Bancography | Branch Planning, Marketing Research, Brand Strategy

The Wrong Way To Measure The ROI Of Twitter And Vine

In an article titled What Is the Right Way to Measure Your Twitter & Vine Marketing?, HubSpot writes:

“We like to call it closed-loop reporting. Closed-loop reporting on Twitter is the process of tracking the path of a user who clicks on a link in a tweet, visits a page on your website, completes a form on a landing page to become a lead, and, ultimately, converts into a customer — so you can directly attribute customers to your Twitter marketing, and evaluate the effectiveness of Twitter as a marketing channel for your business.”

 My take: Nope. Sorry. Wrong way to measure Twitter/Vine ROI.

Why is this wrong? For one, it ignores how someone came to see the tweet in the first place. Without knowing what other messages/media a prospect has been exposed to, attributing the sale to Twitter is inaccurate.

But there’s something else missing from HubSpot’s methodology. None of the comments on the blog post mentioned this (as of the time I read it), and it’s really too bad that there aren’t more (any!) people calling them out over this. 

The missing element: Cost.

Folks, you cannot — I repeat CANNOT — measure ROI without measuring cost. Cost is the “investment” component of the ROI formula. Sadly, too many social media gurus choose to ignore that.

It’s mind-boggling that the HubSpot makes no mention of capturing the costs involved with using Twitter/Vine as a marketing channel. The cost of sponsored tweets (if used) are easily measured, but allocating the costs of shared (or even dedicated) resources to the channel is no easy matter. 

So what should marketers do? The best answer might be “nothing.”

Accurately measuring the ROI of marketing investments is tricky business. Assume for a moment that you have a $10 million marketing budget, and 40% is in mass media channels, 30% in direct marketing, 25% in various other media/channels, and 4% in social media (excluding Twitter), and 1% in Twitter.

Is your time best spent figuring out the ROI of the 1% or the ROI of the 70% in mass media and direct marketing? Right. 

Back to the ROI drawing board.


Ron ShevlinRon Shevlin is Director of Research at Cornerstone Advisors. Check out Ron's book, Smarter Bank.. According to Brett King, “Ron is famous for his snarky sense of humor, and his well-researched, well-considered takes on banking and customer behavior. If you are in banking, you should read it — you will come away smarter and better informed." New! The Kindle version is here!

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Comments

  1. Pricepoints says:

    Do you really think that “so you can …….and evaluate the effectiveness of Twitter as a marketing channel for your business.” means something different than ROI? Maybe call them out for not being specific enough, but I’m calling you for being overzealous on this one… I love your blog btw :-)

  2. Every time I read something like that post from HubSpot, it reminds me of a song from the 80s (yeah, I’m THAT old):

    It’s poetry in motion
    And now she’s making love to me
    The spheres’re in commotion
    The elements in harmony
    She blinded me with science
    “She blinded me with science!”
    And hit me with technology

    And that’s what the HubSpot article is guilty of: Trying to blind us with science. It’s all so neat and trim, isn’t it? Just measure a little of this, and a little of that — and before you know it, the “elements are in harmony” and you’ve measured Twitter ROI! It’s poetry in motion.

    More like snake oil.

    The more important point, though, is the one at the end. For chrissakes, HubSpot (and all the other gurus), quit wasting time w/ cockamamie formulas for measuring the “ROI” of the 1% of spend, and tell us how to better measure the ROI on the 80%.

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