Ashton Kutcher Experiment Reveals Value of Twitter Followers

Most marketers and social media strategists know to place limited stock in a company or individual’s total number of Facebook fans and Twitter followers. Though the size of one’s social universe can make for an appealing bragging right, true value, most argue, comes from how readily the company or person can engage the base for commercial or brand advocacy purposes.

Still, with the number of followers plastered so notably on every Twitter profile, the statistic is impossible to ignore. And from a marketing standpoint, it is definitely illogical ignore the potential value associated with a broad social media reach.

But how can that value be measured? How much are Twitter followers worth?

"Two and a Half Men" star Ashton Kutcher and Internet mogul Kevin Rose recently made some progress towards answering those questions.

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The Test: Turning Twitter followers into customers

On July 26, Kutcher and Rose Tweeted out a promotion for Fab.com, a design shopping site to which both have contributed investments. The incentivized-link offered a $10 free credit to those who registered by the next day.

At the time of the blast, Kutcher had 7,309,684 Twitter followers, while 1,261,376 were following Rose.

Kutcher, who is one of the most popular individuals on Twitter and was a pioneer in establishing the vast celebrity presence on the social network, clearly has the larger social fanbase. Yet the results indicate that Kevin Rose’s blast actually generated more value for the e-commerce site.

In a report published last week, Fab.com revealed that Kutcher’s Tweet directly generated 5,888 sign-ups, resulting in a success rate of 0.08%. Rose’s blast delivered 4,356 new users, putting his conversion rate at a significantly-higher 0.3%.

Rose’s followers were more likely to drive downstream registrations. After a week, viral invitations from Kutcher’s followers accounted for an additional 719 registrations; Rose’s converted followers drove 1,147 extra memberships.

The battle for sales skewed even more favorably for Rose. Although Kutcher’s blast drove more first-day orders, by the end of the first week, its performance paled in comparison to that of Rose’s blast. As of August 2, Kutcher’s followers accounted for 75 total orders and $2,183 in revenue, while Rose had driven 158 for $7,121.

Surprise, Twitter haters! The results do show some value

When Charlie Sheen first brought his controversy to Twitter, observers flipped over the fact that the actor could potentially garner five figures for a single sponsored Tweet.

About six months later, the Fab.com results make that price point seem significantly more logical.

Although sponsored Tweet prices are not always public and not always standard, the Fab.com Tweet would have been valuable to many even at $25,000, the rumored price point for a message from the very popular Kim Kardashian (who is one of the most coveted for Twitter endorsements).

If $25,000 had been spent on each of the campaigns, the overall registration cost-per-action (CPA) would have been $3.78 for Kutcher’s Tweet and $4.54 for Rose’s (and, in actuality, indications are that a Tweet from someone with Rose’s follower count would actually fall in the $5,000-$10,000 range, creating a CPA of a dollar or two). As it is, that is not necessarily a bad CPA for a digital campaign.

The campaigns also drove direct revenue of $2,183 and $7,121, respectively. While it is disappointing that the direct revenue would not likely have exceeded direct cost, the aforementioned volume of registrations gained from the campaign adds significant compensatory value.

Don’t get too excited—"results may vary"

But before companies start pumping hundreds of thousands of dollars into celebrity Twitter sponsorships, it is worth assessing the distinctions between this campaign and a typical ad buy.

Notably, because both Kutcher and Rose have publicly-disclosed their investments into Fab.com and because it does not appear they were directly paid for their Tweets, they did not have to position their campaigns as "sponsored."

Kutcher ended up Tweeting, "I'm giving away money today! Anyone who signs up to this link gets $10 credit." Rose directed traffic to a Google Plus post that explained, "Excited to announce my latest angel investment, fab.com -- to celebrate they are opening up the service (it's normally invite only) and giving you $10 to join."

Campaigns that could not replicate that level of affiliation between the sponsor and celebrity would presumably be less likely to resonate with the celebrity’s followers. The fact, as Rose’s post noted, that Fab.com’s promotion was offering the chance to bypass an invite-only registration process similarly provided promotional muscle that only certain sponsors could recreate.

Further, while the campaign might have surprised some in that it did generate thousands of leads and did drive revenue, it also supported the notion that the mass of one’s Twitter following is not directly-indicative of its marketing value. Despite blasting his message to six million more people, Kutcher converted only about one thousand more registrations and drove significantly less revenue.

As of right now, reach, apparently unfairly, remains a significant determinant in the price of a Twitter endorsement.

Actually, maybe you should get more excited

While the nature of the Fab.com experiment likely inflates the perceived value of a celebrity Twitter endorsement, it might also under-represent the value of a Tweet to a company’s own fanbase.

Similar to advertising in more traditional media, there is no guarantee that a celebrity Twitter campaign will reach one’s existing or prospective fanbase—at best, one is hoping celebrities like Ashton Kutcher can serve as a channel for reaching one’s target demographic. Even that hope, however, needs to be curbed for reality.

Whereas Nielsen ratings provide statistically-sound insight into what audience watches a TV show like "Two and a Half Men," thereby defining the anticipated eyeballs for a commercial, no sufficiently-exhaustive measurements exist for understanding the demographics of a Twitter following. Given the nature of Twitter, all indications are that if such an analysis of a celebrity’s followers were completed, it would reveal that many users have zero value to potential advertisers.

By conveying its message through two investors, Fab.com’s campaign somewhat escaped that trap and mirrored how a company could use its own employees and social media feeds to mobilize its users. Still, insofar as the overwhelming majority of Kutcher’s and Rose’s Twitter followers are not following them specifically because of their affiliation with the site, the degree to which their Twitter audiences reflect Fab’s actual audience is quite limited.

To match their level of success, a company’s own Twitter followers would only need to be as interested in its products Kutcher’s and Rose’s followers were interested in Fab.com. No matter how broad the social media effort, given that a brand’s Twitter is naturally going to attract past/present future buyers, those looking for discounts and information on its products and those looking to directly interact with the company, it should be a foregone conclusion that the brand’s Twitter audience would be significantly easier to engage.

The correlation might not be direct, but as Kutcher and Rose clearly revealed that an expansive Twitter following can make for a valuable lead pool, companies should definitely not dismiss the importance of promoting their social media offerings. Proper targeting and engaging of social media followers must remain an objective of all marketing strategies, but the results from the Fab.com campaign indicate there can be tremendous value in simply cultivating a massive social fanbase.

Before mocking your competitors for focusing too greatly on the size of their social networks, recognize the results of this experiment, which show that a Twitter following can have significant value simply by being very large.

Fab.com's findings are detailed here. All analysis is exclusive to Call Center IQ.

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