Monetizing Twitter -- Bring on the Ads!

True, no one asked me. But here's my two cents anyway. Twitter should open up its platform to advertising. That's right, advertising. Forget all this hoo-ha over selling data or paid business accounts or dashboards . . . Twitter has everything it needs to build a wildly-successful ad driven business model. It should get on with it.

The two hallmarks of successful advertising-driven businesses are 1) massive scale and 2) abundant context. How has MySpace built such strong advertising revenue atop their social media platform? Huge scale and a ton of context. Same is true of Facebook and Yahoo and Six Apart. And, of course, the mother of all ad supported businesses -- Google -- is all about scale and context.

Twitter's scale has been well documented. Huge and growing. Does the fact that much of the Twitter traffic exists on third party clients make in-stream advertising less practicable? I don't think so. I think it actually solves the problem of how Twitter will be able to monetize its off-platform traffic. Third party apps can choose to present ads along with the rest of the stream or pay a fee to receive advertisement-free data.

As with each of the social media platforms listed above, Twitter's unique experience will require a unique ad format. In this instance, I think the format is pretty easy to envision. Twitter should constrain advertisements on its system to 140 characters or fewer. By doing so, Twitter ads will be pretty spartan. But if Google ads have taught us anything, it is clear that a relatively small number of characters and a link are more that sufficient to engage a consumer. Moreover, by matching the ad format to that of a tweet, the ads will not only fit well with the consumption behavior on Twitter.com, it will also work well with the many third party experiences enabled by Twitter's API. Twitter need only create some visual distinction between tweets and ads and it can very simply insert the ads in the tween stream, as can Tweet Deck and Siesmic and Tweety and StockTweets . . . .

What about context on Twitter? Huge and growing. The very data others have suggested Twitter should sell to third parties is invaluable to create the necessary context for a successful advertising model. Not only will Twitter know the things about which any given user is tweeting, it will also know who that user is following and the things about which they are tweeting. That's a huge amount of context for advertisers. I'm guessing Toyota would love to advertise to an individual who tweets about shopping for a new Honda Hybrid. And they are likely just as eager to advertise to an individual who follows numerous eco-tweeters. It is easy enough to envision a self-serve platform that allows a huge range of advertisers to bid for context and get great results.

The best thing about context-driven advertisements is that, when well-executed, they can be viewed by consumers as content, not just advertising. Look at Google's ads as case in point. It has been a long time since I've heard even a hint of objection to advertisements on Google. Why? Because the ads are often more compelling than the organic search results they appear beside. True, Twitter ads won't be a response to a query like in Google. But there should be more than enough signal for businesses to get great results advertising on the platform.

Finally, I think that users would embrace Twitter ads. We all recognize that Twitter needs a business model and we all want a long-term sustainable platform. If executed well (watch out for those lurking privacy trolls!), Twitter ads would become a natural part of the Twitter experience and add value, not take away from it. Better yet, we could all stop speculating about Twitter's business model and move on to more interesting discussions about things like the transformative impact of the real time web. So do us a favor Twitter and start serving ads already. I, for one, look forward to it.

Comments

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I guess you're right in guessing that Toyota would love to advertise to an individual who tweets about shopping for a new Honda Hybrid. However, what prevents them from tweeting to that person (via an @reply) directly, without paying Twitter anything for the "ad"?

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The balance of power on twitter is different from television, radio or billboards were it is more difficult for me to select an alternative source of the sought after content. The current price is free and the advertising minimal due to the intense competition of the internet where a competitor is always only a few clicks away.

People can of course stop a twitter bystander with an @reply or include advertising in a message stream and some do but they do so at the penalty of loosing some of their existing followers. It's the competition for followers that is limiting the inclusion of advertising into peoples message stream. Twitter could present advertising on their web site and have to a small extent done so but most readers are using tools such as Tweetdeck and the tool publishers are competing for users so are going to minimize the extent of advertising on their own account.

The balance of power would allow for some advertising but never to the extent that was possible in other channels such as in print or television. Hopefully they can create greater mind share by focusing their energies on producing meaningful conversational content as part of a gift economy to enrich their brand.

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Corporate ads or?
I personally believe the 'free' web services towards ad revenue will sizzle and is not a concept that will hold much longer. I can only take as example myself and every single friend I know. Not a single one of us ever sign-up to buy anything from free web services. I've used yahoo for years. Have I ever paid a single cent for any of their offered 'features'? Nope. Once its free I don't want to pay. Have I ever followed a link or paid for a single feature in Facebook? Nope. I intentionally avoid it for the simple fact that once my psychology has become used to free, I certainly will avoid to pay. Have I bought anything, or paid for subscriptions in newspaper sites? Nope. In fact, that newspapers are free online has stopped me buying them altogether and most people I meet do the same. I swore two years ago that the free web-service for ad revenue would fizzle. Just recently newspapers claim they have enormous losses from having their news free on the web. Some have started charging, but that will take time to build up because people just redirect somewhere else to get their news. No newspaper is that good today that you "just gotta" have their news!

The more ads I get drowned in on the internet, the less I am interested to look at them. I, in fact, don't respond to any ads whatsoever. A few years ago I did react and respond, but nowadays there are too much of them and I therefore don't bother with any of them. Everyone I know ignores ads. Because my entire circle of friends have this opinion, I cannot but think that millions of other people also go along these lines.
I also think that tweets are another overrated application that will eventually fizzle. The only ones on tweets are the people trying to market to a consumer - but consumers don't give a hoot about Twitter! No one really cares about the useless two liners tweet offers so is the actual target audience met or not? Worthless! To try and save themselves before they die with a crash, they should allow people to post longer sentences instead of their useless one liners.

What's your feedback on this?

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Freemium is a difficult trick though for most it is more plausible than advertising. There needs to be enough value both at the free and incrementally at the premium level to be a business. Charging initially is a tough sell. Free evaluation periods is another option.

Many of the free tools do fizzle out. Think about the URL shortners. You need a huge reach and some barrier to competition (Maybe due to community size or cost of providing the content) to sustain advertising. Another alternative model is to be sufficiently useful that some bigger brand wants to maintain you to improve its brand karma (Like many of the free Google products which have primarily a marketing and technical moral function)

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