Social Media Cost Per Click Analysis

Is social media becoming the most effective way to sell products at the lowest marketing costs? Or, is it just the latest Web 2.0 hype darling? As a marketing professional, I constantly try to answer these questions while I assess the cost of social media campaigns compared to advertising campaigns, traditional PR campaigns, and direct email campaigns.

All marketing campaign comparisons are flawed. Social media campaigns and advertising campaigns address different problems and often have different goals. However, I believe that a Cost Per Click analysis is good enough to be useful for most marketers, most of the time.

Over the next few months, I'll be explaining the Cost Per Click (CPC) of social media campaigns so that they can be compared to the CPC of advertising and email campaigns. My goal is to provide marketing managers with CPC examples for social media campaigns that help them decide how to use their marketing budget most effectively.

My initial estimates for business to business enterprise technology products are shown below. The data was crunched by my colleague, David Robbins, a hotshot graduate from Stanford University and a wizard with social media monitoring tools and metrics. We expect these numbers to drop dramatically.

Activity	Description	CPC
Video	Professionally produced YouTube video focusing on product or company, approximately 3 minutes	$0.30
Twitter	Message development and creation of Tweets, including community interaction.	$2.00

Twitter ROI
Although Twitter at first appears to be more costly than YouTube campaigns, I think that the data needs to be analyzed further. Our initial data relied on referral traffic from Google Analytics. Future campaigns are going to incorporate data from URL shortening and reporting services like bit.ly.

I also suspect that the audience on Twitter may be more likely to buy a product than a person that simply views a video. I'm hoping to verify this theory with more data from lead nurturing systems.

The higher cost of Twitter CPC is due to the ongoing cost of managing a Twitter feed. A typical channel needs daily updates and high interaction in order to drive the traffic back to the product site. We estimate that a Twitter feed needs 45 minutes of work a day to be most effective. This includes monitoring, response, analysis, reporting, and putting out standard informational tweets.

Twitter campaigns have many goals in addition to increasing traffic. For example, there is an increased awareness of the product and the company that is not reflected in the number of clicks to links. Twitter can also be an effective way to collect comments and feedback from customers, serving as an interactive platform to develop stronger relationships between buyer and seller. We track tone, sentiment, and analyze online interactions in addition to tracking ROI.

Although I appreciate the incredible value of social media campaigns that go far beyond CPC measurements, I am focusing on CPC as a ROI metric because it is an universal metric that can be applied to all online marketing campaigns. When I tell my friends in marketing that a typical Twitter campaign for a B2B technology company will deliver self-qualified website traffic at $2 per click, it makes it easier for them to compare the value of Twitter to other marketing campaigns that they have. I always strive to make things easier for marketing people.

I also believe that a $2 per click cost compares favorably to other traditional marketing campaigns. The cost of establishing a Twitter feed itself is zero. The only cost is the labor required to manage the feed.

For Google AdWords, you need to pay for the cost of each click on the AdWord and then factor in the cost of managing the AdWord campaign. For an email campaign, the cost of the list needs to be factored in. Even if the list is manually created, not bought, there is a labor cost associated with the list creation and management. Social media campaigns need to be compared to the total cost of a marketing campaign, including creative production, campaign management and the cost of placement.

YouTube Video ROI

YouTube video campaigns have a much lower cost per click, so low that the CPC alone compares favorably with the CPC for interactive advertising. In addition, the content of a YouTube video is often higher-value than an interactive advertisement. Clicking on a YouTube video in a social media campaign displays dense information on the product or company. The viewers of the YouTube video are a prime marketing audience. These people are actively seeking additional product information. The only downside is that compared to Twitter, the viewers of a YouTube video may not have a strong relationship with the company. Twitter is more interactive than YouTube and therefore Twitter followers will have a stronger relationship with the company.

The costs include of a YouTube video campaign include these components:

1. Message and positioning develop for the product or company
2. Script creation
3. Onsite video direction
4. Professional lighting, sound, and video creation by award-winning videographer
5. Editing of video
6. Distribution of video and channel management
7. Promotion of video on different social media channels

We analyzed the results from three different YouTube campaigns.

