Making Money From Twitter

• March 22, 2012
• #twitter
• #profit
• #advertising
• #pro

Twitter are gradually rolling out ‘promoted tweets’ to apps now. Cue users being unhappy that a service previously unencumbered by ads is now selling you things you have no interest in. Your Twitter stream’s a personal thing, you don’t want it ruined by the odd advert popping up. That’s perfectly understandable.

I feel slightly differently. I don’t particularly want to see ads in my stream either, but what I do want to see is Twitter having a business model that’s sustainable for the foreseeable future. Luckily, Twitter doesn’t need to make as much money as Facebook, since it has a considerably smaller staff, but on the other hand it has nowhere near the number of users (especially regular users) and many of those users don’t use the web interface as their main means for interacting with the service.

Most of the supposedly ‘free’ services we use right now (especially Google and Facebook) get money out of you by selling your personal information to advertisers and anyone else who asks. As the now-common saying goes, if you’re not paying for a service, you’re the product being sold.

So, Twitter has some options in front of it of ways it can make money¹:

1. It can sell ads
2. It can sell personal data & search
3. It can charge users to use its service
4. It can do some combination of the above

As far as I can tell, Twitter’s going for a combination of 1 and 2, and it’ll be interesting to see how that works out. Users already seem annoyed by the relatively innocuous adverts it’s testing out. They’re unlikely to be happy with this programme developing.

The most annoyed users of all will be shouting vociferously for the third option. “If you’re going to sell ads, why not allow a paid-for version” these people say², “I love Twitter and I’d be happy to pay to avoid being advertised at”. I’d like to explain why I think Twitter aren’t going to offer this option any time soon, indeed, I’d like to argue why I think they shouldn’t.

If you’re a keen user of Twitter, you might be happy to pay, but the fact is that the vast majority of users won’t. If you run an ad-free service where a tiny minority of users pay, those users pay to support the rest of the customers. To some degree, the paid users are being ripped off. They might be perfectly happy with that, and that’s fine. Indeed, to some extent they’re paying for the other users because it’s those users that make the service better, and that’s part of the deal, but broadly, they’re getting a service that doesn’t cost much money extraordinarily expensively.

Of course, to pay for the free users, you can sell ads against them. This seems ideal, since it means that free users pay their way (through advertising) and paid users get the benefits of the extra feature of a service without advertising, whilst still paying their way. Everyone’s happy, right?

Well, no. The people that aren’t happy are the advertisers. In this model, on the one hand Twitter has to go to advertisers and tell them how great their service is to advertise on. Users will happily click on their ads and turn in to joyous, returning customers. At the same time, Twitter have to go to their users and say “you hate these ads, right? Here’s how you can pay to have them turned off.” If I was an advertiser, there’s no way I’d want to advertise on a network where my advert was used as a downside of the free service, as a stick to beat people into paying for Twitter PRO³. For this very reason, I’m constantly surprised that Spotify gets any advertisers at all⁴.

So Twitter has to make a starker decision. Do they choose the paid/free model, and thus have to think of what Twitter PRO would consist of - what are the services that people would pay for? How much would they pay for them? Do you sell corporate accounts? How much should they be? These are difficult questions, and it puts Twitter in the place of trying to make back the money that people have invested in the company by creating a two-tier service. The fact that you think you’re happy to pay for it is not all that important. The question is how much would you be willing pay? Finding that price-point is extremely difficult. Do you love Twitter enough to pay $25 per month? $100 a year? Your price might be simple to pin down, but is everyone else’s?

Or, do they chose the route they’ve gone for, and try out some means of advertising. To me, that seems like a simpler option. It removes the need for a two- (or three- or four-) tier Twitter, keeps the majority of users using the service (apart from those so disgusted by advertising that they leave, but, well, we’ll see) and keeps Twitter going for a few more years. I’m happy with that.

Update

Robert Brook has done a rather brilliant audio response to this post entitled ‘plankton’. I’m not sure there’s anything in there I’d disagree with. Also, if you’re not signed up to Robert’s newsletter, then you’re a crazy fool.

Also, Steve Lawson has suggested a Twitter app with no ads. I agree this is the best ad-avoiding option, and it’s a variant I hadn’t considered. Although I think that it still suffers from some of the problems outlined above, I reckon it’d be an easier sell to advertisers.

Why I Like Twitter’s New Retweet Function

• December 3, 2009
• #twitter
• #retweet
• #social media

I’m beginning to wonder whether I’m the only person who likes Twitter’s new(ish) retweet function. Twitter is strewn with people whinging about it. Some of their points have a firm foundation (especially for those who liked to comment on the tweets of others), but no-one seems to have noted any of the positive features of the new function. So I thought I’d run through them here.

1. You can turn just retweets off for boring retweeters

There are tweeters out there who create interesting new content in their twitter stream, but spend most of their time retweeting dull tweets from others. Twitter now allows you to turn just the retweets off from these people, whilst keeping their original content. This is particularly useful for those who have just discovered @big_ben_clock and retweet it each hour.

2. You don’t need to worry about the character limit

It used to be annoying that you’d see a tweet you’d like to share, but it was already 140 characters long. Now, this doesn’t need to worry you, since when you retweet it, the whole tweet is retained. Also this means that if you’re aiming for your tweet to get wider coverage, you don’t need to make it 130 or fewer characters to fit in the ‘RT @username’ characters at the beginning.

3. You know that the tweets have come from the original tweeter

Sometimes, you’d see a retweet and it wouldn’t look right. When you checked, you’d see that the original tweet’s message had been changed by the retweeter adding a comment to the end, or even editing the text of the tweet itself. Unless you checked back, you’d have no idea what actually came from the original tweet, and what was from the retweeter. Now, when you see a tweet using the retweet function, you can be sure you’re looking at that tweet in its original glory. Yes, this means you can’t add your own teeny tiny comment at the end, but in my experience, these rarely added anything particularly useful.

4. You don’t have to see the same RT over and over again

When a tweet was popular, using the old retweeting method, you’d have to see it over and over again as each of your friends retweeted it. Now, if it’s been in your stream once, you don’t need to see it again. This might mean that you don’t get the full effect of all of your friends sharing the same opinion and retweeting the same thing, so you might miss being part of this week’s pitchfork-wielding mob, but it also stops your stream being clogged up with the same bit of information you already knew about and weren’t all that interested in in the first place.

5. You can still use the old version if you want to!

If you don’t like the new retweeting function, no-one’s making you use it. Yes, clients like Tweetdeck and Tweetie are incorporating it, but they’re providing a means where you still have the choice not to use it if you don’t want to. If you really want to show Twitter this function is of no use to you, don’t use it. Yes, you’ll still have to put up with other people using the feature, but if this ends up being so much of a problem for you, perhaps the feature’s more popular than you care to admit.