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What Twitter's New Advertising Model Means to Small Business

Written by Brett H. Pojunis on . Posted in Social Media Marketing & Strategy

“Twitter is just a fad, Twitter is just a fad, Twitter is just a fad.” I keep telling myself this and not to sound like Tom Hanks in Big, but I don’t get it. Although Twitter has been widely accepted and embraced by celebrities and most major corporations, only a few companies have been able to attribute revenues as a direct result from it. As our business model is social media marketing, we encourage all companies to establish Twitter accounts and spend time developing them. No one will contest that a well-executed Twitter strategy can lead to brand exposure. Each company should have specific objectives in mind when formulating a game plan, i.e. driving traffic to a website, building out social media assets or drawing customers to a physical location.

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What This Means to Businesses

Until now, the only costs associated with being active on Twitter have been the time allocated by staff members to gain followers and sending out tweets. The return-on-investment (ROI) has been extremely straightforward and easy to calculate. Last week, Twitter introduced its new strategy to generate revenue by allowing companies to pay Twitter to have their messages appear before non-paid messages. Sponsored keywords are normal for search engines and other websites; however, I and many other people feel this could be detrimental to their business. One of the most appealing aspects of social media is that it levels the playing field for companies to compete. So companies that have allocated resources to build up a following can basically get lost in the sauce if they do not want to “pay to play”. The main concerns I have in regards to the sponsored messages are over the number of messages each user will receive, their relevance to the user, and what if someone has blocked the company trying to send out the ads? Here are some actual tweets that I found on The Huffington Post:

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This new program also means that businesses which have worked hard organically to secure specific keywords will now be brushed aside and the sponsored messages will dominate the categories. Image if Facebook was to do something as intrusive. You're doing a search for a profile of a woman named Sara and you get 1.2 million results. Under the advanced search, you narrow it down by location or school. But then, Sara Lee is in the first position because the company paid Facebook to show up. This would infuriate a lot of people, me being one of them.

 

Why Twitter is a Fad

 
If I am wrong about this, our team will never let me forget it! First off, I encourage everyone to view this video. This is an interview with Twitter’s CEO Evan Williams on May 27, 2009. I think he was appropriately drilled and asked questions filled with common sense. The interview's premise was to establish what Twitter’s “real” business model is or would ultimately morph into. I don’t think he was blatantly tap dancing around the issue; I really think they didn’t have a clue. You decide. Here is the video:

 

The 140-Character Achilles' Heel

Short messages. Once upon a time, emails were the equivalent of text messages and look how they have evolved. BlackBerry Messenger is a key example. It lets you share messages with unlimited characters, as well as send pictures, videos, etc. This is much more efficient than text messages and even emails. Twitter will decline as this technology advances.
No amazing technology. Twitter is a glorified notification system. Virtually every social media platform has the ability to communicate with its members through mobile notification.
However, I could be incredibly wrong about Twitter's impending fall from glory. It did raise
$100 million on a $1 billion valuation. In closing, we at New Media Plus will continue to promote Twitter and encourage our clients to do the same. I think the team Twitter has in place (mostly advisors) should be able to identify revenue streams more innovative than sponsored messages. That is provided they don't cut off their nose to spite their face by upsetting their users in the process. Best of luck, Twitter!

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Photo credits: Flickr, Huffington Post