Is Social Media Traffic Worth 1 Cent Per Visitor?

Jan 8th

Fake Businesses

Today I came across an AdWords ad for an automated ebook business model website. Their screenshot highlighting their Paypal account was:

  • hosted on another site
  • named powersell_paypal2.jpg
  • did not show payments but showed withdrawals

Fake Business Statistics

A lot of (mis)marketing techniques are more covert though, through the use of

Fake / misleading research is remarkable, so it is more likely to be cited, and recycled by people hyping similar business interests. A while ago MarketingExperiments did social media marketing research which was not really research, and yet those false stats promising social media goodness just appeared again:

Claiming that the above ROI is 1,427% higher is at best dishonest. You can teach the value of something without syndicating lies as truth.

Social Media Traffic Does Not Buy

Want to know the truth about most social media traffic? Its garbage. Some of my AdSense ad campaigns use an affiliate account to track ROI. Until I filtered them out for poor performance, MySpace and Digg were providing about 90% of my overall affiliate ad volume with 0 conversions, whereas some of my better affiliates make a sale a day or a sale every few days on far less traffic.

I know that was an isolated example and it would be unfair to judge the entire market on that, but consider this...those ads had a horrifically low clickthrough rate and still only cost a dime a click. If I was getting a lot of volume on a network that size while bidding next to nothing then that ad inventory is not worth that much. Simple as that.

Some Top Publishers Are Afraid Social Media Marketing

Some leading publishers are even worried about deflating their CPM by getting to much lousy social media traffic.

Comparing Social Media to Direct Navigation

Why do you think domainers make so much money without even needing to develop websites? For a person to end up on a parked page they have a lot of implied intent in their location. The same is true for a search result. If you just searched for something you have implied intent. Google is worth 200 billion and I am not. :)

For all the hype Facebook ad system has got, there is limited value in their user data:

Google actually knows all of that, and at least 10X more data about users than Facebook, but hasn't seen the need to really mine the data yet, since search intent has proven to be worth about 100X more than that kind of data so far.

If social marketing gets you clean links it is great. If people recommend your product to their customers that is great. I get mentioned on Seth Godin's blog and sales double. I make the front page of a social news site and nothing happens. Most of the social media hype is hollow and without value.

Put Social Media to the Test Today

Still don't believe me that most social marketing traffic is worthless? Ask yourself why StumbleUpon only charges 5 cents a visitor for any category - including big money categories like daytrading, gambling, and financial planning.

If the successful secret marketing strategies that send 4 cent traffic are buzzworthy then they could at least have the decency to tell me I can get the same thing for a nickel with no effort.

Published: January 8, 2008

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Comments

January 8, 2008 - 12:50pm

SU prefetches results, so you often see hits from them in batches of four, when in fact you may have received no real visitors. It's annoying.

So you have to divide the number of SU uniques by three or four to get the true figure to work out your conversions. Which, in my experience, is still usually zero.

January 8, 2008 - 5:12pm

One of the issues I see with social media is that the metrics associated to "success" are different (or perhaps should be). It's much more about brand impressions versus conversion rates and I don't know if any social media site suggests anything but that.

As you indicated though, getting links is great and could be considered a key metric - this is much more difficult to obtain without consistent success (home page/popular page views) in social media websites though.

If you captured the time investment in creating targeted social media content in comparison to direct links generated as a result, perhaps you could quantify the value of social media in that regard.

I definitely would agree with the quality of social media traffic, as it relates to the opportunity for sales conversions. It just doesn't seem to be there.

January 8, 2008 - 9:40pm

If you're interested in seeing that vid - http://www.stompernet.net/goingnatural2/ .

I thought the numbers were a little sketchy too. I mean, ROI, c'mon. It's not ROI without knowing how much your visitors purchased.

January 8, 2008 - 11:06pm

I really hate that video. It made me cringe.

Totally off topic, but do you know what would be cool Aaron?

If when I go to view my profile I could see what topics I've commented on. Just an idea!

I can also just use your search bar to search for my name...

January 8, 2008 - 11:27pm

Hi Tommy
I want to add that feature, but need to get another Drupal developer. My current one is great, but he took on too many projects at one time.

January 9, 2008 - 1:36am

I think that's a rather broad brush to paint social networks with. Yes, the big sites like Digg and SU provide lots of non-buying traffic, but the long tail is where it's at.

If you sell car parts, then social networking sites on cars and racing are a good investment of your time. Much less traffic, but much easier to convert. I think people get so focused on Digg that they forget that there are literally 1,000's of social networking sites out there.

January 9, 2008 - 3:13am

I also think social media traffic is mostly garbage. They're mostly fly by nighters who visit the story and leave without buying anything or clicking any ads. Although the low cost may make up for it. I think it was a BlueLithium ad study that claimed that user-generated content converted at a fraction of what premium site advertising did, but since you could get it so much cheaper, you could buy more of it to offset the poor conversion rate and even it out in the end. The report was probably biased (to sell more ads), but there may be a bit of truth to it. Perhaps social media ads are the same.

