Thursday
Apr162009
What Is A Follower Worth? - Twitter Math
Thursday, April 16, 2009 at 01:19PM
Anyone who knows anyone is on Twitter, and some even have a nice following. What is that worth? This is a similar question as what is page view worth, or what is the value of an RSS subscriber? Obviously, there is not a good way to look at a single person and extrapolate, so we'll take this in groups. The goal is the get a general idea of what your following is worth, and what that actually means. Here's a tip, you can never sell a following, so get over that.
To begin with, are you famous? That is, do mass people follow you because they know you? As we are dealing only in groups of followers, say 1000 person groups, this is important. @om for example is a noted personality in the technology world, well respected and intelligent. @pud is another example of this. Now, given that that is a tiny fraction of the population on Twitter, we need to disregard them. Let's talk about normal people, you and me. We'll get back to this in a second.
Now, lets filter a little bit more. How many more people follow you than you follow? If you are underwater, detract some from the following math. If you are positive, add some. If you have more than twice the followers than whom you follow, add on a little bit more. Simple enough. Now, lets talk about traffic. When you post a link, generally, you will get around a 1% click through rate. The reason that we had to discount the famous folks, people give them extra credit for their links, no matter how banal.
Now, with out one percent click through [based on my observations, this could be different for other people, but 1% seems to be pretty regular], for every 1000 followers you have, you will get 10 hits per posted link. Now, to extract value from your clicked on links, we have to assume that you are linking to your content. Any other link is only good for promoting something that you like (this should be most of your links!) or helping out a friend. That is really your goal on Twitter, but this discussion is on money, so we need to focus on you.
We all now know how great CPM rates are right now, so the following math may sadden you some. Lets work with someone with 5000 followers, you can multiply/divide as needed. Now, lets say the average power user (if you have 1000+ followers you probably are) links to their own content three times daily. This is of course diluted among their other tweets, but its average based on (once again, this is not scientific) my observations. Now, 5000 followers X 1% is 50, thrice daily, is 150 hits per day. Lets be generous, and say that you have a CPM rate of $1. Most small bloggers get a bit less than that, but its fair. That means that your traffic, in monetary terms, is worth $.15 dollars daily.
Obviously, there are much more important numbers here, 150 readers to your blog/website is worth much much more than that. If you are buying traffic to your website, you are probably paying .25/click. So, 150 hits daily (for free) is worth paying 37.5 dollars. Plus our paltry 15 cents, and you are extracting about 38 dollars a day from your twitter friends, at 5000 followers, daily.
We can run that our over a year, 365 X 38 is 13,870, which is a large sum. Realisitically you would never spend that much on CPC ads unless you have spare change, but its an interesting number non the less. Lets take a look back at traffic, at 150 hits a day, you are bringing in 54,750 yearly, making you a major blogger just from Twitter alone. Not bad at all. However, unless you are annoyingly wealthy, you probably don't spend 30 bucks a day just advertising, so lets be realistic, your Twitter traffic is not worth nearly 14,000 dollars. However, I bet that it is in fact worth 2000 dollars, if you have those 5000 followers. This is how I get there: many bloggers that I know spend 50 to 60 dollars a month promoting their blog. Not a lot of money, but enough to make a traffic difference. Now, that is 600-720 dollars yearly, but the traffic is lower than our Twitter numbers. You will get, back to our earlier CPC math, 1 hit for every 25 cents you pay. So, that money brings in say 2500 visitors a year. Perhaps more, perhaps less.
As Twitter brings in more traffic than that, it should be worth more. 2000 dollars seems reasonable as maintaining a Twitter following is quite a bit of work which brings in an opportunity cost, while advertising is passive. But, given the number differential, this is reasonable. Another factor to consider, many of the people that click on your Twitter links will be recurring traffic, which is great if they comment, but not stellar if you are trying to boost your absolute unique numbers. So, each one of those hits might be worth less to you. This is all quite subjective. But, if we can agree that the traffic from Twitter is worth 2000 a year if you have 5000 followers, then each follower is worth around 40 cents, over a year.
