Despite its huge user base, Twitter is having a difficult time nailing down how to monetize them. The site’s latest strategy was laid out by COO Dick Costolo during a keynote interview at the Mixx Conference in New York. Part of the problem, it appears, is that Twitter wants to move slowly with ad products to avoid alienating its users Costolo said. This resonates as the microblogging site held off on introducing monetization strategies at all until recently. However the attempts it has made have been lackluster at best, something the company tacitly acknowledged when Costolo said the company would be setting aside its EarlyBird offering for the time being.
Instead it will be focusing on a new product called Promoted Accounts, which will appear in searches based on a specific query. Promoted Accounts will pair brands with the users who are most likely to actually follow that particular brand. (via Vator News). Beyond that, Twitter is a bit hazy on its latest monetization plans. "It's still an experiment to figure out exactly how it works and we're working with [advertisers] closely to make it work well," said CEO Evan Williams in an interview. "But I think, from what people are telling us, they know that they need to be on Twitter because Twitter is where people are talking about what’s happening in the world." (via CNBC)
What Advertisers Want
While Twitter works out such details there are some basics that advertisers would like to know or have before they take a plunge with another experimental product.
More targeting options and better metrics to track the impact of their ad campaigns. This would help them determine whether Twitter users actually pay attention to the ads - or whether they would be better off just using the Twitter accounts to interact with users. "It is a totally new and different kind of ad format. There is a lot we still have to learn and think about," says Shiv Singh, head of digital for PepsiCo Beverages. (via the Wall Street Journal).
A better handle on who has the most value on Twitter. Sponsored Tweets is another advertising product, in which a celebrity tweets for a price. The site notoriously paid the celebrity Kim Kardashian $10,000 per tweet for mentioning certain products to her millions of listed followers. This sub category of word-of-mouth marketing, called sponsored conversations is expected to reach $56.8 million this year, according to PQ Media. But followers and fans clearly have different value depending on their influence - a subject that firms such as Sysomos are only just beginning to explore.
The firm recently looked at the authority rankings of five celebrities, five social media heavyweights and five media organizations - and focused on the kind of Twitter users who follow these people. It determined while celebrities have a large number of followers, most of them are low authority users. Traditional media sources that deliver a variety of content such as Time.com and The New York Times appear to attract more people who are only using Twitter for information.
Some metrics from the early adopters from a third party source. PepsiCo never followed up with a paid campaign after serving as an early adopter of Twitter's first ad products. Other companies that were first out of the gate gave rave reviews - but little has been heard since. There may be a reason for that, writes eConsultancy: "It's worth considering that no marketer taking a leap of faith on a new advertising platform is going to come out two months later slamming it. After all, few marketers want to look dumb and most media buyers, like most of us, prefer to remain employed. Given this, I think it's wise to take anything marketers say about a new advertising platform they're using with a grain of salt."