January 9, 2008 - 4:25am

I've operated BookmarkSync and Sync2It for years and have detailed knowledge on user bookmarking patterns and statistics. del.icio.us is largely over hyped, I suspect the others are too.

http://www.bookmarksync.com/press/041207_1

- Jack

January 9, 2008 - 7:30am

Nice to see some more voices in the forest speak the obvious. How bad does the traffic have to be before Google even offers Adwords advertisers a way to opt out of "Image Sharing" "Video Sharing" et al.

The bottom line is user intent is the key. If the user is killing time on social media sites, or digg or whatever, they're not clearly not intending to "convert" for anything.

January 9, 2008 - 11:31pm

Cool Aaron,

Your blog is good enough that I don't mind searching through it to find threads I was interested enough to comment in anyways.

;)

January 10, 2008 - 3:49am

Aaron,

I have no doubt that "bulk social traffic" is worth little more than the cost of the electrons your server has to ship out, but the brush you're painting with is very broad, no?

If you think your predictable losses from running Adsense on Digg (what were you thinking?) is what social marketing is all about, you have a lot more studying to do.

Contextual advertising is a different animal to start with, social media is different, and every channel within that broad category is very different.

Facebook advertising is a good example - if you approach it like search advertising, you'll reap little reward... but you can profit if you do it right.

Just like all the "cheap alternative" PPC engines years ago, a lot of "Web 2.0" businesses are just running a game. No doubt.

Our ROI on social media isn't imaginary, though, and I've learned a lot by working with Don.

January 10, 2008 - 4:58pm

Hi Dan
I agree, in some sense, that social media is more about awareness than conversion. But ROI is a measure of conversion, and that is what seemed quite inauthentic, IMHO.

A better offer for social media sites is to have the offers catered to each site, and to offer something they would find of value for free, to get them interested in your site and offer. The Blogger's Guide to SEO, SEO for Firefox, etc...I know the sorts of offers that work well for web 2 and social sites.

I was talking to ShoeMoney and he had some great examples of stuff that he found to work too.

But the comparison ROI stat comparing social media to search was apples to oranges, or maybe apples to lychee.

January 10, 2008 - 10:01pm

Well, the comparison in the MEJ article was traffic to traffic. I agree with you that MEJ didn't do themselves (or anyone else) a favor by describing that as an ROI increase without actually showing any data on visitor responses.

So for all we know, the real ROI could have been negative, or even better than what they stated. There's simply no way to tell. In spite of that, I'm willing to at least entertain the possibility that the folks who put that article together aren't complete idiots. Nick Usborne, for example, strikes me as highly capable.

The next time I see Don Crowther, I'll slap him for not questioning those stats. I suspect that the reason why he didn't question it is that the kind of (real) ROI we've seen in our social marketing tests has been very comparable to what MEJ claimed.

The results from the current campaign will be more meaningful once they've opened the shopping cart and have revenue, but we've already seen tens of thousands of opt-ins from the viral campaign.

By comparison, we have (so far) exactly 1 opt-in on 10 cents of Adwords spending. Talk about an ineffective Adwords campaign... one click, ten cents, 100% opt-in rate. I'm sure we could improve on that, but it wouldn't change the value and impact of our social marketing.

Anyway, if you go past Threadwatch to read the MEJ article itself, I think the methods they describe are things that you yourself would consider effective marketing.

After speaking with you today (always a pleasure, BTW) it sounds like you just don't consider what they did 'social marketing.' On that, we will have to agree to disagree.

BTW, I think Marketing Experiments acquired Marketing Sherpa, not the other way around.

January 16, 2008 - 6:12am

Aaron congratulations for pointing out there's an elephant over in the corner, IMHO, Social Marketing ROI is an oxymoron because Social Media sites provide nothing more than a little branding which is likely ignored... or worse despised by the ... er... Web 2.0 communities.

When you say to Social Media Marketers.... Yeah... but how much did they buy? You get the old blank stare reminiscent of SEO clients Circa 1994! Then they go into their "link spiel" and my eyes glaze over because frankly I've yet to spend a link or take it to the bank and cash it. YouTube Rocks and is Social Media that works because I get feedback on the products and demos from real live customers, I get real sales because... who'd a thunk.. a video would help sell online what is normally played and sold offline.

Hmmm we got content that brought over 100,000 uniques over Xmas and nearly 200 subs to our channel, we got video that plays on our site and improves conversion. That's Social Marketing... the other stuff is Social Traffic which is really more of an expense or BWOB (big waste of bandwidth) then something beneficial and tangible! But then again I'm one of the guys who thinks branding is the excuse used for campaigns that don't Make $$$$. ;-)

The rest of the SM sites are where layabouts with nothing better to do go to kill time while working... or hanging out in their parents basement... not often the audience I'm seeking to put my clients in front of unless they're selling iPhones, video games or lifestyle trinkets and music!

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