spam prompting angry responses (however obsurd) from them as well.
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 broadcasting channel for almost no costs for marketing purposes. 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.
However,changed when Bing and Google started indexing the Twitter Tweets. I have discovered a number of ‘tricks’ for business use to create ROI, generating Leads. Obviously you will need a lot of quantity in content, automated streaming and a proper backlinking strategy to relevant content. For more information, contact me at www.onlinenetworking.biz
Summary
Twitter from a business perspective is thus is all about 'broadcasting' to your own billboard adding ‘status’ and ‘quantity’. In general (with some exception which I will address underneath), it will not result in business ROI or Value.
To succeed you need:
- an RSS feed with at least 3,4 new Tweets per hour (to reach and maintain sufficient volume)
- a stable working RSS2Twitter plugin tool
- measure your conversion using your own webanalytics tools
- someone to login every day to monitor messages on Twitter
One final thing I wanted to point out; People regard Twitter a 'Social Network'. I don't agree. In my opinion 'profiling' options are too limited to base quality interactions on. But we can all agree to 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 Model as follows:
Tags: Investment, ROI, Return, Twitter, business, calculation, on, review, tips, tricks
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