TheWayoftheWeb

Content and Digital Marketing Specialists

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Will the financial crisis force Twitter to monetise?

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Could the current financial situation force Twitter to start monetising microblogging with a newfound urgency?

Yes?

  • Within the $20 million in VC funding, there is bound to be an element feeling a little twitchy at the moment.
  • Would anyone buy a service for the valuations Twitter has had, without a working financial model?

No?

  • $20 million can go a long way, if you’re careful!
  • If Facebook founder Mark Zuckerburg is being honest that the social network is concentrating on growth over revenue for three more years, then as the pre-eminent microblogging site, Twitter could follow a similar plan. The only flaw is that Facebook is already making money, just not as much as it could!

These are some initial thoughts, so it would be great to hear some opinions and ideas! Personally I think that we may see some of the smaller microblogging sites, perhaps Plurk for example, need to find revenue generation before Twitter, simply due to the lack of funding reserves. Twitter has the advantage of being able to sit back, and perhaps see some of the experimentation take place before acting.

The Measures of Engagement meme (Convincing the disconnected)

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Another week, another meme! And it’s another one that not only has some real value, but it also bloody tricky to answer in a way that’s not rehashing the work of other intelligent people looking at social media. Dave Cushman started it off as Measures of Engagement – convincing the disconnected, and I think it’s important to keep the second part of the title in mind. As Cush says, if you’re blogging, tweeting, and building your own widgets already, you get it – but there are millions out there that don’t, and if you want companies etc to get involved in the right way, it’s down to us to show some leadership and go outside the comfort zone of the social media echo chamber.

I disagree slightly with Cush when he says those that get social media don’t require the numbers. Case in point – the Adage Power 150, Google analytics, Feedburner stats, Twitter follower counters and all the other things we adorn blogs with. The lack of yardsticks is one problem that currently affects social media usage within businesses, and it’s one of the reasons why I’m a keen supporter of MeasurementCamp‘s proactive focus on sharing case studies and numbers. It’s fine to quote Zappos and WillItBlend ad infinitum, (and I have), but the more relevant and close to your market you can find examples, the more useful it is in convincing the disconnected. And sometimes that’s the approach you need to take, because not every manager is just waiting for you to persuade them onto Twitter or Facebook.

So measurement is a given:

The next stage is to look at what the end result should be. Is it sales conversions or advertising clickthroughs? Are your conversion mechanisms on your website, or are they affiliated via widgets?

Either way, there are two things that work across traditional and new businesses – conversions and the numbers of them.

This is where the battle begins. Social media is an emerging and labour intensive skill. It’s unlikely to drive the same numbers as an SEO campaign, unless you’re really lucky/gaming the likes of Digg.

So what we need is to start tracing the steps of the engaged and the disengaged, and be able to compare the conversion rates – that’s pretty good evidence of the power of social media (If it works…humans have a horrible habit of doing the exact opposite of what you want, at the worst possible moments!).

And controversially, that begins with the traditional web analytics package, whether that’s Google, or a paid service like Webtrends.

That’s something that’s easy to forget in the rush to start driving traffic to the site, and worrying about sentiment. If you’re already using search traffic for relevant keywords to drive conversions, you’ve already got an effective way of getting large numbers of interested people.

So does social media make your boss money?

So you need to be able to show where social media efforts site between someone accidentally browsing round your site because they’re bored, and those coming because they want to buy something that minute. And where in the process social media can enhance the conversions for people arriving via search – is it product reviews, or a Q and A section, or customer service?

Why do we want users chatting?

And if you’re relying on click-throughs, you’ve got more impetus for social media. After all, if people are arriving for content rather than purchases, then it’s down to the content, and the strength of your brand and values to convince them that clicking on a third party will give them what they’re after. If I see a shoddy site, unrelated adverts, and no community or loyalty, then I’m going to distrust that banner stuck in the right hand column and leave for somewhere else before I can be tempted into clicking on anything. That’s where the ‘onsite engagement’ is important.

Isn’t a Facebook fan page a waste of time?

And then it’s onto ‘external engagement’. That’s the bit where you make yourselves available where ever an interested person might be, and do the utmost to serve their needs, in the hope they’ll get to know you and your brand and value it over your competitors. And the basis for this comes from the stats showing how social media efforts increase conversions, and clickthroughs from the first two.

So why bother with trying to get numbers?

If SEO is hugely effective for people finding stuff, and when they arrive they’re engaged and converted, then why bother with the outreach?

Firstly, depending on traffic levels, and the advertising model you use, a traffic boost from a social network (the second biggest source of traffic after search engines) can really drive a particular promotion or great piece of content. And if you can show engagement delivers a high percentage of conversions and a big traffic boost, then you’re really set.

