Twitter has finally admitted to a portion of its monetization plan with the introduction of “sponsored definitions.” [See screen capture] Their look and feel are quite similar to the sponsored results we’ve grown accustomed to from Google. (Could there be a future partnership involving Google handling the ad space while Twitter takes the cash?)
The first definition to appear as part of the sidebar redesign described Twitter as a noun and gave a brief definition. Soon other definitions followed. We Follow, Threadless, and Tweet My Gaming are among the links currently “defined” just below the number discussed so often on Twitter: The follower count.
Twitter is finally advertising.
Where do you think this is headed? Will text links in the sidebar attract enough attention to give Twitter any sort of substantial income? What about 3rd party users? (Most hardcore twitterers use systems like Tweetdeck, Seesmic Desktop, or any number of mobile applications.)
It seems unlikely that Twitter would create much revenue from just a few text links on the service’s web interface.
Perhaps this is the start of sponsored Tweets? I know I’d be willing to pay for my “stream” to run clear of ads. Would you?
Update: (10:25am EST, 6/24) Parisian Thierry de Baillon just pointed me to the Japanese language version of Twitter. According to Baillon, the image ad block was a part of the initial release!
You can see for yourself by visiting the account settings of your Twitter account and changing the language preference to Japanese. (Don’t worry about finding your way back to the English version. The layout is identical.
Does this change your initial thoughts on Twitter publishing ads in the sidebar? Once again, 3rd party system users won’t see these ads either. I think in-stream ads/premium services are the way to go. You?
It would really depend on how invasive the ads are and how much it costs to remove them. At this point in time, I don't have “authority” — my stream is more like a trickle. As and when my authority increases (assuming that the only way to go is up, and that's not necessarily the case), then I would have to look seriously at making sure my audience's experience is as positive as it can be. Of course, one could argue that the audience deserves priority regardless. To which I'd have to reply, “Yeah, you're right. But try explaining that to She Who Hath Control Over the Purse Strings.”
I'd never dare try explain such a foreign concept to one with so much power. =)
For now, it's just text links in the sidebar. Next? Perhaps you get a few targeted links in your stream. I'd prefer that over much of the spam that floats around now. If they bumped up their spam filtering I'd have no problem with a few sponsored tweets. At least Twitter would declare theirs as such!
Thanks N!
Real ad dollars come from big brands and big brands want to see digital advertising tied to relevance. This is a first step for Twitter but it is play…who actually views their stream on twitter.com?
Yes, I would wager that twitter will introduce instream target advertising that is tied to relevance. It is a logical step and can be passed through to whatever client or webapp you use to consumer your stream, and done so without passing revenue to those client or webapps.
Do I hear Freemium?
Lots of people! More than half the people I follow use Twitter.com as their primary method of tweeting. We're not all Tweetdeck addicts. =)
I think you could do a Freemium in addition to the advertising. Say you can pay to use Twitter without any ads in your stream or bump your fees up quite a bit for different API limits and better search tools. That might work.
@bali_chris suggested selling linkspace in sidebars so people could pay to have more than one link.
Lots of interesting ideas.
Twitter, like the 800lb gorilla that it is…will do whatever it wants. =)
I wonder whether, if twitter starts to include sponsored tweets, another similar service, but better planned will take its place. No matter how big the gorilla is, if it steps in quicksand a mouse can run over it
Top ‘o the Mornin’ to ya Seth,
I don’t think that the current “definition†advertising is so bad. After all, how else would I know that Exec*Tweets is the best app for tracking where your boss goes on those two-hour “lunches  I mean, tracking the top business execs on Twitter. (Ah, a different type of “tracking,†gotcha)
But it probably won’t be enough to produce any decent cash flow for Twitter, unless they can show potential advertisers that the Twitter site would produce enough page views – and your point that most serious Twitter-heads use a third-part app is well taken. (And you can’t stop third-party apps from accessing Twitter at this point, can you?)
It might be better for Twitter if they ended up selling to another company. (I hear Apple might still be interested, or maybe Microsoft could buy it and somehow merge it with their interest in Facebook)
As for paying for your Tweet-stream to run without, this might be how Twitter introduces all of us to “Twitter Pro†accounts, pay a few bucks a month (no more than $10 or so) to have an account without random advertising Tweets. Another question I have is what does this lead to next? Will Twitter eventually charge for changing your page background away from a pre-approved design? Twitter is a great communications tool, but will people stick with it if you have to start paying to use it?
