Twitter Is The Next Paid Search Venue

by Nuno on March 7, 2009

twitter-paid-searchThere has been a good deal of buzz this week about whether or not Twitter’s search feature is a threat to Google.  The answer: yes.

Twitter’s search feature is no threat to Google when it comes to informational searches.  People looking for information on the “perricone diet” (#2 “Hot Trend” today on Google Trends) are not going to use Twitter search for that information.

But informational searches aren’t where Google makes it’s living.  Google makes money from charging advertisers to display tiny text ads on commercial searches.

Take me as an example.  I’m the cofounder of a furniture store.  Of course, I advertise on Google Adwords.  But, like all other forms of advertising, I cast a wide net, cross my fingers and hope to catch something.

Advertising on Twitter will be much more targeted.  This morning, I woke up and did a Twitter search for “buy furniture.”  Had I performed that search on Google, more than likely, I’d be looking to purchase furniture.  On Twitter, I’m looking for people interested in buying furniture.

As I type this, the top result is @phooz: “This means I’ll have to look for a place, decide where I want to live, and have to buy furniture and stuff. Ikea anyone?”

Right now, it would be free for me to reply to @phooz and tell him: “Hey, before you check out Ikea, here’s a 15% discount to shop at nikkoSHOPS.com.”

How can Twitter monetize this?  Before it can do so, Twitter has to first allow DM (direct messages) from people who you do not follow, something which they currently do not allow.  (Currently, you can reply to someone you don’t follow but there is no guarantee that that person will read it.) Second, they have to charge for those DM’s.

Of course, this could quickly get out of control.  Twitter users would obviously have to opt in to this feature.  I’d be motivated to opt in if my mention of “buy furniture” prompted a coupon from a vendor.

Another issue is would users want to be barraged by 15-20 advertisers with DMs?  One way to stop this would be to make these DMs expensive.  Whereas I may bid $1 for the term “furniture” on Google AdWords, I’d have to bid ten or twenty times that for a Twitter lead, which would be much more likely to convert.

Why would a Twitter lead be much more likely to convert?  Because, I as an advertiser, would prequalify that lead before bidding.  I’d visit that Twitter profile, browse previous tweets to try to determine age, income and so on, all the metrics we marketers love to stare at.

Of course, there would be those advertisers that would have a bot that would automatically bid and respond.  Not only would would that result in high costs and a very poor ROI (a bot can’t prequalify a lead**) but Twitter could institute its own version of Google’s quality score, blocking advertisers based on poor CTR, message relevance and even Twitter community votes.

For those wondering if Twitter will ever monetize on all of those eyeballs, wonder no more.

**Side Note: If I could code, I’d be developing the tool that could prequalify Twitter leads based on the sentiment of the twit and the demographic of the user.

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Viewing 8 Comments

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    I didn't know that before. Thanks for sharing this news.
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    Hate to be a buzz kill, but I believe Twitter's pretty much at the top of it's S Curve and is pretty much becoming nothing more than one big spam channel...
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    Does anyone believe this is STILL a threat? Frank Secured Loans
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    I am apparently four months late to this conversation, but I never let bad timing interfere with a good idea.

    I think your side note is more important to your post than you may be letting on. To my mind, this prequalifying you've claimed you'd do on Twitter (if only they'd allow you to direct message non-following folks) is something you could already do on your own. I mean, how many people tweet without some other major online presence? If you'd really be willing to spend the time prequalifying these folks on Twitter, then I'd bet you'd also be willing to Google them and find either their direct email address, their blog (with commenting open!), or other useful contact information. And, so, you would contact them there. I imagine you're perhaps not entirely genuine when you suggest that you'd spend real time prequalifying customers...perhaps you just know, as per your side note, that it'd be something that would come along with Twitter's acceptance of commercial contact-- specifically that Twitter would offer some program where they offer screened and directed advertising the way Google Ads does.

    Which is not to deny that you have a very good idea--I think you do. If I hear you correctly, what you're saying (writing) is that we should be able to reach the folks who want our products and services by sincerely approaching them based on their openly and specifically expressed desires. I agree wholeheartedly! That is the very best kind of marketing.

