Last year, there was an element of confusion surrounding social media, with people asking, “How will Twitter make me money?” In fact, social media is a far cheaper marketing option than others and when used correctly, can be ten times more effective.

Have you ever heard of Pete Cashmore? I bet the answer is no, right? Cashmore writes for Mashable, a technology based website that offers commentary within the industry. He has just been named as Twitters most influential man and it’s easy to see why when you discover he has 1.8 million people following his every word.

That’s not 1.8 million people aware of him or 1.8 million people being bugged, badgered or harassed by him. These people are interested enough in what he has to say that they actually follow his commentary on a daily basis.

To begin to put this into perspective, Coca Cola spent $300 million last year on advertising in order to boost sales. Traditional advertising works on the premise of interrupting a potential customer from what they are doing in order to gain sufficient brand visibility in the hope to sway you towards buying their products.

How many bottles of Coca Cola do they have to sell in order to consider their marketing spend a success? I bet it’s a lot!

So this year, forget about blowing your budget and focus on building yourself a genuine and credible reputation on Twitter and attract yourself thousands of followers by Tweeting about interesting and useful information. You're marketing will be more effective and your web conversion rates will be high... Just look at Dell, who last year sold over $1million of old stock in one month just by using Twitter.