I'm sure that this does not apply to everyone, but it is s a fun rough number. Look at @KevinRose with nearly 500,000 followers. Do that multiplication in your head. It begins to make @jasoncalacanis's offer to pay hundreds of thousands to be a promoted Twitter-er make sense.
My two cents, or 40 if I am following you.
To begin with, are you famous? That is, do mass people follow you because they know you? As we are dealing only in groups of followers, say 1000 person groups, this is important. @om for example is a noted personality in the technology world, well respected and intelligent. @pud is another example of this. Now, given that that is a tiny fraction of the population on Twitter, we need to disregard them. Let's talk about normal people, you and me. We'll get back to this in a second.
Now, lets filter a little bit more. How many more people follow you than you follow? If you are underwater, detract some from the following math. If you are positive, add some. If you have more than twice the followers than whom you follow, add on a little bit more. Simple enough. Now, lets talk about traffic. When you post a link, generally, you will get around a 1% click through rate. The reason that we had to discount the famous folks, people give them extra credit for their links, no matter how banal.
Now, with out one percent click through [based on my observations, this could be different for other people, but 1% seems to be pretty regular], for every 1000 followers you have, you will get 10 hits per posted link. Now, to extract value from your clicked on links, we have to assume that you are linking to your content. Any other link is only good for promoting something that you like (this should be most of your links!) or helping out a friend. That is really your goal on Twitter, but this discussion is on money, so we need to focus on you.
We all now know how great CPM rates are right now, so the following math may sadden you some. Lets work with someone with 5000 followers, you can multiply/divide as needed. Now, lets say the average power user (if you have 1000+ followers you probably are) links to their own content three times daily. This is of course diluted among their other tweets, but its average based on (once again, this is not scientific) my observations. Now, 5000 followers X 1% is 50, thrice daily, is 150 hits per day. Lets be generous, and say that you have a CPM rate of $1. Most small bloggers get a bit less than that, but its fair. That means that your traffic, in monetary terms, is worth $.15 dollars daily.
Obviously, there are much more important numbers here, 150 readers to your blog/website is worth much much more than that. If you are buying traffic to your website, you are probably paying .25/click. So, 150 hits daily (for free) is worth paying 37.5 dollars. Plus our paltry 15 cents, and you are extracting about 38 dollars a day from your twitter friends, at 5000 followers, daily.
We can run that our over a year, 365 X 38 is 13,870, which is a large sum. Realisitically you would never spend that much on CPC ads unless you have spare change, but its an interesting number non the less. Lets take a look back at traffic, at 150 hits a day, you are bringing in 54,750 yearly, making you a major blogger just from Twitter alone. Not bad at all. However, unless you are annoyingly wealthy, you probably don't spend 30 bucks a day just advertising, so lets be realistic, your Twitter traffic is not worth nearly 14,000 dollars. However, I bet that it is in fact worth 2000 dollars, if you have those 5000 followers. This is how I get there: many bloggers that I know spend 50 to 60 dollars a month promoting their blog. Not a lot of money, but enough to make a traffic difference. Now, that is 600-720 dollars yearly, but the traffic is lower than our Twitter numbers. You will get, back to our earlier CPC math, 1 hit for every 25 cents you pay. So, that money brings in say 2500 visitors a year. Perhaps more, perhaps less.
As Twitter brings in more traffic than that, it should be worth more. 2000 dollars seems reasonable as maintaining a Twitter following is quite a bit of work which brings in an opportunity cost, while advertising is passive. But, given the number differential, this is reasonable. Another factor to consider, many of the people that click on your Twitter links will be recurring traffic, which is great if they comment, but not stellar if you are trying to boost your absolute unique numbers. So, each one of those hits might be worth less to you. This is all quite subjective. But, if we can agree that the traffic from Twitter is worth 2000 a year if you have 5000 followers, then each follower is worth around 40 cents, over a year.
I'm sure that this does not apply to everyone, but it is s a fun rough number. Look at @KevinRose with nearly 500,000 followers. Do that multiplication in your head. It begins to make @jasoncalacanis's offer to pay hundreds of thousands to be a promoted Twitter-er make sense.
My two cents, or 40 if I am following you.
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