    Unfortunately, I don't imagine Twitter would get it any better than Google. And while I sometimes admire Google's program (both the computational and the social), I often am disgusted with their inability to accurately target ads. Recently, for an admittedly personal example, the wildly popular and often-vociferously-liberal site WOOT unknowingly encouraged all of their New York wooters to vote against allowing gay marriage...because of an ill-placed set of Google ads. It took only a few of us customers alerting WOOT by email and on their blog (and about ten hours of the disgustingness) before WOOT had Google quit those ads. Needless to say, in the interim there were incensed customers and the possibility of bad publicity. Of course, ultimately, few of us canceled our WOOT accounts during the comparatively short offense*, and WOOT didn't cancel their Google Ads account either.

    But I think you get my point. If we're aiming to find our existing customers-- those folks that already want us and just don't know we exist, or that we're available to them specifically-- we need to find a better method than Google Ads or your hypothetical Twitter outreach. I guess what I'm posting (lengthily) about is my undying support for your desire to reach the customers who are most likely to be interested in your awesome furniture, and my belief that algorithms, patterns, and shortcuts will never get it right. Person to person to person is the best way, and technology may hasten, smooth, or otherwise aid that chain, but it will never replace it.


    *One friend of mine did cancel his WOOT account because of their openly anti-gay position. And though WOOT pulled the ads and never would have "chosen" for them to appear in the first place, I don't blame him one bit.


    (Also, not just incidentally, with the advent of Retailmenot, Dealnews and the like, I haven't signed up for a coupon-based feed in years. Unless you're talking a limited-distribution mailing list [my favorite unsigned band or a small retail store without a real website] I don't imagine other folks are significantly more interested than I am in a coupon offer email. Especially your ostensibly higher-end customers [holy cow, your furniture looks good!]. We can probably get that discount info on another site, or better yet from your own website. Yes: there! Otherwise, you're missing customers! [How do we get them now?!])

    So...when's the next discussion?
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    Really great insight. As a twitter user I would appreciate getting relevant coupons from time to time, but it may get over redundant. If twitter wanted to control that/and or monetize it they could always charge users $1/month to not get any more DM from advertisers.

    Even though it doesn't seem like much, if you scale that across the millions of users twitter has they'll pull in serious revenue.

    Great post
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    Hey David,

    Thanks a lot for your response. Much appreciated.

    I don't think that Twitter users mind being marketed to much. If you're following any significant number of people, chances are you don't read more than 25% of their tweets. Although for this to work the twad (I know, that's a horrible combination of tweet and ad but I couldn't help myself) would have to appear as a brand new Twitter message for maximum visibility, the user can do what he or she does with any other message, choose to ignore.

    I totally agree, however, that if not policed, this could get out of control and be detrimental to the user experience. That's why it would probably be necessary to price spammers out of the model.

    Thanks again for your response. Good luck with your blog.
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    I can't see it working.

    For one thing there are alternative social networking sites that don't allow ads so people will convert to them to avoid the marketing barrage.

    Also, people are not stupid, I don't have a twitter account but I would consider setting one up if I could get discounts and things, but I wouldn't use it, I would just enter a list of keywords of my interests so that I could attract the attention of the relevant bots and reap the benefits.
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    Hey Loki,

    Thanks for your feedback. There are many social networking sites but Twitter right now has no competition. And if done correctly, I'm confident that Twitter users wouldn't mind being advertised to with targeted messages, in the same way Google users don't complain about the ads since they can use a great service (search) for free.

    As far as setting up a fake account to just get discounts, by definition the plan I outlined would only work if you were active. You'd have to actually use the service in order to get offers. In any case, even if you just entered a list of keywords, I'm sure advertisers wouldn't mind. That would be the equivalent of going to a retailer's website and entering your email address to receive offers from them.

    In any case, your second point led to a thought: This would be much more effective if the pay structure was based on the number of followers you had. For example, if you only had one or two followers, I'd pay 25 cents for the click. If you had 5K followers, on the other hand, I'd be willing to pay much more based on the possibility that you'd repost the offer on Twitter to your followers.

    Thanks for your feedback.
 

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