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Home » Engagement, News, Social Analytics, social media advertising, social media marketing, Social Media News

Cost-per-acquisition ain’t cheap on Twitter

Submitted by on June 9, 2011 – 8:09 am2 Comments

Last week we looked at the novel way in which PayPal UK has recruited over 100,000 160,000 Facebook fans and another 11,000 Twitter followers in a matter of a few weeks simply by dangling the chance to win a free iPad 2 to anyone who clicks the “Like” button. We calculated the cost-per-acquisition for PayPal UK is pennies on the pound, a huge bargain when you consider what it costs to lure in new Twitter followers by paying for a targeted “Promoted Account” buy.

How much will it set you? It depends on the industry, ClickZ reports, as promoted accounts are sold on an auction-based system. The more jockeying done by an industry to get this week’s promoted account, the higher the cost. As a result, the automotive industry, far and away the most active buyers of promoted accounts, have bid the costs up higher than, say, retailers. Here’s how ClickZ explains it:

Promoted accounts are currently sold on an auction-based model, with advertisers paying on a cost-per-follower basis to target certain keywords linked with data from users’ accounts, such as who they follow. Automotive advertisers have been paying as much as $70 per follower, though the average price ranges from $10 to $40 for that vertical, [Twitter's Chief Revenue Officer Adam] Bain revealed. The overall average for all advertisers is lower still, however, at under $10.

That’s right. A tenner, thereabouts, per follower. So, if you attract an extra 1,000 followers (pretty mediocre results, actually) per Promoted Account campaign that’s a minimum cost of about $10,000. For car brands, that same number would cost you $70,000. For that price, Mercedes could give away a CLS-Class Coupe to new Facebook/Twitter fans and probably score more cost-effective results.

And we should remember here that this is cost-per-acquisition of follower, not customer. When you consider just a fraction will ultimately buy the product, the relevant “acquisition cost” metrics then climb even higher. It tells us that if Twitter auction prices run much higher it will price a lot of brands out of the market. So you better hurry up if you’re mulling such an investment. Any delay and the price could tick up yet again.

For those in the wait-and-see camp there’s always the good-old fashioned  contests and give-aways to pad your follower numbers. Now not everybody can give away an iPad2 in exchange for Twitter/Facebook love. Can they? Well, digital marketers have shown little resistance to nicking what works. Remember the me-too flash mob craze?

Expect to see more iPad2′s on offer.

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2 Comments »

  • Dave says:

    Ok, I see a couple problems.

    1. Using a Like to be entered contest is against terms of use on Facebook, so I do not think I would recommend that as a strategy unless people are willing to risk being shut down by Facebook.

    2. $10/follower on Twitter is insane! I’ve used it and bid .50 and received great results (though .50 is still high to me). I track referral traffic and leads from my social channels, so I can safely tell you that Facebook is better at generating results (for me). That being said, a FB fan is only going to cost about $1-1.50/follower (a much better “buy”).

  • [...] simply by dangling the chance to win a free iPad 2 to anyone who clicks the “Like” button. We calculated the cost-per-acquisition for PayPal UK is pennies on the pound, a huge bargain when you consider what it costs to lure in new Twitter followers by paying for a [...]

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