The Evolution of Twitter’s Business Model
For years Twitter has boasted its uniqueness as a non-advertising site. As a pioneer social network with soaring popularity, a proper business model is still unclear for either the founder or the e-commercial specialists. However, they have to find the way of keeping steady income to cope with its innovation and expansion costs.
Advertising? Subscribing? These two words are refused by Twitter. That’s why it has gained overwhelming popularity and most trust by customers who are willing to express more of their thoughts and interest frequently on the site. But sadly, as discussed by emarketing experts and journalists, the new strategy delivered by the founders still couldn’t avoid these two golden principles to make money. What they try to achieve is to make these methods less intrusive and more resilient. That is to say, to apply advertising and subscribing in a hidden and healthy way.
Advertising
Similar to google adwords, Twitter chooses to drive traffic to their promoted tweets. When you are seeking particular groups with common interest, the recommended accounts will appear on top of the list. The founder claimed that the promoted tweets will only appear at Twitter’s search engine developed by a third-party applicant, which is said to be even more robust and up-to-date than Google and Bing in some aspects.
Also, in order to put users at the first place, Twitter is innovating a measurement tool called ’resonance’, which analyses viewed times and replied frequency of these promoted account, and the number of customers who add it to their favorites. It will choose to continue recommending or stop advertising for the company according to its popularity. The strategy shows signs of democracy and putting users at the heart of the value, while it is still at the risk of putting down the twitter fans who went for its ads-free feature.
Subscription
Twitter keeps the promise of free to its individual users, but turns to cover their investment from business dealers. It has created successful sales platform, official form and in-time service information centre for firms like Dell, which has generated $6.5 million sales in a year on the Twitter presence . Provided with such an ideal, multi-functional and interactive sales environment, few companies could deny to pay certain charge for this brilliant opportunity for business.
Moreover, there are certain premium accounts exclusively for business use. Corporates are willing to pay to verify the authority of their accounts (twitter 101), to establish their formal business platform on twitter, or to claim their unique rights to reach the exact targets in this “real-time social interest graph”[1].
There’s nothing wrong with seeking returns for further development, while on the gradual step forward, the traditional business model such as advertising would inevitably interfere Twitter’s well-established brand image as a least commercial social network. Also, with more business entering the sites, how to balance between providing demographic information to the corporates and protecting user privacy is another big issue for Twitter. Any improper trying could lead to the devaluated brand equity or less trust among their fans.
References: [1] IDG. Twitter gives the lowdown on new business model.
[2] David L. Smith. Twitter’s business Model.
