Since its debut in 2006, Twitter has been free to use. As with so many other successful social networks, the strategy seems to have been to first attract a massive number of users, and then set to work figuring out how survive financially off of them.
After being conditioned over years to not pay a dime directly to the company, I don’t know that Twitter’s customers would have accepted a business plan that forced them to overtly pay for the service. Ads seem like a perfect fit, and we’re all so accustomed to trading our attention for free, or heavily subsidized services, that hardly any of us have complained.
Still, ads are obnoxious. They range from the merely obnoxious interruption of your personal timeline’s flow, graduate to the insidious obnoxiousness of ridiculous products you’re not interested in, and peak with the repulsive obnoxiousness of forcing the slogans of despised political candidates or other anathema concepts into your brain, by way of your ever-so valuable eyeballs.
What if Twitter adopted a business model that allowed them to maximize financial gain from advertising, while minimizing the obnoxious intrusion into the sanctity of your personal timeline? In fact, I think they could be on to just such a model.
On the latest episode of Core Intuition, Manton and I chatted about rumors that Twitter might soon be acquired by a larger company such as Salesforce, Google, or Disney. We agreed that each company would bring its own advantages, and threats, to the company. On the whole, though, we also agreed that Disney would be the best of the three with respect to maintaining the status quo.
Disney is a media company, through and through. Coincidentally, Twitter has aligned itself with media outlets over the years, offering high-profile integrations with major events ranging from awards shows, to sporting events, to political debates and beyond.
I suspect that as Twitter focuses more and more on these kinds of enhanced event-based Twitter streams, they will find that advertisers are keenly interested to pay a premium price for ads that target that same audience. Just as many companies will pay a massive amount of money to target the Super Bowl audience, they should expect to pay a significant markup to target the Twitter-based Super Bowl “moment.”
I’m optimistic that Twitter will recognize that the massive advertising potential of sponsored events leaves them free to leave boring, everyday social Twitter relatively, or completely ad-free. This approach would take will: it’s hard to say no to advertising dollars, and there will always be somebody willing to pay a few cents to pop and ad into Joe Public’s private Twitter feed. But selling out private timelines may be a poor investment, when Twitter could capitalize on the user trust and loyalty that will come from having their own “personal” spaces on the service treated with respect.
There are parallels in other media. For example, on television there are a few channels that are left unscathed by the blight of advertising. I don’t know whether it’s by force of Federal laws, local cable contracts, un-marketability, or some combination of the three, but for example you don’t see ads on local cable access stations or C-Span, do you? The cable industry chalks up these losses and nonetheless makes a healthy living selling ads on all the other stations that viewers inevitably opt in to watching, because they value the content.
I think Twitter’s users will continue to opt-in to their special events, because they value the content. And this self-selection is part of what makes the advertising opportunity so valuable. Finally, I don’t think users mind nearly so much when ads junk up the timeline of a public “moment,” because that content doesn’t feel, and isn’t meant to be personal. It’s mass media. We are used to advertising on our mass media, but tend to get really annoyed when it shows up on our personal chats and feeds.
Hopefully Twitter will recognize the opportunity they have to satisfy both their financial needs, and the wishes of their customers, by focusing their advertising where it really counts.