(What can I say? These are the questions that kept me out of all the good universities.)
I just listened to Steve Rubel say that twitter is peaking! I'm not sure that I agree that it is peaking yet, but do believe that it may soon. This is not to say that it dies after it peaks just that things slow and would loose it's revenue generating steam.
Personally I think those who are the most frequent long term users are really the influencers and the masses aren't yet adopting it as part of there everyday digital lives.
It is a mainly a broadcast and discovery platform that inspires spontaneous conversation. While I love it, I am not the average consumer. I wonder if the average consumer will embrace the real social interactive possibilities that Twitter creates or will they spend their time as voyeurs peering into friends lives on Facebook?
There is always somebody willing to stand up at a conference and say that some new platform is peaking, has peaked, will peak, or is an immense failure. Rubel's smart…I'm not sure he's right. Things that involve people and communication are rarely predictable beyond very basic levels.
Spoken like a frequent long-term user! =)
Twitter is flexible enough that people are using it for different means. Kawasaki uses it to blanket Twitter with Alltop links, Kirstie Alley uses it to publish evidence of a broken caps-lock key, and I know many people who simply use it to chat up friends across the globe. Twitter is what you make of it.
Facebook is an entirely different kettle of harpies. =)
Haha! Nicely said!
Adjix and Magpie both tried and failed to monetize via sponsored tweets. I think an in-house method or partnership of some kind will eventually be used. Twitter has the comfortable position of being able to block other services if it deems necessary.
Interesting times ahead, for sure!
Thanks Mike!
I think the answer lies in a combination of in-stream ads, premium options, and commercial services.
Everybody is interested in Twitter. That doesn't mean they'll pony up the cash on-demand though.
If the background were interactive with working links…that might happen.
As it is, sponsored definitions are just a glimpse into the future of what Twitter is doing to make itself a viable business.
(No comment on university admissions)
=)
Thanks Benson!
A long-term monetization strategy for Twitter can only be focused on their service, which is their API. The API is the actual product since it's the only thing Twitter actually controls. Their website is only a hub, allowing users to get in contact with the service. Sooner or later they will expand the twitter API limited to premium accounts.
I definitely don't think they will push it so far as to run sponsored tweets in YOUR OWN profile. That would just be ridiculous, and many people I'm sure would switch services – because they're are plenty.
Hopefully these ads will stay somewhat hidden – I'm hoping Twitter doesn't “push it” with the placement of ads in annoying places. Let's keep them minimal, okay?
Rubel also said that Posterous is the hub that everyone should use for their digital content. Like Seth says, he's smart but is he right? Why would anyone that has a self-hosted blog want to use a service like Posterous as the hub?
Don't get me wrong, I like Posterous but I prefer it as a blogging-lite hub (more than Twitter, less than a blog) as opposed to a serious meeting point.
I find that Twitter is one of the best ways for me personally to communicate with people in a social network. I would be more than willing to pay to keep my Twitter stream ad free. If Twitter goes with low set rate of say $5 a month to a max of $10 I would be in. Now, I do use Tweetdeck simply because of the power I get from it for sorting out the stream to stay focused on certain areas. I see how my stream could get clogged with ads if they go that route.
I've used every app for desktop and iPhone and I always come back to Twitter.com for ease of use.
Indeed I would be willing to support Twitter with an annual fee for usage free of advertising. Twitter provides huge value. That needs to be supported.
When you consider the myriad software and other shareware type tools we support with small fees ($19.95) something of the magnitude of Twitter is a no-brainer for me.
Ads in the stream will be either hated or ignored. Ads on the side, including the current sidebar definitions are not interesting enough to bother with clicking. I clicked one once and discovered that it was an ad and now I avoid it. I see how much traffic Twitter brings to my site and I would not be ready to pay twitter when I am the one generating the traffic and not Twitter. If I do not tweet I do not see traffic. Perhaps I am missing the point of the value of branding and just getting my brand in peoples head but there is already a cost of my time.
