With Twitter ad revenue expected to approach $1 billion by 2014, the big question for the company is whether it can continue to persuade big brands to spend their ad dollars on the social network instead of more traditional avenues like TV. It has to prove that all those promoted tweets are worth something– that if Coke spends a million dollars on TV ads, those promoted tweets will turn into more sales of Coke.
The company has commissioned a company called Datalogix, which measures the offline impact of online ads, to attempt to measure the impact of both promoted tweets (advertisements) and organic tweets (tweets that people or companies send on their own) on what people buy when they walk into stores.
In other words, Twitter wants to prove to companies that if they buy advertising on Twitter, it will have a measurable impact on sales. And in early results from a study it released, Twitter says people do indeed buy more when they’re exposed to more tweets from a brand.
On Thursday, Twitter explained in a blog post that through the partnership with Datalogix, it will now be able to measure the supposed impact of promoted and organic tweets on offline sales. Plus, Twitter announced results of a study that showed that consumers who saw promoted tweets were more likely to buy things from those brands, and that consumers who actively engaged with the tweets were even more likely to buy.
Twitter would not disclose whether it paid to have the study done.
The study found a 2-percent lift in sales among people who simply saw a promoted tweet, and a 12-percent lift among people who engaged with the tweets, compared with sales among a control group. The study also found that people who saw organic, non-promoted tweets from companies also bought more from them, and that people who saw promoted tweets bought even more — 29 percent more than people who were just exposed to organic tweets.
When it comes to organic tweets, I know that I’m likely to follow companies on Twitter that I already like and enjoy buying things from, so it makes sense that if I see the company’s organic tweets, I’m more likely to spend money with them — perhaps I already was planning on it.
A further challenge for Twitter, which this study attempts to address, is not only what people are buying but what they’re buying offline. As I’ve written before, connecting online and offline shopping habits is tricky, with people perhaps wandering around Target “showrooming” while looking at an item on Amazon on their phones, or researching prices online at home and then going into a store. Measuring the impact of online browsing on future, in-person sales is tricky to measure, but with only 5 percent of U.S. retail sales coming from e-commerce, according to recent statistics, it’s something big companies want to figure out.