Everyone has an opinion of how Twitter will make money. It's a Silicon Valley parlor game to figure out how to monetize. As an avid user, I want Twitter to figure this out, but I don't want it to rush into anything. It turned down a $500 million deal from Facebook, so its founders clearly believe it's valuable. For a while, I've hoped it won't just slap ads into feeds. That could be disastrous. Instead, I favor a "freemium" model that mixes some advertising with subscriptions. The challenge for Twitter right now is growing its user base -- I've heard it anywhere between 2 million and 7 million -- and getting more companies like Comcast, Zappos and JetBlue to participate. This will happen, I'm sure of it. Like Battelle, I see Twitter approaching a critical point where it breaks into more mainstream use.
So what will a business model look like? First, brands will need to pay to establish trusted identities on Twitter. We're seeing examples of people setting up rogue accounts. No brand will put up with this. Once Twitter passes the 10-15 million mark, brands will want their identity there. Twitter should give them advanced tools for managing their presence on Twitter, letting them use it as a customer-relationship management tool and, yes, marketing vehicle. The first part is done through advanced analytics and data of what people are saying about brands, letting them engage with fans and detractors. The second part is trickier. My inclination is that these new social media things shouldn't necessarily be used for marketing. Tony Hsieh, CEO of Zappos, told me the other day he views Twitter as nothing more than a different version of the telephone. It's not media, it's a communication device. This rang true. Still, I think Twitter could introduce controlled marketing messages. They would need to be capped based on a person's Twitter usage. Someone with dozens of updates a day could stand to receive one or two targeted marketing messages per week. This is a small price to pay for a service like Twitter.
How to do it? Easy: take a page from Google. Twitter needs a marketing system that's targeted, conversational and automated. No mean feat. It is amassing a huge trove of conversational data. If -- and this is a big if -- it can use that data correctly, it could develop a marginally intrusive, highly effective marketing business. This hit me on Thursday evening. I Tweeted about a woman on the elevator talking about a friend in the "shopping concierge" business that helps fat cats from Dubai shop. A few minutes later I checked my "Replies" tab to find this message:
This was confusing. Then it hit me: what if Twitter allowed brands with established Twitter identities to reach out to people on a targeted basis with offers, links and brand messages. Here's how it would work. Last week, I posted this message: "realize i need to give in and get an iphone b/c i'm writing more about brand apps there." How intrusive would it be for Apple to have a reply message generated based on the conent telling me about iPhone deals and where to find one in New York?
Such a mixed system could work. I still think Twitter needs to charge brands -- and that includes people. Twitter is a major marketing vehicle for people like Jason Calacanis, Robert Scoble, even me. The service should remain free to most users, but the most active should pay in order to have a combined 1,000 followers/following. The other half of the business could easily be a combination of CRM/advertising. Social media doesn't work great for advertising. It's conversations after all. Brands butting into conversations is odd. There is a place, I think, for some advertising, so long as it is coupled with the essential customer-service element.
Recent Comments