The twitter has launched ‘promoted tweets’ in a bid to create a business model for itself. The service will eventually lead to appearance of branded messages in the user’s feeds from companies like Starbucks and Virgin. This event has marked the first official money-making strategy of the website.
Technology analyst firm, Ovum, has valued Twitter at approximately one billion dollars. So far, twitter does not have any business model to earn profit through traditional advertising. This has calmed the industry analysts who were apprehensive about how twitter intends to earn money and capitalize on its growing popularity.
During the launch, co-founder of Twitter, Biz Stone, said, “Ordinary tweets that businesses and organizations want to highlight to a wider group of users”. Stone further added, “Twitter ranks as one of the most popular sites on the internet. Over the years, we’ve resisted introducing a traditional web advertising model because we wanted to optimize for value before profit. The open exchange of information creates opportunities for individuals, organizations, and businesses alike. We recognized value in this exchange and planned to amplify it in a meaningful and relevant manner. We hope you’ll share in our enthusiasm as today we unveil a simple service we’re calling ‘Promoted Tweets’. It’s non-traditional, it’s easy, and it makes a ton of sense for Twitter.”
Initially, the tweets will appear during searches performed at theTwitter.com search result’s pages. This is synonymous to the advertising model used by Google. In the second phase, these tweets will be expanded beyond the search realm and promotional tweets relevant to the user will appear clearly in user’s timelines.
Among the first brands who will post branded tweets will be Best Buy, Sony Pictures, Red Bull, Bravo, Virgin America and Starbucks. The response to these tweets is eagerly awaited by the masses as it will decide the fate of this model. On the other hand, Twitter officials are proposing that ‘promoted tweets’ should ‘resonate according to user’. This means the message will disappear if users do not relate to the message by tweeting back or replying to it.
So far, Industry has shown mixed response. General Manager of Forward3D, Martin McNulty, said,”Brands need to act with caution and guard against the inevitable hype surrounding this release. Why do consumers engage with twitter? Do they login when they’re in buying mode or do they do so in complaining mode? From experience, I’d say the latter. ” “Many brands have used Twitter as customer service tool responding directly to customer problems to good effect; however as a sales tool I’m less sure of its value. If a consumer is in a buying mode they’ll start their journey on a search engine which more than likely will already be pulling in tweets to ensure up to the minute comment, should it be needed.” People like Martin are apprehensive about sales potential of Twitter.
Eden Zoller, principal analyst at Ovum, however, has altogether different views. According to him,” Promoted tweets could irritate Twitter users. What Twitter does not have, and what it badly is needs, is a viable business model that will make it profitable. Twitter has great potential as a marketing and advertising channel with opportunities to create viral buzz around a product or service, encourage customer interaction, and respond more quickly to customers and issues.”
Before we proceed further, it will be inevitable to know what this is all about and how similar is it to the search engine optimization.
