While companies plough resources into expansive social media bureaus, SumAll has found that, at least for etailers, tweets don't contribute much to the bottom line.
An analysis of Twitter traffic through conversion found that one tweet generates on average $25.62 in revenue, while a retweet will generate $20.37 on average. (That's likely because the audience for the retweet is less targeted than the original.)
OK, that's not bad, right? Uh uh. Says SumAll CEO Dane Atkinson, "Though the number seems high, it is actually of very little value to our sellers. When you think that they have dedicated resources to social marketing and that is turning into $50 to $75 a day, or $20 to $30 in margin, it is a bit thin."
SumAll also found that more tweets don't equal more revenue. It takes six to eight tweets to get double the return. Interestingly, most of its customers do tweet around six times a day.
The ROI does vary by company, according to Atkinson. For example, SumAll customer The Loop Loft, with 4,400 followers and a tweet reach of 400,000, estimates its tweets are worth $29.34, with retweets valued at $26.19.
By comparison, SumAll found that one Instagram follower is worth 10 times more than a Twitter follower.
"Usually, the vast majority of people will get more advocacy from Instagram than they will from Twitter," Atkinson says. But there's a caveat: "It's a hard channel to develop a big communications strategy around." While some companies have photo-friendly products that inspire consumers to share, many others would struggle to build an Instagram community, he points out.
Brands should wield social media tools wisely, he says. "Some just seem to assign money to social media in general, and their social media desk pushes content out to all the channels." He advises companies to find the channels that will be most productive for them, instead of believing that consumers will be fascinated by social media content of all kinds. For example, Atkinson says that Twitter is most useful for commoditized products that are offer-oriented, while products that are more differentiated might get consumer love on Facebook or Instagram.
"The real benefit," he says, "is to be able to understand the value equation and how you spend your social energy."
SumAll provides a free social metrics tool that integrates with multiple data sources including Facebook, Twitter, Google Analytics, Foursquare, and Tumblr, among others. While it tracks $2.2 billion in revenue, 290 billion social actions, and 50 billion site visits, this data on the value of a tweet was generated from 917 customers having both Twitter and a payment platform connected to SumAll.
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Susan Kuchinskas has covered interactive advertising since its invention. The former staff writer for Adweek, Business 2.0, and M-Business covers technology, business and culture from Berkeley, CA.
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