Video Type	Type of Product	CPC
Vision video with two company founders	Web application development toolkit	$0.14
Vision video with two company founders	High-end data storage and processing system	$0.35
Candid videos at technical conference	Web application framework	$0.50

Looking for Advertising ROI
Obviously, advertising is a big industry that is going to be around for a very long time. An integrated marketing campaign is going to combine advertising, PR, social media, and direct email programs to yield the best results. I'm looking for additional information on advertising campaign costs. If you have this information, please send me email at coda@pageonepr.com.

Future of Social Media ROI
If you have questions about how we're calculating the ROI of social media campaigns, feel free to write a comment on this blog post. We've only just started the process of calculating ROI and should become much more sophisticated in the next two months.

We've been cooperating with Brian Ellefritz, an awesome social media marketing manager at Cisco, and Jennifer Bocca, another manager at Cisco that works with Brian. They both have a strong background in lead generation ROI measurement. I feel that they'll have a lot to contribute to the discussion.

I'm also talking to Ralph Hibbs at Red Apple Marketing about SEO and PPC lead generation costs. We partner with Red Apple Marketing on a number of accounts and feel that marketers benefit from an understanding about how programs can be used together.

The primary cost of social media campaigns is labor. We have tens of thousands of time entries in our billing data, each tagged with a type of social media and PR work. The entries are usually in 15 minute increments. Based on this database and our experience analyzing the results of social media campaigns at dozens of companies, we're starting to form a view of how much time different types of social media take and what the results will be.

Since we know the time, we know the costs. The costs and the results are all that is needed to measure the ROI of any marketing campaign.

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Additional Information

Some of the example Twitter feeds used in analysis

• Linux Foundation - non-profit high-tech consortium
• Cisco - CiscoGeeks feed focused on a highly technical audience for major Silicon Valley B2B tech company
• Appcelerator - Silicon Valley startup focused on web application development tools

YouTube video examples

• Titanium vision video
• Cloudera vision video

Business Versus Personal Twitter Use

For many people, the more they use Twitter, the less value it becomes. The information flow on Twitter quickly becomes unmanageable as the number of people they follow shoots past 20.

Twitter is the most popular and valuable social media tool I use. However, it's also a tool with a wide range of problems. I'll briefly describe some of the problems I've encountered and explain the steps I'm taking to solve these problems by changing the way I use Twitter.

1) People mix business promotion and personal information on the same feed. This is similar to meeting a business associate at a BBQ on the weekend and having them constantly talk about business. Or, it could be similar to a business associate constantly talking about their personal life during a business meeting at the office. In the face to face world, people have developed social etiquette and don't mix business and friendly discussions in the same way that they do on Twitter. You might have an interest in their personal lives and if they're meeting up for drinks after work, but you may not be interested in the details of their work. Or, you might be interested in what they have to say about business, but not be interested in what they fed their dog in the morning.

2) People use Twitter both as a publishing platform and as a discussion platform. Twitter can function as a short publishing platform for updates or it can function as a quick discussion platform around a specific topic. However, it breaks down when people don't understand the difference in use and try to use a single feed for both purposes. A Twitter feed will be overrun if you subscribe to a few Twitter newsfeeds. By receiving Twitter newsfeeds, a person severely limits the usefulness of Twitter to function as a platform for community building.

3) People are using Twitter as an automated marketing platform with bots. There are a growing number of Twitter bots that will automatically subscribe to a feed based on keywords in a public feed. This creates a large number of followers for a given feed and further hampers the development of Twitter as a gathering of people having interesting discussions. In addition to automatically following people, some of the bots will also send messages to people, either with @replies or direct messages.

I'm experimenting with a number of Twitter techniques to help solve these problems. For the past few months I've been using TweetDeck groups and search screens to identify Tweets that were most relevant to me. This technique no longer works. I was forced to make a radical change.

My current strategy is to create a number of different accounts and create a persona around each account. I'm also using a private account for one persona to prevent the feed from being picked up by bots and people outside of the private group.

My four accounts are:

1. @codawork for social media, open source, technology and other work-related information;
2. @codapageone for private information for staff at Page One PR;
3. @codasurf for information related to the sport of surfing;
4. @craigoda for personal information about my life and the interesting lives of my friends and associates.

