Your Twitter Followers – What are they worth and what they cost you
An email from Twitter sales to prospective advertisers in December revealed what companies have been paying for followers on the platform. The memo included cost-per-follower (CPF) rates for Promoted Accounts and cost-per-engagement (CPE) for Promoted Tweets.
The CPF runs between $2.50 and $4, while the listed CPE rates come in from $0.75 to $2.50. For CPE, "engagement" refers to clicks, favorites, retweets and "@Replies." Twitter advertisers must commit to 3 months at a minimum spend of $15,000.
The second indicator which appears to give Twitter followers a value concerned a new lawsuit that put a price on Twitter followers. PhoneDog, an obscure phone review website is suing former employee Noah Kravitz for $340,000 over a "stolen" Twitter account. During his employment Kravitz had set up the account – @Phonedog_Noah. On leaving the company, Kravitz insists, PhoneDog were happy for him to keep the (now renamed) account, on the understanding that he would occasionally tweet out links to their phone reviews. At some point, though the relationship got messy. Now PhoneDog wants its followers back, and it also wants a third of a million dollars in damages: $2.50 for every one of the account's 17,000 followers, multiplied by the number of months since Kravitz left his job.
There are several key issues here including ownership and what can happen if an employee leaves a company taking 'his' Twitter account with him but I was more interested in what cost can be placed on Twitter users? How much value social media actually adds is difficult to quantify: how can a company say for sure that X number of Twitter followers has led to X increase in profits or uptake of services? The amount accepted by the court could set a precedent for future cases. I thought this was timely example of something that we should all consider if we use, or intend to use, Twitter for business.
Of course, it will also depend on whether Twitter is used primarily as a branding tool rather than a straight-up profit-increasing tool by the business. There are also many other variables that will influence the value of your followers, not least the ‘quality’ of the follower and their willingness to engage with the company but, for the purposes of this article, we need to ignore these variable factors at this stage.
In my experience, there are 3 ways that your number of Twitter followers can influence consumer behaviour on the internet and should give some indicator as to their value to any particular business and help you with a little audit based on what you are not spending;
- Traffic to website
According to Google, a hotel in the Cotswolds would need to pay around £1.78 to get someone to click on their link using Pay Per Click. In my experience, it would be a lot cheaper to achieve the same result using Twitter. Google analytics and other tools will show you which channels are the most cost effective referrers in terms of traffic to your website. A Twitter follower will usually visit your website at the point of deciding whether or not to follow you and will then also keep returning to your website and specific pages provided your content/tweets are effective in generating this response. Even if every follower visits your website just 3 times a year, you will be paying significantly less than you would through PPC or Google Adwords. I have clients who have seen Twitter become the top referrer to their website within just two weeks of starting a Twitter campaign.
- Twitter Mentions
Google confirmed in 2011 that they do indeed count links from Twitter as a factor in search ranking. Get your page mentioned in tweets by authoritative people, and that can help your ranking in regular search results, to a degree. These are important ‘social signals’ for the search engines. However, not all links from Twitter have equal value as that would be spammer heaven but they do operate on the basis of a Twitter Rank. Armed with this ”Twitter Rank”, Google can assign a value to links from tweets. Of course, we can only speculate as to what criteria they apply in these rankings but what is important here is that Twitter mentions and retweets do count and the more conversation that you can generate, the better off you are going to be. It is however difficult to put a number on this without knowing all the details suffice to say that is a factor.
- Direct business generation
In the good old days, small businesses and hotels would be printing brochures, advertising in magazines, sending email newsletters/ mailshots and spending money on PR agencies and the like with the sole purpose of driving business and communicating with their customer base. They would also be spending a significant amount of money by selling through third party suppliers in the form of commission. Using a Twitter follower database effectively means that this particular marketing channel can, in some cases, replace the ‘old marketing’ and provide businesses with significant savings. This is a further factor you need to take into account when it comes to calculating the value of your followers. Of course, none of this matters a single iota if you have nothing of value to sell to your internet savvy followers.
Now that you have some idea of what these followers are worth to you and your business, you should probably look at how much they've cost your business to bring them on board. If you don’t outsource Twitter, you will need to work out how much of your or your staff’s time has been spent on Twitter and give to a value based on your cost per hour. Divide this by your number of followers and see what your cost per follower is. Similarly, you can apply the same calculation if you outsource this particular function.
I believe that if you are paying directly, or indirectly, anything more than 70p per quality follower, then you are not being effective with your particular strategy. For my hotel clients, my average cost per follower is around 55p and in some cases where the client has a higher profile, this has been as low as 35p per follower.
Hopefully, you can now view your follower base in these terms and can allocate them a value to your business both now and in the future. You might also want to consider your strategy for how you are growing these followers if you are spending more than the numbers quoted above. Fortunately, there are now plenty of examples of best practice in this area so we don’t need to make the same mistakes as our competitors.
If you are interested in understanding a little more about this might work for you and want to look again at your Social Media strategy, then give me a call on 07791 886258