The changes to Twitter's Terms of Service to allow it to show advertising should have come as no surprise. This POV looks at how the social phenomenon might be able to monetise its rapidly growing audience.

1. 11/9/2009
Searching For Revenue
Searching For Revenue
Twitter Allows Advertising

2. 11/9/2009
Searching For Revenue
Overview
On Thursday (September 10th, 2009) Twitter changed its terms of service to allow it to show
advertising to its rapidly expanding user-base. In many ways this shouldn’t come as a surprise,
despite Twitter’s previous announcements stating it didn’t wish to allow brands to advertise on the
site. What remains to be seen is how it will actually incorporate ads, if indeed it does.
Evaluation
The fact that Twitter may allow advertising shouldn’t come as any surprise, especially as it has
allowed advertising on its Japanese site since its launch in April 2008. However whilst the ads on
that site are similar to standard display formats, history suggests that Twitter may need to try
something different if it wishes to seriously monetise.
Some critics have suggested that the reason that other large social properties have failed to build
revenue streams in line with their audience size, is that users do not wish to be sold to when in
these environments. If you look for the standout success in terms of monetising online traffic, the
only name that really comes to mind is Google. By allowing brands to place ads in front of people
who are actively searching for the services the brands provide, Google has come to dominate the
digital marketplace. If Twitter wants to make a success of advertising, it may need to take a leaf out
of the search giant’s book.
Mindshare’s POV
Twitter is increasingly being used by users looking for up to the minute information, as the graph
below showing traffic to its search site shows.
At present its search simply ranks results based on chronology (most recent first): if it can learn to
rank results based on relevance, possibly by analysing its users social graphs and which items their
peers have found interesting, it then creates a space where brands might be able to see real results.
So if Twitter wants to make serious money from advertising, it may need to learn from Google’s
ability to rank content and its ability to monetise those results. That’s assuming of course that
Google doesn’t just buy Twitter first.
For More Information:
http://tinyurl.com/MStwitads1 & http://tinyurl.com/MStwitads3
Author: Ciarán Norris, Head of Social Marketing