This morning there was a post in BusinessWeek which discusses Twitter’s lacking monetization model and the possible ways the company could generate revenue. No matter which way you look at it, the most obvious way for Twitter to generate revenue is through some sort of advertising. Whether it’s banner advertising or in message advertising, advertising appears to be the quickest path to monetization.
So what type of advertising will be effective for Twitter? If you look at other social media destinations on the web, each service provides custom advertising solutions. For example, Facebook provides news feed advertisements (which typically have some sort of social relevance) that significantly contrast traditional banner advertisements. Meebo also provides an interesting solution and it’s one that I think Twitter should copy.
The advertisements are rich-media advertisements with the addition of user personalization. For example, Meebo’s advertising demo displays the Incredible Hulk advertisement. Users can easily switch their buddy icon to an Incredible Hulk branded icon as well as the site wallpaper. Users can also view video trailers and share those trailers with friends.
Meebo then reports back to the advertiser what sort of impact the advertisement had on conversations taking place across the service. Given that Twitter’s closest technology is chat, this form of advertising seems like a perfect solution. So far advertisers seem happy with Meebo’s offering so why wouldn’t they be happy with a similar offering on Twitter? They would!
The quickest path to monetization is to duplicate the monetization offerings of similar solutions. The only thing preventing Twitter from providing such a solution is the lack of a sales team. I’d be willing to bet that the company isn’t far from hiring one! Can you think of any other monetization solutions for Twitter?
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Ad sales are falling but here's one way to insure someone will buy the ads: Let it stay adult-friendly and allow profiles to be marked as mature. A new site called adulttwitter.com shows more than 100 profiles already exist of stars and marketing people in adult entertainment. Once the rest of the pornstars and webcam performers realize what a great tool it is for keeping their fans up to date via their mobile phones (posting to myspace, facebook and twitter, all with one txt msg), many more stars will sign up. Then they will be able to run porn ads on those profiles. Even with the economy in trouble, people will always be looking for porn.
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However, advertising is not the obvious business model. Today I posted at FastCompany (http://www.fastcompany.com/blog/david-mullings/...) that they have 3 better options:
(1) Offer Users Value-added Services - Worpress already does this and the model is easy to adapt. Their blog software is free but you can purchase add-ons. I am sure that Twitter can come up with value-added services users will want.
(2) Charge marketers/brands/advertisers to use Twitter - I pay a monthly fee to manage my email list through a provider (most programs charge per user or by the quantity of messages). Zappos uses Twitter, see Inc. magazine's Zappos Finds a Use for Twitter. Really!, and many other companies use Twitter to quickly communicate with their biggest fans. I even use Twitter for Realvibez, tweeting about new videos uploaded to the site, news and blog posts. I would gladly pay a fee to be able to get valuable insight information on my tweets - how many read and so forth - plus be able to use such a great communications channel.
(3) Focus groups - I have seen Twitter used for focus group research and would gladly pay
Twitter to manage such a focus group for me. I will provide the
question and the account to tweet a reply to, Twitter can choose who to
send it to based on profile information.
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