Twitter Advertising Online and the Twitter Economy
by Editor, Web Wise Business (14 September 2009)
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Twitter seems to finally be moving towards a strategy to monetise its massive online success. The company made amendments to it's terms of use recently to potentially allow advertisers to reach its 45 million regular users.
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Founded two years ago now, it is only relatively recently that the company's popularity has exploded, reaching 44.5 million unique users worldwide in June this year. Previously, Twitter's founders have chosen to hold off on efforts to monetise the huge amount of traffic the site receives, instead focusing on growth and user experience so as not to alienate account holders.
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However, following frantic speculation over whether the company would be bought over by Google earlier this year, and then a failed $500 million acquisition attempt by Facebook this summer, it seems that the company is finally attempting to put into action some method of making money back out of the roughly $50 million already put into development of Twitter.
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The traditional and time honoured method of generating money from a website is through on-site display advertising revenues. Yet as with many forms of advertising, this seems to be gradually in decline as advertisers are increasingly under pressure to provide a greater ROI, and significantly more measurable results from their budget spend.
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For advertising on Twitter, there are a number of speculated approaches, ranging from ad's on users' home page's and alongside search results, to appearing in user tweet streams. Twitter, however, are remaining tight lipped on quite how advertising will be delivered, with the changes to the terms of use simply stating
"services may include advertisements, which may be targeted to the content or information on the services, queries made through the services, or other information. The types and extent of advertising by Twitter on the services are subject to change."Â
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What is known, is that Twitter will introduce paid-for accounts for businesses which want to use the service to boost theirÂ
online marketing by advertising and create
online brand presence. Quite how likely many businesses, already using the site to monitor and respond to comments on their brand or product/service type, are to begin paying for the ability to advertise on the site remains to be seen.
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Twitter co-founder Biz Stone announced recently that one of the new features might include an analytics dashboard to help companies monitor tweets about their business. This is not a new ability however, as there are a number of third party applications available which allow companies to create alerts etc, to monitor tweets about their business, products or services, many of which are freely available.
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In fact, a report published in June suggested that Twitter has prompted the rise of a micro-economy based around the service, with $23.4 million already having gone to 11 (solely) Twitter-based start up companies, concerned with developing applications for the service, from venture capital firms and angel investors.
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The report goes on to predict that, should the growth and zeitgeist around Twitter continue unabated, it would be no surprise to see the amount of money flowing to new-start companies based around developing applications for Twitter to also grow dramatically.
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The real question though is, can Twitter remain popular for long enough to leverage it's potential value from advertising, or will it miss out to the "next big thing" before achieving it's full potential?
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