I've also switched to twhirl as my main Twitter client because of its ability to support multiple Twitter accounts.

I've been using the new system for about two weeks and am enjoying Twitter much more than I was before.

Future of Twitter Making Money - Latest Clues from CEO

Here's an interesting video of Twitter co-founder and CEO, Biz Stone, talking about the future of Twitter.



There's no real clear answers in the video. However, I did like how he described Twitter use as a hybrid of "marketing and customer service" for many businesses.

He's dodging the really juicy questions about commercial offerings. However, he did indicate that they do have a product manager that is researching the best way to commercialize Twitter and will announce something by the end of the year. He speculates on "lightweight analytics for business."

As someone that uses Twitter as part of my work, I'll be eagerly looking forward to this news.

Social Media Newsletter Tracking

More than 1,000 people read the Page One PR social media newsletter in the past few days. This is far more than the 50 I thought would actually read the first issue. The difference in results is largely due to viral distribution, something we've been tracking with the MailChimp newsletter platform.

It's exciting to see the analytics, feel the love and study which links in the newsletter were the most interesting to our readers. Almost 40% of the clicks were to get additional information about the product launch campaigns. This surprised me since I thought that the case studies would be the most popular link.

I was also pleasantly surprised to see that the newsletter was forwarded to hundreds of people. It's encouraging that people see value in information on how to roll out product launch campaigns with social media and traditional marketing techniques.

Although I feel that the first newsletter hit the mark and we had viral distribution, I'm still not sure what makes good content. Although the newsletter was based on a blog that I posted on this site, it was Lonn Johnston who suggested that we use the blog post for the content. Oddly enough, I wouldn't have suggested this content for the newsletter myself. He saw something in the blog post that he found interesting and then worked with the team to hammer out the final text.

So, I have to rely on the wisdom of the crowds to find interesting content. If people have ideas for the next newsletter, please send them to me or write comments on this blog.

We're considering providing more information on social media metrics or reports.

Page One Social Media Services

Page One PR is about to launch a new web site. We've tried to make the information more useful to marketers by providing case study examples of our social media work, describe the Page One Process that we use to implement campaigns, and show metrics that we track.

There's easier access to the Page One Blog, Twitter feed, YouTube channel, and Facebook Group so that people can stay connected with Page One.

What the new site lacks is information on what our services cost. PR firms don't discuss pricing until they've developed a custom proposal for a client. Page One operates the same way.

I'm not sure this is necessary. Pricing among different social media firms of the same quality are going to be roughly the same. Law firms, business consulting firms and accounting firms operate the same way. Each service firm will claim that their services are better than the competition. I would like to be more transparent with our services and let companies decide for themselves if they want to work with us.

Next week we're sending out a newsletter that describes an example product launch in Silicon Valley. The newsletter indicates that the product launch takes 200 hours to complete. From this information, people can make guesses on the cost of the services. At $200 per hour, the cost would be $40,000. If we've already been working with a client for a number of months under retainer, we will be more efficient. The costs will be considerably lower, closer to $20,000. In many cases, most of the product launch costs for retained clients is covered under the existing retainer.

The typical monthly retainer is between $10,000 and $20,000 per month. This covers an integrated mix of social media and PR services. If the company only requires social media services, the retainer may be lower.

We often suggest that companies do their PR and social media internally instead of hiring an outside vendor. The staff in the company know their own product the best and are the best advocates. However, in many cases it is cheaper, easier and faster to hire an outside vendor for social media and PR. It may be difficult to find people with social media campaign management experience. Or, companies may have a requirement to gain visibility rapidly instead of waiting for their staff to gain expertise.

Ultimately, it is going to come down to a decision about the lowest cost way to sell the most product. Personally, I believe that hiring an experienced PR and social media firm is a good use of money. A good social media firm will function as part of your executive team.

Creating Good Social Media Content

Good content is the key to a successful social media campaign.

Good content is not created by wizards, it is built brick by brick by real marketing people with simple tools of measurement and positioning.

I spent the weekend surfing at Cowells beach with my nine year old son. Cowells is one of the easiest beaches to surf at and is usually packed with people learning to surf. As I watched my successfully catch wave after wave that adults next to him were missing, I thought about the importance of positioning. The position of a surfer before catching a wave is the key to a good ride. Once the surfer gets up on the wave, the ride is maintained with a series of small adjustments based on constant feedback from the board and the wave.

