What Advertising Model On Twitter Will Really Make Money?

Twitter advertising has been a controversial topic for some time. Initially, people hated the idea of advertising by people they follow. The controversy initially started with IZEA and their SponsoredTweets as well as Magpie and Ad.ly. Mostly, people hated the idea, but there was no denying that popular Twitter users could make some significant money from these sponsored tweets.

Now, the twitter advertising market is heating up. Twitter launched their own advertising model called Promoted Tweets, basing it purely on searches and a small group of advertising partners. They are starting slow and are probably testing out the idea before releasing it to the general advertising public.

Another new entry that could be interesting is TweetUp. The best explanation of the service comes from GigaOm:

TweetUp aims to identify relevant tweets and tweeters based on popularity, engagement, interest and also paid bidding on keywords.

If this sounds familiar, it probably should. Take a look at the about page for TweetUp and you will find this little nugget:

These are the same folks who invented the model for paid internet search, the bid-based marketplace that enables some of the biggest companies on the Internet to thrive.

This strategy, very similar to the AdWords/AdSense combination, should be successful but it will be very dependent upon the execution of their strategy.

Another advertising/sponsor model that is not Twitter specific is MyLikes which just announced a solid round of seed funding. The MyLikes model is a little different as it pays on a cost-per-click basis and a widget is available for advertising on your blog. The model also takes into account your personal interests which is definitely a different direction than most of the other advertising models.

The last advertising application that was announced recently is AdAdmire. This is completely different from the other advertising models. TheNextWeb has a solid post about the launch and how it all works:

Once logged into to the Third Party Twitter application (e.g. managetwitter.com) AdAdmire analyses a Twitter account holder’s information (tweet content, location, etc), and makes intelligent recommendations to the user regarding Twitter accounts that would be of interest to follow.

This is really about user discovery and not as much about advertising, but they also have a third party application model that helps you build revenue:

AdAdmire is a new way of building revenue from these services. We connect interested advertisers with your authenticated users – directly making high value targeted connections. Our ads run in traditional ad sizes and only minimal configuration is necessary.

The real question is will all of these models work, or will only some of them be truly successful?

The pay per tweet idea will be successful, but you must be a popular user to really make enough money. This is not unlike the idea of AdSense on your blog. You will not really make any money until your blog gets enough traffic. So, as a user with a limited follow, say 1000 users, you will only make a dime or two for those sponsored tweets. Granted, the rates may differ between each site, but without the popularity the potential income is fairly limited.

Twitter is applying the Google search results model of advertising. Trying to find relevant advertising based on the search is definitely a good idea, but the problem here is traffic. Does Twitter search have enough traffic, or are many of the searches occurring in different applications? The biggest benefit to the search strategy is that advertisers would pay a hefty premium to be the single promoted tweet for a given keyword.

The AdAdmire and TweetUp models could be interesting, but I think we need to see more execution before proclaiming them to be successful models. TweetUp may have a better chance as they are starting with several widgets to help your site generate revenue. The impressive team also gives them an edge for now and will keep some attention on them as well.

The MyLikes model of social likes or even recommendations like Glue could be very powerful if they get enough traction. Glue does not have any readily available monetization, but I suspect they are planning on a similar model as MyLikes. The amount of personal interest information these sites gather is impressive, and social recommendations have not really been taken advantage of yet.

Overall, there are plenty of advertising and sponsored monetization models, but many different models are being explored. I am not a fan of the “sponsored tweet” as it feels a little forced and has very little potential for the normal Twitter user. Twitter could do well with its advertising, but that does not generate income for the users. If I had to make a bet on the best long term model, I would focus on social recommendations. Word of mouth is typically seen as the best recommendation a business can get. Combining that with everyone you connect with on social sites has the potential to generate a large amount of revenue for those companies as well as the users.

2 thoughts on “What Advertising Model On Twitter Will Really Make Money?

  1. Nice write up on the various models.

    Understanding user intent and having the right relevancy algorithms are essential to delivering good search results. If Twitter can manage to serve Promoted Tweets that succeed in those two dimensions, the program will be a big success. If not, they run the risk have having these Promoted Tweets be treated like somewhat-relevant banner ads.

    We’ve had a Featured Tweets program for a while. The key for us is having 1000s of ads, strong distribution partners, and knowing the searchers’ intent. Here’s what that looks like in practice – http://www.twitjobsearch.com/search?q=Project+Manager+in+London



  2. William

    First, thanks for the kind words.

    Understanding intent is extremely hard in a purely text based environment. Relevancy is easier, and has been shown to be highly successful with traditional search. So, Twitter will likely succeed in some manner, but it is then a question of how much success.

    Featured tweets, like the idea of twitjobsearch, can be useful from the application perspective. Relevance is very helpful in those situations as well.


Comments are closed.