September 18th, 2009 by Tim Greenhalgh
The debate on how Twitter will turn its phenomenal user-base success into hard cash is bubbling along nicely and last week it changed its terms to allow it to implement targeted advertising across the site.
Twitter is also planning to launch commercial accounts to entice business users to pay for premium services such as detailed analytics. That should go some way to explaining its current $1bn valuation but Gordon MacMillan is right to question the valuation, compared with revenues now and projected.
In the meantime a few pecuniary pioneers have been working the angles to find ways to make money with 140 characters.
The commercial imperative has, as we know well, attracted big brands to tweet with a marketing eye firmly fixed to the return on investment. Twitter has generated for Dell, at the last count, more than $3million on reburbs, scratch n dent, and upselling. All very good.
But what about the individuals who see a revenue stream flowing from their reputation and follows? It’s been growing over the past year and the ad network models are emerging to service the demand, along with redirects to user sites (ad fests), redirects to affiliate links, promotions, sponsored reviews etc.
On the ad network growth curve, companies such as Magpie, Twittad and adCause work in slightly different ways but deliver paid ads into the Twitterverse, via user accounts.
Magpie, based in UK and Germany, and adCause – a network with a charity twist - insert advertisements directly into your tweet stream. Twittad puts ads on your Twitter profile page. You will post your Twitter profile to the ad network sites and advertisers will bid on or purchase advertising space from you, with price and types set by you.
US-based Izea is a self-styled ‘world leader’ in sponsored conversations and the company has been building its revenue base on this marketing principle since 2006. Brands provide financial or material compensation to bloggers in exchange for posting social media content about a product, service or website on their blog. IZEA says it has promoted around 1 million sponsored conversations.
Top blogger Jeremy Shoemaker has been running sponsored tweets for more than a year, being paid $200-500 per tweet from large big brand advertisers like Blockbuster, Seaworld. An unnamed search engine paid him $280 per tweet for up to four tweets a day every 4 hours ($1120.00/day).
He also makes money arbitraging Twitter traffic by buying traffic from revtwit’s Twitter advertising network and sending it to Izea’s Social Spark Twitter advertising opportunities.
Another take on the revenue ramp-up comes from Happn.in (), which collects and aggregates popular phrases used on Twitter within 20 miles of major cities then sells them to advertisers for between $4-$10. The ten most popular phrases each hour are posted to the site, and are tweeted four times a day to the Happn.in Twitter account for each city. They have a following of around 210,000 people in 96 cities around the world.
There’s not enough space to cover every commercial play but interesting start-ups include US-based Social Cord that allows fans of bands, brands and writers to pay for and receive premium content via Twitter and SMS.
And let’s not forget the Twitter app revenue stream - Tweetdeck raised around $500,000 in investment while rival Twhirl was bought by video comment startup Seesmic and Twitter itself snapped up Summize to rebrand as Twitter Search.
I personally would not be comfortable with the ad network/sponsorship route – Twitter is a fragile eco-system and the reputation-trust badge is hard-won and easily lost. In the Twitter market democracy, the Unfollow button is never far from view. I like a bargain and don’t mind commercial Twitters (we help companies too!) but I’d be pressing the off switch on an account that pinged me ads or sponsored links – I like a conversation without the background noise of the cash register.
Tags: adCause, Gordon MacMillan, Happn.in, Izea, Jeremy Shoemaker, Magpie, Seesmic, Social Cord, tweetdeck, Twirl, Twittad., twitter, Twitter valuation
October 27th, 2009 at 10:32 pm
[...] A great example is from top blogger Jeremy Shoemaker, who has been running sponsored tweets for more than a year, being paid $200-500 per tweet from large big brand advertisers like Blockbuster, Seaworld. An unnamed search engine paid him $280 per tweet for up to four tweets a day every 4 hours ($1120.00/day). Source: Via Google Search. [...]