Creating good social media content is like riding a wave, the key to success is to set up the right positioning prior to the campaign and then to constantly measure and adjust the content during the campaign.

I view social media professionals more as craftsmen than as artists. Describing good content creation as an art makes it seem unattainable by the average marketer. This is not true. Just as everyone can learn to surf if they understand a few basic concepts, everyone can produce good social media content.

Although there are high-priced positioning and branding firms that will charge a fortune to develop positioning, most companies don't need this. There are only two questions that you need to answer for a social media campaign:

1. Who is the target audience?
2. What will interest them?

Once you've answered the basic questions and you've inserted your main product marketing messages into the content, you've got to measure the popularity of the content.

This is the step where people fail. Many people simply don't measure the popularity of their content. It might be painful to see low views to a blog or a YouTube video. Or, it might be bothersome to log into Google Analytics and take the time to understand the data. For whatever reason, people are resistant to reviewing the popularity of content and trying new ideas on a regular basis.

Surfing a wave has again led me to understand another key to social media. The magic secret of good content is simply a willingness to adjust and learn.

Using Social Media with Product Launch Campaigns

According to the Page One blog companies are getting 1,000 to 4,000 percent jumps in their corporate web site traffic after implementing social media campaigns. Our new web site will make equally bold claims, showcasing work that we did for Google, Cisco, and Sourceforge that illustrate big gains of over 100% for key metrics such as registrations, media coverage or show attendance.

How much of this is hype and how much of it is real? I wrote much of the content for the site. I'll give you the inside scoop.

The numbers are actual, not exaggerated. However, after reading through our blog posts, I realized that readers may come away with the misunderstanding that social media was the only driving force behind the results.

This is not true. Social media is a component of an integrated marketing strategy. It is almost a magnifying glass that brings good content into clearer focus for a wider audience.

However, without good content, social media is an empty pipe.

The most common marketing campaign in Silicon Valley is the product launch campaign. I don't think people have a choice of choosing between a traditional marketing and PR launch or a social media launch. People have to do both. I know, at first it seems more costly. However, in the harsh reality of today's economy, it's not. The reality is that companies are scaling back on advertising, direct marketing and public relations. They're not giving up on these proven techniques. They're streamlining the process. Let's face it, if there are less publications now days, there's going to be less work to manage the advertising campaign.

When I do a social media launch of a product, it's actually an integrated public relations and social media launch. The elements must work together. I've worked on a number of integrated social media and PR campaigns in the last few months - Cloudera, Appcelerator, Zend. All the campaigns generated between 10x and 30x increases in web site traffic. That's 1,000 to 3,000 percent increases!

Here's a simplified step by step process of how it works.

Message Grid - develop high level message buckets for each target audience.

Press Release - write a traditional press release and put it to the wire on the launch day. It doesn't make a big difference what wire service you use or what format the press release is in. Doing a social media press release instead of a standard format press release will not have a big impact on your campaign results. Adding SEO techniques to a single press release will also not alter the organic or PPC search results that much. After experimenting with different formats, I've settled back to the traditional press release. Focus on the basics, writing a press release that is accurate, easy to understand and contains your main message points. Keep in mind that the value of any press release is now diminished. There are other channels that you must use in parallel to get the messages out.

Media List - Create a traditional media list that includes print, online, and bloggers. After experimenting with Cision and many other services, we've started to use Excel spreadsheets and Google Docs again. In my opinion, the days of automating a mailing list of contacts is over. Spreadsheets are a pretty basic and easy tool to use effectively. Ultimately, I don't think it matters too much what you use to manage your media list.

Vision Video - produce a 3 minute video of the top two executives that explain the product. Script out the video ahead of time using the message matrix to cover all the major buckets. You must provide direction for the video. The content of the video will have a big impact on the number of views for the video. Here are two examples that I worked on, one for Appcelerator and one for Cloudera.

Product Video - produce multiple videos of the product. The length of the video can vary between 15 seconds and 5 minutes. The basic product video in Silicon Valley is a 5 minute screencast made with Telestream ScreenFlow on the Mac or Camtasia on Windows. The voice of the engineer that built the product is usually used for audio.

