Good News, T. Rowe Price! Twitter Users Really, Really Love Ads.
by Peter Kafka
Posted on September 24, 2009 at 12:38 PM PT
So now that Twitter has its $1 billion valuation (and another $100 million in cash, not the $50 million that I’d previously heard), how is the revenue-free company going to start making money?
The perennial, and obvious, solution is to incorporate ads into the service, but so far Twitter hasn’t tried it, except for very limited experiments.
The good news for Twitter and its investors is that the service’s user base is pretty receptive to advertising, in general terms, because it’s pretty receptive to just about everything on the Web.
So says research group Interpret LLC, which has a new study out today, conveniently enough. From the release:
Twitter users are twice as likely to review or rate products online (24% vs. 12%), visit company profiles (20% vs. 11%) and click on advertisements or sponsors (20% vs.9%) as those who only belong to traditional social networking websites like Facebook and MySpace. The data suggests that Twitter users uniquely demonstrate higher engagement with brands, not just with “tweets” they post.
These statistics are self-reported, and Interpret doesn’t say how big a sample its survey used, so take them with as much salt as you like. But they seem intuitively and directionally correct: Anyone willing to plug into the waves of information that Twitter pumps out is likely engaged all over the Web.
Note what the Interpret report doesn’t say: That Twitter users are eager to have ads inserted into the service itself.
Doesn’t matter. At some point, they’re unlikely to have a choice about that because it seems hard to imagine that Twitter can ever deliver on its investors’ sky-high expectations without generating some kind of money, somehow, from Madison avenue.
Which is exactly why Biz Stone and crew, who once made a point of expressing their derision for ads, now make a point of saying that ads may not be such a terrible thing, after all.
Comments
I think it’s ture, actally now there’re already a lot of ads in the statues, if I talk about some products, like iphone or some movie, I even hope the the owner company join in and tell more. Also, sometimes I found there’re some hash tags or words that I never met before, in such case, just curious, I might check more related statuses, include ads stuff
Posted by Andrew Zhang at September 25th, 2009 at 4:10 amAs a twitter user (@SciHound) the thought of ads appearing fills me with horror.
Am I the only one?
I have set up a poll to test this question out.
Do you want ads on twitter?
Vote now: http://twtpoll.com/7iqix0
Posted by Sarah Lawton at September 25th, 2009 at 10:40 amI don’t agree with Twitter as an Ad Server. As a listening source for Brands to hear what is being said and to engage yes. But I have done a Twitter Study. The average Tweeter sends about 6 Tweets per day. So if you follow just 50 Tweeters that is 300 per day! How will a brand get an ad through via twitter? They won’t. There is way too much clutter. Even if Twitter serves the ad automatically on the first page people will be too busy looking for tweets from friends to really care about a tweet from Coke or McDonalds. And since we see Advertising 24/7 everywhere all the time why would we need it via social media? Point of Sale always wins anyway and no one wants that location based service that exposes you to any business who can see you hijacking your phone with offers.
As for the research I agree Tweeters probably are more likely to talk about brands and products. But then if they send tweets and these get lost among the massive amount of tweets even good positive information is drowned out. I log in and I view the first 20 and that is it. I post and good bye.
Twitter should charge a monthly fee for their service and that will bring in so much more money than ad based services. It is great technology for people connecting with people. And remember also the huge uproar from Bush’s NSA Eavesdropping. People want privacy. If people feel brands are listening in just to target and serve ads people will find a different network to use. And trust me in a few years they will be on a different network. It always happens in technology.
Posted by Howie Goldfarb at September 25th, 2009 at 12:32 pm