Secondly, not everyone is using search any more. I can’t remember the last time I actively searched for a product review before making a purchase. I still read reviews, but I start by asking my network for people with relevant knowledge that I trust, and then follow their recommendations to extra content.

If you’re not getting recommended, you’re going to be paying more to get search traffic, and you’re not getting the recommendation traffic. Effectively you’re trying to run a marathon with your eyes shut and your fingers in your ears. It’s still possible to win, but it’s going to get pretty tough!

This is the bit where the new tools come in.

You can start monitoring terms via Google news alerts (And almost every social media person has a personal vanity search set-up I’ll wager!). That can get pretty time consuming pretty quickly, which is where buzz monitoring comes in, e.g. Radian6, Brandwatch, Onalytica, Nielsen etc (apologies for anyone I’ve missed). These tools provide various ways for aggregating and managing all the mentions of your brand across the internet. The one downside of having a variety of useful tools is that it prevents some of the useful comparisons – e.g. sentiment between brands using different programmes – but I’d expect the market to slowly coalesce as social media matures…

This is also where you hook into available APIs, and allow people to promote your content on the social aggregators.

And that’s about where I’ve got to!

(I should say in my defence, this has been a bit of a stream of conscious post due to upset babies, meowing cats and other distractions, so I’m really interested in as many comments as possible to help distill the right parts out of this..)

Now the more fun bit…tagging some people who will probably struggle less with this than I did at the start of my social media journey within a large media company.

If it’s measurement, then I have to tag Katie Paine, without any implied buzz monitoring favouritism I haven’t chatted to Giles for a while. I’ll also tag Ste Davies, Luke for a personal brand approach,  and Chris because he normally likes to get all argumentative.

Edit: I was going to tag benrmatthews but there was some blog address confusion, which has now been resolved…So he’s back on the list!

 

Interview with Blippr founders Jonathan C and Chris Heard

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Two websites are currently showing the way the microblogging format can be used outside of pure conversation. But although the pair even have similar names, they take totally different approaches. I’ve previously covered ‘Twitter radio’ Blip.fm, but somehow I’ve neglected to cover the other major twist on microblogging, Blippr.  (You can find me using it, here)

But what is interesting about the system is that it not only allows for 160 character reviews of entertainment (music, films, books, videogames), but the focus of the company behind it is concentrated more on the recommendation side of things than purely Twitter for reviews, which means they’re taking on some big names (Disclosure: It also means they play in a similar space to ditto.net, which I do some work with).

Blippr

What is Blippr in 140 char?

(Jonathan): A community of people looking to discuss, discover and organize books, games, movies and music. In 160 characters or less, of course.

Your company Tag Team Interactive has a focus on social relationships and recommendations – what inspired this philosophy?

(Jonathan): My business partner and I just know and see the value in personal recommendations–the ones you receive from your family, your close friends, even just acquaintances. There’s an explicit amount of trust that you extend those influences in your life and you don’t need to come to understand. Recommendations across other platforms, like Amazon or Netflix for example, take time to train and come to trust. There’s this sort of “black box” effect. You’re not sure exactly why the item they’re recommending is a fit for you. However, if your good friend said “You have to see Pineapple Express, it’s hilarious”, it doesn’t require the same amount of learned trust. You already know you can trust that person. It causes even that much more drive to go out and see that movie.

Your company website mentions Blippr is your second application, but what was the first? Was it related to Blippr, and did your previous applications and websites have a direct effect on how Blippr was created?

(Jonathan): Our first was Judge-O-Rama, a site focused on enabling people to resolve their conflicts and contests in a head-to-head context. We like to think of it as our “practice app.” It was just something fun and entertaining, not quite as useful or focused as blippr. Judge-O-Rama was definitely instrumental in our working together, though, and at least serving as the inspiration to us starting to work together. In terms of how this served in blippr’s creation, I think this blog post will give you a good idea of how blippr started.

Who do you see as your competitors? Does it include Blip.fm? What are the advantages of Blippr?

(Jonathan): We don’t view Blip.fm as a direct competitor, per se. They’re doing the micro-thing, but we’re not trying to create a me-too “Twitter for reviews” application. That’s the obvious connotation most people make, given the review constraints, but we’re far more focused on developing the social recommendation and organization pieces than we are a simple micro-review platform. As such, we view our competitors more along the lines of Flixster, GoodReads, LibraryThing, Shelfari, iLike, Trusted Opinion, and a few others. Obviously one of our key advantages is our focus on not just one particular entertainment categories–movies or books or music or games–but on all of the above (we also plan on adding TV in the future). Furthermore, I think if you look at most of those sites, while they have solid communities, we’ve tried to make the participation process as simple as possible to encourage more participation. Also, last but not least, I would say that our focus on integrating with as many platforms as possible is a big differentiator. You can connect your blippr account with Twitter, Plurk, Jaiku, Pownce, Identi.ca, Tumblr, Facebook, Last.fm, GoodReads, LibraryThing, Amazon, and others, which is obviously a great opportunity for our users’ opinions and reviews. Those are some of the high level advantages, at least.

