Twitter: No Money to be Made
Unless you are Twitter, that is.
I’m sure everyone knows – Twitter is a unique service that allows you to send one line messages to anyone who is following your “tweets.” Millions of people use the service, send friends, family, fans, stalkers, you name it… things about their life. Twitter is the next big thing, and according to the many companies that are trying to make money from developing services for it, it is a product that will make them money. If you believe that you can make money from sponsored tweets, selling twitter ad-ons, and other things, long term, then there is a bridge that I can sell you that leads to my backyard pool.
Twitter is not going to make anyone money, for the same reason that AIM has made no one money except for AOL:
1) Twitter owns the technology and the product – they at any time can change the terms and conditions, to require that people who use twitter cannot use any other service to tweet and then block out third party applications that connect to the service. Simply put, they can legally block out any applications they want from piggy backing on their service through technology, or a simple terms and conditions which prohibit this and thus possible civil and criminal actions for violating those terms. I don’t see Twitter allowing anyone to use any sort of mass advertising vehicle or technology, when they are either looking to monetize this long term or be sold to AOL/Yahoo/Google for $500 Million in the near future.
2) Sponsored Tweets sound great, but in reality no one will care long term. If people start using twitter to send out links, to promote products, people will just start ignoring those tweets. The idea that celebrities could send out tweets that endorse products, have some possibility short term, but doesn’t seem like a long term growth model for a business. A company like Chanel could in theory pay a celebrity to mention their new channel handbag, but they are more likely to go to the celebrity’s manager directly and just pay for the use of the handbag and the mentions. Brands and PR companies already have these connections and it makes no sense to go to a sponsored tweet company when their current relationships work just fine. On top of that, FTC rules for endorsements would quickly kill any business model.
3) There is no model, except direct advertising on the twitter pages that can fit a long term exponential growth model. Using twitter as a way to promote a product could create a few sales here and there, but there is no way to hit millions of people at one time to sell or promote a product, without the possibility of enormous backlash. Yes, there will be a few WOM agencies that will be smart enough to get people talking about a product in an organic model, but this is no more than an extension of the normal social networking, offline, online relationship of how people talk. If we start “spamming” twitter, people will start ignoring the message, and more importantly, Twitter will shut anyone down who is doing that.
No one is going to make real money from Twitter, period. Yes, some people will come back and tell me that they have 50,000 followers on twitter, and they drive people back and forth to posts on their blog, and it’s a great traffic generation tool for their blog. That is all good and dandy, but that isn’t a model for significant monetary growth for a product that can promote other products. Twitter is great for self-promotion, and will be great extension of any Word of Mouth tool – and can be used to keep companies in touch with their customers. I know I am going to get messages from people saying that they drove 150 people to their “Affiliate Marketing Money Making MAtch” DVD or VideoCast and they make $1500 in sales from that product. That is good and dandy, but I also can call text or call 50 people on my cell phone and tell them to do the same thing, so twitter is just an extension of our normal ability to communicate with other people, albeit a more efficient way.
I know that there are some people can make a living that way, but no serious, large company will ever develop from this mechanism. The people who are going to make the most money from Twitter in the short term are all those bloggers who are selling get-rich products on “How to Make Money from Twitter.”
Oh and yes, if you want to follow me on Twitter.
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8 Responses to “Twitter: No Money to be Made”
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(C) 2010 Pace Lattin. It is the policy of this blogger to not edit or remove any content and comments, unless it is specifically attacking a protected group or irrelevant to the conversation, such as a spam. These are the OPINIONS of the respective writers, posters, commentators. All DCMA Notices shoudl be sent to pace@pacelattin.com
Pace – I had to chuckle when I read your post this morning.
Over the last couple of weeks we had this conversation in our team about a variance on your theme.
I have had my twitter account for quite some time – but only more recently started to be more active. Over the course of a few weeks (and without using any of those "build a large audience and follow everybody tools") – my "follower" base grew from 30+ (close friends and people I know) to 600+. However, with all those "followers" and the people I follow (about 900 as of today) – the number of tweets rolling in grew exponentially. I quickly noticed that there was no way that I could read all of those tweets coming in – unless I wanted to quite my job and make this a full time occupation. So the question became:: "If somebody has thousands of followers, and follows thousands – isn’t everybody just shouting and nobody listening?"
