The adventures of an analog engineer and digital storyteller who studies emerging networks and their impact on the great game of business.
Aug 21, 2012

Yesterday, I got an email from NewBlueFX, a company that creates plugins for nonlinear video editors like my favorite, Sony Vegas. The email, entitled, “You Determine The Discount Sitewide Sale” described an interesting social marketing campaign that promised a one percent discount for every retweet of its message, with a sixty percent cap.

Here are the rules from the email:

  • The Tweet-a-thon starts Monday August 20th at 12:00AM PT and goes until Tuesday 11:59PM PT.
  • Total Tweets and corresponding discount to be announced Wednesday morning 7AM PT.
  • Discount can be used on any product available on
  • Wednesday’s sitewide promotion expires Thursday, August 23rd at 7:00AM PT

I love this campaign from the standpoint that NewBlueFX clearly sees its audience as an asset. It also gives us the opportunity to play with some math to calculate potential dividends that the company is seeking to extract from those assets.

The company’s Twitter account, @newbluefx, has 928 followers (the asset). Due to NewBlueFX’s niche product line, this audience likely consists of specialized video artists who’ve made significant investments in sophisticated video editing software. Since like-minded people tend to follow each other on Twitter, NewBlueFX is betting that by encouraging its audience to spread its messages through their networks, that the message will ultimately find its way to the right people as opposed to (as traditional media offers) the most people.

The company has done something else by offering a discount for each retweet…it has established a retweet price.

Consider that the NewBlueFX online catalog contains 26 products, whose:

  • Average price is $127.64
  • Median price is $129.95
  • Mode price is $129.95
  • High price is $299.95
  • and a Low price is $49.95

By taking the median price of $129.95, New BlueFX has established a price of $1.299 for every retweet (1% of the median product price) its campaign generates–up to a cap of 60 retweets.

The model gets even more interesting if you compare it with advertising through traditional media. By capping its discount (and therefore the amount it is willing to pay for the entire campaign), any retweets generated over 60 will drive the effective cost per impression down–the opposite of what happens when purchasing traditional advertising.

Social vs. Traditional CPM

If the average Twitter user has 126 followers, each retweet has the potential to be spread to 60 x 126 = 7,560 people. Therefore, NewBlueFX has established that it is willing to pay $77.94 (60 x $1.299) for access to its audience’s audience. Had NewBlueFX decided to invest that same amount of money in someone else’s audience (traditional media), similar access would translate into a CPM (cost per thousand impressions) of $10.31 (1000*($77.94/7,560)).

Figure 1 illustrates the company’s CPM costs as a function of the retweets it generates:

  • If nobody retweets, NewBlueFx offers no discount, and therefore carries no advertising cost.
  • For the first 60 retweets, NewBlueFx pays a flat rate of $10.31 CPM, capping its campaign advertising expenditures to $77.94.
  • Then something very interesting happens. Because the discount is capped at 60%, every retweet that exceeds 60 is a bonus, essentially causing the company’s CPM rate to fall-off exponentially the more successful it is.

The more successful the campaign, the lower the CPM

 Figure 1: CPM per Retweet

This example shows the difference between social media and traditional media. In traditional media, your message will only travel as far as you are willing to pay for its distribution. In social media, your message will only travel as far as your audience (asset) is willing to spread it for you.

NewBlueFX recognizes that its audience is an asset that can pay dividends.

Does your company?


Call it the Long Tail of Twitter marketing. Would sure love to see the result data.

David Jacobs
August 21, 2012

Thanks Ron! We’ve been having great fun with this campaign here @newbluefx:disqus ! It’s part of our Awesome August customer appreciation month – we’re using social media techniques and daily deals each day to gather customer information, crowd source product development ideas and just have overall fun with our customers and friends.

David, to give you a sense of results, while the campaign is still a bit fresh, with this particular initiative we saw an increase in our Twitter followers by over 25% in less than 48 hours. Our followers on average each have 3,995 followers so we had the potential to reach over 3.1 million people. And we received an additional 125% retweets above our cap of 60 – and still going!


lisa girolamo
August 22, 2012

Thanks for the reply, Lisa. I think that David was asking about the monetary success of the campaign. After Awesome August customer appreciation month is over, perhaps I can interview you to find out how successful it was in accomplishing your sales goals?

August 22, 2012

 absolutely! would love to!

lisa girolamo
August 22, 2012

[…] August, I wrote a post called The Value of a Retweet, where I performed an analysis of a NewBlue, Inc. marketing campaign that offered 1% storewide […]

RonAmok! » Case Study: Awesome August
February 12, 2013

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