Musing on Twitter monetization strategies…

Posted by bkloss | Business Models | Sunday 8 February 2009 6:25 am
The last few years have proved this bird can fly .  But can Twitter
dodge arrows?  Only time will tell.

I’ve been on Twitter for a few years now but it’s never managed to capture my full attention.  What has been taking up my attention is reading the seemingly never ending stream of recent posts where everyone knows the  best way to monetize Twitter .  One idea that’s been bandied about is the potential to leverage their mass amount of personal data as a monetization strategy through targeted adserving or third party partnerships. Yes, sites like Twitter and Facebook probably have more data about us than our own mothers but their ability to turn this data into dollars is hampered by three factors:

Privacy Concerns – Would you still use Twitter if they were directly providing your tweets to advertisers? The answer for me is maybe; since the micro blogs are public at present.  Be that as it may, Twitter is a darling in the public eye, so there would be some serious negative press associated with any such move.

A lack of tools – Textual data mining, more specifically semantic analysis, has quite a ways to go before it can be used to successfully understand our thoughts and feelings at mass scale. Look no further than the difference in meaning between the phrase ‘I love this weather!’ uttered by a sarcastic Seattle resident on a rainy day and the same words stated by a Mountain View resident when it’s sunny and in the mid 70s.

Visitor goals – Contrast Google’s Adwords model to Facebooks targeted advertising. Facebook has the most targeted adserving platform in the world, yet last time I checked, they are still operating in the red. Not like it matters because VCs seem to offer such companies ridiculous evaluations as I’m sure twitter recently enjoyed. Still, people do not login to Facebook to buy or research products- context is key! That’s the distinction between their site and the search engines that have enjoyed such robust advertising revenues.

I’m not going to offer my thoughts on potential ways for Twitter to monetize because it seems like everything’s been said and hey- isn’t that Kevin Thau’s job .  If you want to call me a negative Nancy for just being critical, I guess I’m guilty as charged.  For the time being, I think it’s OK that Twitter is on a cash burn.  They should be focused on building a sustainable infrastructure that can grow with their traffic instead of trying to squeeze a buck out of its new loyal fanbase.  Once the halo dust settles, Twitter can get down to business on converting their audience into dollars.

Google struck gold with AdwordsKeep but still flounders to make money off youtube.  On that note, I’ll coin the adage ‘an eyeball does not a dollar make’.  Speaking of eyeballs, keep one or two on the success of Facebook Connect for future directions of social media revenue models.  That could be the goose that lays 2.0′s golden egg.

2 Comments »

  1. Comment by Jeff Baas — February 9, 2009 @ 7:45 pm

    I think that the problem with most attempts to monetize social media is when businesses try to monetize it on a technical basis with data mining and agorithms to make it possible serve targeted ads to people who are looking for nothing more than a social outlet.

    Where I see businesses succeeding with social media is when they approach it on a social basis, building relationships with potential customers and gaining credibility as businesses that will treat them like a person instead of as a data source to target.

  2. Comment by bkloss — February 10, 2009 @ 6:19 am

    I couldn’t agree more Jeff.

    That’s the gist of what I was trying to convey with the Facebook example. The Book is trying to facilitate B2C relationships by deploying company pages but there’s not enough depth. If Facebook users could easily recommend these businesses to their network, there’d be real user benefit. Imagine if I could query my network for the best Mexican taco stand within 5 miles. Businesses would gladly pay a fee for such high converting referral traffic.

    Now that’s functionality I could sink my teeth into.

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