We decided to conduct a little experiment: I posted a tweet raising the above question, and asked my "followers" to respond back @chiefmaverick if they read the tweet. Now given – I am not a twitter superstar – but the results were somewhat sobering. Only 4 people read my tweet and responded back – and 2 of those were people I know.
Which goes full circle to your post: How does anybody make money on twitter, if nobody actually listens/reads?
Hi Pace,
I couldn’t agree with you more although I am not the professional that you are.
Too many people think of twitter as a get rich quick scheme, and the "guru’s" lead you to believe that spamming thru all channels increases your chances of "weeding" out the few that are easily sold.
It’s not the worst way to make a quick buck but says nothing about repeat customers and building a credible business.
Maybe I don’t see things the same as most, but I get followers just because people are looking to be able to spread their get rich quick scheme instead of cultivating genuine networking relationships.
I think that, those who attend to building quality business relationships and use twitter to deliver those messages will benefit from their efforts.
Now that mobile technology has been made affordable to most markets, it only stands to reason that you would want to use that technology to reach your particular market more effectively , but accessing information instead of spamming should be your first priority.
Cheers!
Morning,
I guess the point of above was for discussion… as I do not share your view at all…
If I have access to 35k+ Doctors on twitter, how much do you think big pharma will pay to get to them, their reps are not allowed past the lobby door anymore.. When you just think of CPA.. yes your screwed on twitter… people do not go there to have shit hawked at them.. it’s content driven and thus a beautiful bed for fortune 5′s to play in for all kinds of purposes.. Brand monitoring, insanely defined targeting to exact key word, geo, profile, or combo of all three… (implement cpc, cpm only pricing)
Keep in mind its usage in efficiency.. My utility client can be elated as we implement real time outage routing.. your power goes out, no cable, no voip, no landline.. you have to use your cell. Rather then sit on hold for 25 mins, just send us a tweet with your zip. Utility company can match-back & load balance the outage requests electronically, saving millions in fixed CSR cost, and now give you a reason to lower your electric bill in a bad economy.. can you hear the music in background with people smiling.
We can gladly fly over your bridge in our plane, and wave out the window of innovation.
2cents… Microblogging (Twitter), Blogging and Social Network activity increase "MINDSHARE"… that is, general awareness. What is the value of this relationship?
What was the value of adding a mailroom, phone, fax machine, email or website to your small or large business? To discount the value of new forms of communication is to discount your ability to maintain many relationships.
Microblogging empowers business to release "specific messages". Which are search-able.
What if all new businesses will be Branded Media Corporations with a thousand distribution arms — which one would you cut off?
</soapbox>
peace-
seanrox
hello Beaudon
I think that you and Pace are sorta on the same page.
As twitter media is developed it only becomes a vehicle for big business, and I think that Pace is just trying to point out to all the small , inexperienced newbies just coming online , that there is a bigger reality, and, that thinking they can spend 23 dollars on some software and get rich tomorrow by getting twitter followers by spamming them is wrong.
At least that is the main message I got out of his post.
Hi Pace,
I agree that Twitter controls the platform and that they are ones best positioned to make the money, but there are opportunities for individuals and enterprises to develop audiences and, more importantly, "authority" that will provide monetization opportunities for them as well.
@Bettina, indeed the question of what tweets followers actually read is an essential one. "Real authorities" have a much higher "tweet read rate" than "average joes." Once you move beyond following 200 people or so, the only way to manage your twitstream is to use client software to filter what/whose tweets you really care about.
What I am interested in is BoaF matching of users based on contextual/semantic analysis of tweets and links (including RT’ed links). Anyone know of reliable authority rankings of tweeple?
Thanks,
Tom
Get rich very slow by adding value to twitter.
You’re missing the big picture on Twitter, which is word-of-mouth advertising, aka viral marketing.