The below is primarily composed from my social media column on Search Engine Watch from earlier this year, but it is still one of the top question I get everyday. Hence, I thought it an appropriate post for today – also the response to the book launch of Socialnomics has been overwhelming (in a good way!) so I’ve been responding to all the positive feedback (thanks to all).
How can Twitter make money? That’s the billion-dollar question. This question is important for Twitter, as well as its users and global advertisers.
With traditional advertising proving less effective, marketers need new outlets like Twitter and Facebook to help create interest and demand. Here are some ways Twitter can make money.
1. Answer a Person’s Product Need
We all search in Google, Yahoo, and Bing because we’re looking for something. How do the search engines make money? They make money from sponsored listings when people click on them.
A similar revenue stream could be Twitter’s. Simply ask a question, such as, “Where can I buy the foam things for my iPod headphones?” If a user tweets this, they could get answers from their “followers” — in other words, real people (think organic results). Or, if they opted in, they would receive information direct from foam ear bud cover suppliers (think sponsored listings).
Now, the key for this to work, just like in search, is the relevancy. A good first step would be a simple “thumbs up” or “thumbs down” relevancy button for the supplier tweets. This puts the onus not to spam back on the advertiser, similar to Google’s quality score.
You can see why Google is possibly interested in acquiring Twitter, and also why Google launched Google SearchWiki, which allows users to rate search results and comment on them. Google understands that social media is their most daunting of competition.
2. Be a Recruiting Tool for Job Seekers/Recruiters
Just like Craigslist or LinkedIn Twitter could have employers pay a small fee to easily tweet their jobs. The user would select which titles and occupations they want to receive tweets for.
3. White Label Twitter Functionality for Fortune 500 Companies
Fortune 500 companies don’t understand the Web, but think they do. These companies believe they need micro-blog functionality to keep up with the “Web 2.0 times.” Don’t believe big companies do this? American Airlines and Lufthansa unsuccessfully tried to build their own social networks.
Or going back to the ’90s, remember when every company wanted to build out their own portal? AT&T thought everyone would make their My AT&T page instead of MyYahoo. A company called MyWay (part of Diller’s IAC) made some serious bucks off these portal wannabes. However, I feel companies are now more open to tapping into best of breed, so this may not be as lucrative. They could do something like Yammer though, that is more for internal chatter and connectivity and charge a small license fee per user as a result of the more robust privacy/security needed.
4. Analytics Packages for Companies
Break down the conversations occurring within Twitter into digestible data. The categories can be as simple as: Bad Review, Good Review, Product Question, Top Complaints, etc. The challenge here is that a third party may come along and offer this service for free (e.g., Google Analytics).
5. Local Coupon Pushes
This is probably the most obvious. Someone can simply ask for restaurant specials nearby and be pushed digital coupons.
Due to these tough financial times, visits to coupon related sites were up 33 percent, according to comScore. Cellfire ran a test with retail grocery client Kroger and saw mobile coupon redemption as high as 20 percent.
The time is right for this on Twitter. Other researcher (looking for the source I jotted this down from) indicated that 16 percent of all buyers wouldn’t make a purchase these days without some form of coupon or incentive.
6. Micro-payments for Answers to Questions
Willing to pay 75 cents for the best answer to: “Trying to register my Mac & iTunes so I can rent a movie, but I can’t figure out where to do this on the iTunes Menu – please help!”? Some people certainly are willing to pay 75 cents to assuage a major pain point. Twitter would take a cut of the 75 cents and give the majority to the person answering the question. The beauty here is that the Twitternation does the work and Twitter takes the “pass-thru” cut. Heck, the students at Auburn can probably answer the majority of these questions. If you ever need an answer to something you can call the Auburn Hotline at 334-844-4244. This has often ended many a drunken debate.
7. Analytics Packages for Individuals, Small Business
Just as it’s helpful for big businesses, it would be very useful for journalists, reporters, authors, etc., to be able to easily get a sense of what the public likes and dislikes about their work.
8. Quickly Find Sources for Reporters/Bloggers
Writers on a deadline can pay a subscription to easily be connected to the proper professionals to answer questions germane to their story or post. Professionals would register with the service to make themselves available for the free publicity.
9. Capture Revenue from Wireless Carriers
It’s in the carriers’ best interest to have many text messages flying across their networks. The wireless carriers (Verizon, AT&T, T-Mobile, etc.) could offer a $5 all-you-can-tweet (has a nice ring to it, no pun intended) monthly package.
10. Premium Service
If you launch a version with paid advertising, then you can launch a premium service that scrubs all the ads — say $4 per month for an advertising-free Twitter. Or the ability to send 3 direct messages to anyone (similar to LinkedIn’s premium package).
Item 10 may be counter-intuitive. The key (and challenge) to all of these ideas: they need to be incorporated into the Twitter experience and enhance it rather than being interruptive detriments. If this isn’t done properly, then the Twitternation will definitely let you know in seconds, and that’s the beauty of it.
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nice topic….but do u ever try that?
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Good blog! I truly love how it is simple on my eyes and the data are well written. I am wondering how I might be notified when a new post has been made. I’ve subscribed to your feed which must do the trick! Have a great day!
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Pam:
Thanks for the kind words! See you at the book signing!
I would pay Twitter $24/YR to let me put my affiliate and adsense ads on my Regular Twitter page.
Phyllis: Great suggestion!
Great list! I think I heard it through the grapevine that Twitter is planning to launch a Premium service within the next year? We will have to wait and see. Should be interesting.
A great list, but I’ve yet to see anyone put these to use as a long term money making strategy. In the end I think if you wanted to monetize all of these then I would start with a blog and use twitter to push. Twitter remains a largely useless tool in my opinion.
Great and interesting post Erik!
Most of the time these kinds of lists have forced parts in them, but this seems rather valid and realistic.
All great ideas. I still think that for long-lead sales, Twitter can be used to, say, schedule car test drives and other product trials.
#11, perhaps?
You’ve come up with more good ideas than what I wrote about back in January in the post I’ve linked to this comment. I especially like the micro-payments for answers concept.
Creating pages for specific content the way StumbleUpon does it is still a great idea Twitter and other Social Networking sites should be doing now. It is precisely how Google makes money with AdWords and benefits both businesses and consumers.
Can you give and example of what you meanin number 8? Excellent post, I am trying to wrap my brain around where I can subscribe to reletvant data based on what I blog about, number 8 suggests there are services like that? Any examples would be much appreciated.
Bart: Thanks for the feedback. This is idea is more pointed toward sources (as in people) rather than data. Think along the lines of Peter Shankman’s Help A Reporter Out (HARO) daily e-mail (which I love by the way). If you don’t know about it, you should check it out.
You raise a great point that I should add however to #8, one that is along the lines of finding that piece of data needed for a story. Essentially, being able to crowd source to the Twitternation rather than doing search upon search for the data nugget. In the near term good sources are Tech Crunchies and Yahoo! Answers.
I hope this helps. Thanks for the feeback and if you read the book I’d love to know your thoughts!
Funny, I use my followers to get answers to my questions all the time! Two examples: #1 I needed to know how to say “Robot Wine” in French (long story) and within seconds I had 10 answers. I used the answer that came back most often. #2 I needed a logo produced and asked if anyone knew anyone. Sure enough in about 5 minutes I had several to choose from. We have been working with the guy we picked ever since! I think this only works if you have enough followers…I have about 26000 so that doesn’t hurt! @chrisbonno
Erik – great blog! I just ordered your book as well.
Charge for certain HashTags
Craig:
Love it – similar to URLS…great call! Let the legal land grab begin.