In any case it will be interesting to see how Twitter moves forward. Thanks for the post.
Silly people with their Posterous and Tumblr affection. I'm a big fan of people coming to my site…not asking them to view my content on somebody else's space!
Want a place for chirps and mini posts? Set up a subdomain and keep it where you have control over the ad space, etc. More than Twitter, less than a blog? Put it on your subdomain.
ie. bytheway.dannybrown.me or something similar. Set up p2 with facebook connect and Twitter log-in and you're rolling golden.
Of course, that might not fit the bill for some. A thought to consider though.
Same here. I like the speed and the control I have over the design. (I'm a big fan of whitespace, obviously)
Thanks Boom!
Haha, check out the update on the Japanese Language version. Not very hidden at all. =)
Sub-domain, huh? I thought that's where bloggers went to eat foot-longs, but I'll look into it. Cheers, good sir
I'm hearing the same thing from a lot of people. They'd be willing to pay a fee to avoid the ads and continue using Twitter as usual.
Perhaps there's a lesson to be learned from the concept of “Offer service for free. Allow users to pay to avoid changes to service.” People tend to not like change. Now we can charge them to resist it! =)
I think they've avoided charging for two reasons.
1. You scare away a percentage of users by having any cost associated with a new platform. (This also makes the whole “business model” an issue because you have to gain users faster than you burn through cash to make a go of things.)
2. As soon as a price tag is associated with a service, people begin to really hunker down and figure out the value provided to them for the money they're paying. This can start a lot of awkward conversations.
So as long as they keep pulling new users, (many of which are simply squatting on usernames) they'll continue to bring in funding and we get to wait and see what happens!
Thanks Alexander!
Would you be willing to pay a monthly fee to avoid the ads and continue driving traffic to your site with Twitter?
I don't think in-stream ads would be ignored as much as sidebar placards. Perhaps if they make the sidebar ads gaudy enough people will start volunteering to pay them away!
Definitely interesting to watch. Thanks for reading!
Would you be willing to pay a monthly fee to avoid the ads and continue driving traffic to your site with Twitter?
I don't think in-stream ads would be ignored as much as sidebar placards. Perhaps if they make the sidebar ads gaudy enough people will start volunteering to pay them away!
Definitely interesting to watch. Thanks for reading!
Wow. I just wrote an article about sponsored conversations and here is Twitter offering sponsoring definitions. What's the difference, I wonder?
What Twitter is proposing is an incredibly fascinating issue to ponder. Where can it go from here, and will The Tweeple like it?
The “tweeple” as you call them…will adapt and move forward as they always have. =)
You're right – that's not hidden at all! In-stream ads? Are you crazy? Come on – I'd want them to put ads anywhere they want – but NOT in everyone's own stream.
I think it's ridiculous to charge people to keep THEIR OWN UPDATES free from spam. That's not cool with me. I love Twitter, but the second they start doing that, we'll instantly become enemies.
Whew – that's my rant of the week!
You can run Tumblr on a subdomain as well. Not as easy to figure out adspace with the Tumblr themes though.
http://desertisland.sethsimonds.com is where I've started putting random stuff that simply doesn't belong here. =)
You have so much heart, Matt! =)
As far as I'm concerned, if Twitter is able to streamline their anti-spam efforts, a few sponsored tweets in my stream won't bother me one bit.
Glad you got the rant out. I'm usually through my weekly one by about 2am on a Monday morning. I'm ranty though. =)
I think there are a few ways twitter can start making money without annoying their user base but that would deliver more value to advertisers. Firstly paid search results – as long as they limited it 2 or 3 “sponsored tweets” at the top of any search result, secondly premium accounts based on following counts or API access or tweets per day (this may have the fringe benefit of cutting down tweet spam, mass following etc) and thirdly monetizing their data.
I hope twitter does start to make some money soon as it would a real loss to a lot of us if it died.
After pondering the pricing for a while, I believe Twitter should go a route similar to Fark.com. Fark only charges $5 a month while offering the minimal upfront “teaser”. Fark still makes a good amount of money using this business model, perhaps Twitter could come up with something like 5 free tweets a day and a pay per tweet after that if you did not want to do the $X per month. Whatever Twitter does to get money, it should be a very basic
cost structure.
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