B2B Talk: Monetizing Twitter in the Rise of the Machines


Twitter is still under scrutiny when it comes to its monetization plans. The microblogging startup is still labeled as “non-profitable” by some media experts and financial analysts, while others, like Ron Conway see a lot of potential. Sure, Ron Conway has every reason to see potential; after all he is one of Twitter’s first investors. In a recent interview for The Wall Street Journal he identified ten possible monetization models for Twitter:

  1. Lead generation
  2. Coupons – “Probably a half-billion dollar opportunity,” Conway said.
  3. Analytics
  4. Customer relationship management for enterprises. One such company Conway recently invested in is coTweet.
  5. Payments via real-time Web – “A massive opportunity. If I was at PayPal today I’d be studying this sector.”
  6. Commerce
  7. User authentication – That is, verifying accounts.
  8. Syndication of new ads – ”Twitter itself could syndicate to the Twitter ecosystem and serve up ads. That’s a multibillion dollar industry.”
  9. Contextual and display ads
  10. Acquiring followers – “If Dell wants to acquire [Twitter] followers, it will pay for that,” Conway said.

It is pretty obvious that Twitter has a lot of potential, however, many of the ideas proposed by Conway are obviously preposterous, and will not work.

Lead generation is too general a term to be taken seriously. Lead generation is a time consuming yet essential business process that attempts to engage long-term clients through design, quality, placement of media messages, and etc – basically matching consumers with sellers. These matches cannot be bought – they are the result of a more in-depth marketing process than posting some messages on Twitter. Sure, Dell had a huge success using Twitter to generate leads – but the Dell brand was already standing as a trustworthy brand. Dell had an easy job, and its example does not necessarily apply for other (many) companies.

Coupons– again the Dell model, which was a definite success, of course makes sense. If Twitter were to promote special offers and special deals to its users, it could make a lot of money from its affiliates. As we know, Twitter is already considering this and commerce.

Analytics – a good idea, however unlikely to become part of Twitter’s monetization strategy. There are already companies offering different Twitter analytics free of charge: twitalyzer, twist, twitturly, tweetstats, etc., so where is the opportunity for Twitter?

Payments via real-time Web – a lot of privacy issues, hacking and other potential conflicts come to mind. If Twitter were to offer such a service I would certainly not consider it. PayPal is already subject of multiple phishing attempts. All banks have to deal with similar issues. I have serious doubts that PayPal will even consider Twitter as a potential business partner, and if it does, this will be a reason for many to cancel their accounts. In money matters there’s little room for tweeting around!

Commerce – again a general idea and hard to implement. I don’t think that the “tweeps” would like to be flooded with commerce tweets. Who would? However, The New York Times reports that Twitter plans to open a shopping portal on the site. E-commerce, including links to products and turnkey payment mechanisms will probably be one of the revenue streams for Twitter.

User authentication
– plausible. Interesting to see how many users will be ready to pay to have a “verified account” – but definitely not an unrealistic idea. So, if you do not pay, will Twitter allow identity theft. Perhaps impersonators? Twitter cannot make money from something already in their TOS. (4. You must not abuse, harass, threaten, impersonate or intimidate other Twitter users.)

Syndication of new ads
– good idea, hard to implement. How would Twitter serve these ads? In tweets? Then we face a similar issue like that for commerce. On site? Realistically, how many people tweet from Twitter? I think most of the tweeps use Twitter clients to tweet.

Contextual and display ads – why is this a different field I will never understand. There is only one way Twitter could possibly serve ads effectively – and that is via tweets. However, the company stated repeatedly that they will not serve ads. So this is out of the question.

Acquiring followers – now this is the cherry on top; the last straw! Conway either has no understanding of Twitter’s community and how this works, or he is really trying to initiate a dangerous new trend: pay to follow on Twitter. There are already programs that “automate” tweets and generate “followers” – of course these are spam bots that are easy to identify. But who would like to have paid followers on Twitter or anywhere else? We talk so much about ethics – from pay per post to pay per comment and pay per tweet there’s nothing these so called media gurus haven’t tried. While some techniques have their purpose, the idea of paying to get Twitter followers is the scariest of all. I will express my indignation fully another time. For now I only have one question: would you, as a respected business owner, pay for Twitter followers? If you are willing, what exactly would your expectations be from these followers?

Image courtesy Mashable (click on image to see original post)

Image courtesy Mashable (click on image to see original post)

Besides wondering how in the world Conway and the other founders got investors for Twitter in the first place, I am more than a little concerned about the future viability of the service. Even suggesting this “pay for followers” aspect has hazardous implications for everyone in social networking. There is a dangerous precedent that could be set here, that perhaps not many see. If companies are allowed to purchase the “impression” of followers even, then the viral effect of this “perceived” popularity would be built upon a lie. This is deception, at its core, the worst kind of PR there is. Conway suggesting this, is indicative of either negligence in business planning, or downright bad business practices.

I do not want to call names this time; I am in a generous mood. If the reader will think about this, without the rose colored glasses of admiration for Twitter, it is easy to see that there is no viable plan that is visible to the public. We may only see the true method behind the Twitter madness when their VC funding runs out, if there is one. Aside some super secret Matrix or Terminator setup where the machines take over, the whole setup looks like frivolity to this writer. You tell me, is there some greater method to this madness?

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