There’s been a lot of debate in the Twitter-sphere about who to follow or not follow in managing your brand. Some experts advocate following everyone that follows them. Others selectively follow; others just don’t follow anyone back. Some businesses follow folks that they want to direct message and so on. Some of these strategies work for them and some don’t. We don’t have a definitive answer on what is the absolute rule (if there even is one).
However, we did notice an interesting pattern in our never-ending quest to find signal amongst the noise.
We noticed that every company that underwent M&A in the past year had a higher follower to following ratio than companies that were deemed as their competitors. M&A companies had on average a ratio of 2.7 (followers to following) while their competitors had a ratio of 1.7. Furthermore, these same companies averaged slightly higher tweets per follower average than competitors: 1.6 to 1.4.
How did greater follower ratio and slightly more tweeting lead these companies into an acquisition?
Follower to following ratio has been debated on Twitter many times. Yet the companies undergoing M&A demonstrated a clear ratio, as did their competition. One such explanation could be that regardless of the company’s Twitter strategy, customer service, thought leadership, “engagement,” the number of accounts that a company is following is constant. Outside of any type of “gaming” the system, the deluge in additional followers means that thought leadership and strong content make this account a “must follow” for the industry.
These ratios are somewhat in line with niche thought leader individuals on Twitter. These companies appear to be thought leaders in their respective industries. Part of being a thought leader is publishing their thoughts. And now with more followers their message is being amplified and consumed by more. And by tweeting more often they show up in the stream more than competitors….
“B2b marketers believe social media is critical to organic search success. Marketers rate social media as the second-most important factor (64%) in search, behind only strong content (82%). (BtoB Magazine)”
Or rather: Content first, distribution second.
Part of any deal is being included on the short list. “The squeaky wheel gets the grease.” By pushing out more of its thought leadership more often these companies could ensure that their messages were being seen when it mattered. After all since any B2B industry is very specific, most likely these companies are all known by each other; however the constant “nudge” reminded potential customers, clients, and acquirers that this company was there.
Thus, when the time comes to make a decision of what company to buy, the groundswell answer to put on the shortlist is the company that comes top of mind. After all, if X number of people are asked about what company you should buy and all X answer the same thing, aren’t you more inclined to think X is great?
This groundswell also led to the urgency of the M&A. “Well if I don’t buy this company now, someone else will!” (Notice how similar companies are usually bought at the same time – for example, Wildfire, Virtue, and Buddy Media.)
So now the statistics start to make sense. Content is important but distribution is a close second. If you are just tweeting garbage then what is the point of having it read? It’s the companies that value both the content AND the distribution that thrive and eventually hit the acquisition point. They acquire a higher than normal follower ratio because they have good content and are able to achieve a slightly higher than normal distribution channel because of their ability to tweet more ensuring that their tweet is seen and possibly amplified.
So what’s the actionable lesson learned here?
As a startup, we all are swinging for the fences, and hope to be the next Facebook. Yet it’s hard for us to imagine that Facebook ideal of success was to have all students at Harvard on their site. It’s easy to see what a site like eBay, Facebook etc. could be at scale, but how do you get there?
Starting with the niche is always good. Being a thought leader in a niche community is important and that comes from creating good thoughtful content. Having a fan base is important in getting feedback on your content, and in making it even more powerful.
At Cooperatize, we definitely try to be an inch wide and a mile deep. It’s hard sometimes because as an entrepreneur you always see opportunity and that’s where discipline, focus, and hopefully this data will help you to stay the course.
Once you have created that content, don’t forget about distribution. After all, the greatest movies don’t end up in the movie theaters, the ones with distribution do. Users cannot consume your content if they don’t know about it. (I’m sure you’ve heard that one about a tree in a forest.)
Not all eyeballs are the same. We had companies with as low as 116 followers (much lower than the Twitter average of 208) and some as high as 35,000. There was no correlation at all with acquisition cost. They were the leaders in their field big or small. If you become the leader in your niche, perhaps someone will come a knocking. Of course, keep an eye out on that magical 2.7 ratio …
We analyzed the Twitter accounts of every company to be acquired for less than a billion dollars this calendar year (2013) that plays outside of the social arena; since social is part of Twitter’s game it would skew our results. So that means we did not include companies ranging from Foodspotting (OpenTable bought for $10 million) to Tumblr (Yahoo! bought for $1.1 billion). We were left with companies like Maidenform, a women’s undergarment company bought for $575 million by Hanesbrands, the New York City focused real estate site Street Easy picked up by Zillow for $50 million, and Crashlytics, a crash reporting solution picked up by Twitter for $100 million. We also included competitors of the companies that got bought as defined by Crunch Base. We did not take into account how companies were utilizing their Twitter account. Many companies that use Twitter will have a greater number of people they are following so that sensitive information can be “DM’d” or direct messaged to them. This did not really change the skew since it just meant more people followed them. (You must bi-directionally follow in order to DM).