Promote Videos - there are a number of techniques that we use to distribute and promote the videos. We've been continually developing different promotion techniques. Two general rules are to launch all content on the day of the launch and to cross-promote all the content in different channels. Obviously, there's a lot more strategy behind content promotion.

Corporate Blog - produce two different blog posts for the corporate blog, one with technical details and vision of the product. The other blog post, usually by the CEO or head of the business unit for the product, talks about the business benefits of the product to customer. Include links from the blog posts to all the different content - videos, Twitter feed, product demos. Save blog posts for the day of launch.

Twitter Management - Build up the Twitter following on the day of the launch. It is important that you define the voice of your Twitter feed in your internal planning document. The Twitter feed should have the personality of a single persona or person. Push out valuable content that other people will want to retweet. Remember, if you're not getting any retweets, then what you have to say on Twitter is not interesting. Sorry, but these are the harsh realities of social media. I'm not suggesting that every Tweet should be retweeted by someone. However, if you don't get any retweets at all in a day, then you need to change your strategy.

Direct Email - Time direct email campaigns with the press release and include all relevant links to social media content and channels. Use the direct email to drive followers to Twitter and viewers to the blog. If the email list is of your existing community of customers, then provide special information or special privileges such as access to special videos before the general public.

Other Progams - Depending on the company, you could may implement strategies for Facebook, LinkedIn, IRC, and message forums. The work required to update a Facebook page is usually minimal. We generally don't use Facebook applications in our campaigns, primarily due to the cost and complexity of producing a Facebook application. Since we're primarily a PR firm, it's easier for us to produce text and videos.

The key to getting results in a social media campaign is that all the different components must be used together, linking to each other, and using a common set of messages.

I do agree with many of my colleagues that social media is a little over-hyped now days. Sure, I know that it is definitely the future and gets great results today. However, it is not the silver bullet that will cure all problems. Traditional media channels are still very much alive and must be managed effectively. However, if that is all you are doing, it is definitely not enough.

If the work to manage all the channels seems daunting, take a step back and focus on streamlining the process for traditional channels. Social media is not something that can be ignored. I can guarantee you that your competition is either implementing a social media strategy today or is planning to launch one tomorrow.

Social Media Sabre Award

My colleague Jenna Boller recently wrote about a social media campaign she ran for our client. The campaign is a finalist in the SABRE awards software category. The campaign was called Who's the Next Open Source Idol? and involved videos of open source mascots dancing and encouraging the public to dance on video. We're competing for the award against A&R Edelman for Adobe, Access Communications for Intuit, and Waggener Edstrom for Microsoft.

We ran the campaign in August of 2008 at LinuxWorld in San Francisco. This was one of the first social media campaigns we did at Page One. It's also one of the few campaigns where we tried to focus on humor to get the content to go viral.

Humorous videos are generally high-risk. They often take a lot more time than planned and can fall flat. In order to deliver more value to our clients, Page One has started to focus on more conservative video concepts such as vision videos and screen casts. These are lower risk and easier to produce within a fixed budget.

I was pleased that SABRE award made me remember that sometimes people take big risks with campaigns and produce great results.

This campaign was also unique because the video was produced by a social media team that wasn't on the account. This social media team was created just for the project by combining people from different accounts. Since this campaign, we've moved to a process where the account team is also responsible for social media.

The process to generate the idea for the campaign was also unique. For this campaign, multiple people developed ideas for the campaign. We had a meeting where different ideas were brought up by different people. We selected the best idea. We've now moved closer to a formulaic approach to content creation based on a handful of templates.

The notice that we're a finalist for the SABRE award caused me to reflect back on the old campaign and the management process for the campaign.

I feel that we've made the social media campaign process more efficient in the last few months and the campaigns are easier to manage from a business perspective. However, I think that we should take another look at our campaign development process and question whether or not we're creating an environment to foster maximum creativity and enthusiasm from everyone.

In particular, I would like to try to form temporary teams of people from different accounts to come up with different ideas for a campaign. Instead of developing the ideas during the meeting, each person would come to the meeting and briefly present their idea. We could then decide on the best idea, either as a group or a combination of group and manager.