Wednesday 3 March 2010

Twitter's ad plans bold but boring


It is no surprise that Twitter is considering to introduce advertising into its service. But why has it adopted the traditional model of advertising - an umbrella model affecting all of its half a million users?
In 2009, just three years since its launch, Twitter was valued at $1bn (£630m). Even before it had made any substantial revenue strategy, it was close to securing $100m funding from a consortium of investors. We knew advertising plans would soon follow.
The micro-blogging site has started addressing the issues that stopped it from accessing advertising revenue which is derived out of data on its site. The company's tweet said it is developing its own tools to provide features on the site that are currently provided by third party desktop clients.
Third party services include features such as geolocations- crucial to advertising and is now offered by service providers such as Tweetdeck, Seesmic Desktop and Echofon .
Twitter has decided to go down the Google way of displaying ads with its search results and not by incorporating them into actual feeds. This means for instance if you do a search on laptops, it would feature Sony or Dell deals ads. The adverts will follow general Twitter principle of 140 characters.
What is surprising is its choice of traditional advertising model. Before securing funding, in May last year, the site said banner advertising was not of interest. Later on, it said it was open to advertising.
While, it is a relief to know that the actual feeds would be free of ads as of now, it is likely that its investors could put further pressure on the site to generate more revenue through banners, user feed-based ads and even meaning-based behaviour-targeted ads. What worked for Google may not work for Twitter- people used Google primarily for search hence, its advertising on search was spot on.
It could have subjected advertising to specific product enquiry tweets. It could have accessed revenue from large businesses by allowing them to post their updates- for instance a Lufthansa tweet that a London-Frankfurt flight is delayed. Followers get their information and Lufthansa communicates effectively but pays a price. Or even a product inquiry tweet by a user asking whether Virgin is better or Sky? There can be a million ways rather than going down the Google lane.
The beauty of Twitter was its neutrality and the ability to post data real time using mobile devices. The popularity and use of the site was so overwhelming that the US has allowed army troops to use the feature and it is now used by corporations and businesses for corporate communications, e-learning through social web and even raising help for natural disasters.
Move towards traditional advertising may have come a bit too soon even before the service is fully explored and exploited. Some enterprises and sensitive groups are likely to back out while it is mulling advertising plans and Twitter for information's sake would be a thing of past.
-Archana Venkatraman
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