How to calculate the Market economic value of a hashtag

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Market economic value of a hashtag

What is the economic impact of one Twitter campaign? What is the market economic value of a hashtag? Companies and marketers have been asking themselves these questions for years. Tweet Binder has created a unique algorithm that calculates how much a hashtag is worth in the market, the market value of the campaign.

Here at Tweet Binder we think that the market value of the campaign is an important metric. Using the market values (prices and rates) we can estimate how much a hashtag would be worth on “paid media”. When people use the hashtag of a company’s campaign, they are creating impacts for a brand and that has an economic value on the market. It can be translated like “how much the company would have had to pay on the market to get those impacts and reach on Twitter”. By the market we mean Twitter advertising, pay-per-tweet platforms and online and offline advertising.

Tweet Binder image
Discover the economic market value

At Tweet Binder we have created a new formula that shows the market economic value of a hashtag or term used on Twitter in the market: “how much money that hashtag would be in the market”. We have created a new standard taking several variables in consideration. The way we do it is very simple, we use a three-step procedure:

First step: Economic value of the user in the market

We need to calculate the economic value of a tweet of the user. This can be similar to an influence score such as Klout or Kred but we do it from an economic point of view. Tweet Binder calculates this score taking in consideration the following variables:

  • Number of followers
  • Number of following
  • Ratio followers/following
  • Number of lists the user is in
  • If the account is verified or not
  • Average impressions per tweet (given by Twitter, specialized blogs and experts)
  • Economic value of a Twitter impact (based on prices and rates from pay-per-tweet online platforms and CPMs by Twitter Ads)

This formula calculates the value of one tweet of each user in American dollars (USD). This value is a generic figure and the variables taken in consideration have a different weight on it. They have a different weight on our algorithm and they can change as one platform can changes its prices. This market economic value per user’s tweet is a generic score and will give us the value of a regular tweet (text tweets, in this case). We have several factors to rank each tweet that we will explain in the following section of this post.

Second step: Economic value of a tweet

In the previous section we explained how we calculate the economic value of each user. Now, we will see how much the tweets of that user are worth (how much we would have had to pay to that user). In order to do that we have considered that each type of tweet has a different value and some factors must be applied. These factors are:

  • Text tweet: value of the user times 1
  • Reply: value of the user times 0.2
  • Tweet with media: value of the user times 1.2
  • Tweet with link: value of the user times 1.1
  • Retweet: value of the user times 0.5

If you want to know more about the economic value of a tweet, you can continue reading this example.

Step three: Total market value of the campaign

Once we have calculated the value of each user and the value of all the tweets he sent, we need to see how much this hashtag is worth. The total market value of the campaign. To do that, we sum all the tweets’ value. This way we will know how much the hashtag is worth.

Market economic value of a hashtag
Tweet Binder displays the Market economic value of a hashtag

The Market economic value of a hashtag will be the sum of the value of each tweet. This amount of money is what we would have needed to pay to our users to get that number of impacts according to the market prices. As we said before, the value of each tweet and user is based on pay-per-tweet online platforms and the average CPM of Twitter ads.

Conclusions

The market economic value of a hashtag or campaign on Twitter is going to become one of the most important metrics for marketers and agencies. This will show how much we would have had to paid (according to market values) to our users in order to get the impact our hashtag had. This formula and algorithm is going to offer the market value of the campaign.

The three steps to calculate the value of the hashtag are:

  • Calculate the economic influence of each user
  • Calculate the economic value of each tweet
  • Sum all the economic values of each tweet

Tweet Binder will offer this metric for free in all the reports, so all kind of users will be able to see the economic value of their hashtags. PRO users will have a deeper economic analysis with more metrics and rankings into their reports.

Try now!

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