Can Twitter monetise itself? That’s the killer question…

Reports surfaced this week suggesting that Twitter is ready to introduce a new search-based advertising model. But is this really a suitable business model for a site that thrives around communication, and not necessarily engagement?

Joe Fernandez
Joe Fernandez

Twitter has become a major success since its launch in 2006, bringing millions into the blogosphere through its 140-character maximum micro-blogging system. The latest Comscore figures on the service reveal users now send 50 million “tweets” every day, up from 5,000 in 2007.

The company has admitted that following this success; it wants to monetise the site using an ad-funded model, similar to how Google operates. Indeed on its official blog, it has gone out of its way to refute claims that it “hated” advertising, even though it did not have any on its site.

Instead, they said that while banner advertising was not of interest, “to say we are philosophically opposed to any and all advertising is incorrect” and its own engineers have hinted that Twitter is launching a raft of new features that could rival the services offered by third-party applications.

But perhaps the core question here is will Twitter users actually want to see ads on a blogging site, or is it primarily a site for networking?

According to the Wall Street Journal’s AllThingsD blog, which broke the story, “ads will be tied to Twitter searches, in the same way that Google’s original ads were. So a search for, say, “laptop,” may generate an ad for Dell. The ads will only show up in search results, which means users who don’t search for something won’t see them in their regular Twitterstreams.”

This isn’t any more bothersome than the ads that are served up on business site LinkedIn, but compared to search engines where people are actually seeking a keyword, is this really a monetisable prospect?

Search agencies tell me there will be some takers, but the metrics will be incomparable to those on the search engines, where people are most responsive to these ads, because they happen to be related to what they were seeking in the first place.

They add, that even more curiously, the way Twitter decides to charge for search terms will be pivotal to brands signing up. If it focuses on a pay-per-click basis, then brands may not be so interested, but if it focuses on a cost-per-acquisition basis, the prospect becomes more appealing because the tweets around it could help complete a sale.

Meanwhile media agencies are trying to figure out how best to utilise this. They say it might not be as simple a sell as the likes of Facebook and See Saw, which this week sold out inventory for its first four months from launch.

The reason for this is because Twitter is designed for sharing and discussion, and the demand for advertisements is superseded by demand for online PR and reputation management.

Where Facebook makes every effort to offer full engagement (maybe not on its side-panel ads, but more on its fan pages, events and gift offerings), Twitter is a tool for communication and sharing thoughts.

Brands can use it to talk customers through a situation or throw obvious hints about a big event, sale or even discount code if they want to test out to see what the response rate is. Brands like Virgin Media use it very effectively to talk customers through service problems they might experience.

I myself use Twitter purely as a professional tool. As I’m not a huge fan of the idea of blogging, it’s the perfect tool for this magazine to talk to our audience and be part of the real-time news environment. We mustn’t forget how news breaks on Twitter first.

But that’s about it for Twitter. It’s the place to share news and gossip, so will ads work in this format? I’m not so sure,

Of course, all this is hypothetical and I await to hear the full explanation from Biz Stone and co about how this tool will really be used in the future. One thing’s for sure, there needs to be some changes to really make this another monetisable digital environment.

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