Obviously you’re monetising the site through Amazon, but do you have any further plans to drive revenue you can disclose? With traffic growing, was it a conscious decision not to include display advertising?

(Jonathan): We would say that commerce through various sites will definitely be a large share of revenue, but we do intend on eventually displaying ads that are relevant to blipprs’ userbase, as well. Obviously, the primary intent there is to offer entertainment advertisers a place to capture people who truly are interested in entertainment media and looking to make a decision. But we very much aim to make it a value-add to users first, then advertisers. Jeremy Liew, of Lightspeed Venture Partners, wrote a great blog post a while back on the topic of endemic advertising, which I believe really showcases blippr’s revenue opportunity.

Blippr users can cross-publish to Facebook, Friendfeed, Twitter, Plurk, Jaiku and Pownce. Do your users tie into the audience figures for those sites, or has there been any surprises? And is that the main word of mouth that is driving new registrations?

(Jonathan): This is assuredly a large driver of how people are discovering blippr, but I wouldn’t say that’s the main word of mouth driving registrations. Email invites sent from users have also been a large driver. In terms of surprises, I wouldn’t say there have been too many. Most connections have been with Twitter and Facebook. The rest are pretty much equally spread.

Are there any of the cross-publishing sites which are easier or harder to integrate into?

(Jonathan) That would be a question for my co-founder and business partner, Chief Executive Geek, Chris Heald. Some have taken more time than others. Obviously Facebook takes far more time than any of the others due to building an application for the platform, which is much more than just a cross-publish opportunity. iPhone and OpenSocial integrations will be the next difficult pieces for us, but they are coming.

Does scaling prove as problematic for Blippr as it has done for Twitter? There seem to have been some timeouts recently when I’ve been using Blippr?

(Chris): I don’t think scaling is going to be anywhere near the problem for us that it has been for Twitter; our architecture and product design is a good deal different than Twitter’s, so we avoid many of the specific design issues that they’ve had problems scaling. We have had some timeouts lately, but those were due to some rather exceptional circumstances, and a lack of hardware to fail over gracefully to (in those cases, the problems weren’t scaling issues so much as our primary app server going down without a graceful failover – that’s since been corrected). We’re still getting this thing off the ground, so our infrastructure is very much in its infancy (though we’ve been working lately to address that!). However, we have built this thing with an eye towards scaling, and don’t foresee any major problems in doing so as we move forward. Of course, the proof is in the pudding, but we’ve worked very hard to build a flexible product, and hope to see it grow about as quickly as we can keep up with it!

Do you plan to focus on utilising a microblogging format as the logical mechanism for your relationship and recommendation applications?

(Jonathan): The main inputs for our recommendations are explicit relationships (who you follow), agreements with other peoples’ blips, and the ratings you give titles. (Chris): I don’t think the microblogging format could necessarily be described as the mechanism for our relational/recommendation tools – the other data we’re collecting drives that – but the microblogging format uniquely contributes to this aim in that it encourages extremely high levels of participation, and thus, results in more useful data being present in the system for us to draw conclusions from. It is absolutely a key component to the success of these other components that we have built, even if it isn’t the primary mechanism by which these processes work. Whether we’d use it in future similar applications, I can’t say, but we’re both big fans of the behaviors that it encourages, and would very likely consider it.

And are there any Blips on products which have really shocked, surprised or amused you?

(Jonathan): Good question. It’s hard to pare down to just a single blip or two. Seriously, I can say that I am the biggest fan of blippr. As a huge movie geek myself, I’m constantly reading through blips and finding myself agreeing, laughing, vehemently disagreeing, and more. While some people fault blippr’s micro-format and say that you can’t really know whether something is good or bad within 160 characters, I say, read for yourself. You’ll be surprised!

Does Blip.fm show a route to monetisation for Twitter?

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It took me a couple of passes to get the value of Blip.fm as opposed to existing streaming radio online like last.fm. At first, for some reason, it wasn’t running properly and playing each track in turn for me, which didn’t help! But now it’s becoming a great way to discover new music recommended by my friends, even if I normally revert to streaming my last.fm library for longer periods. The two compliment each other is the same way as someone like John Peel complimented by record collection, but I couldn’t always make it through an entire show before some obscure German techno forced me to change radio station.

Blip.fm helps me find new music by effectively allowing users to Twitter with each song they choose, giving it some context, or publicly proclaiming their love for it etc. And I can aggregate these choices into my own list, give ‘props’ to other users for good choices, and filter the overall stream via my friends, just as I would with Twitter.

Where it might give a clue to revenue streams for microblogging is in offering the direct link to buy any track as an MP3 via Amazon. So if I like a particular track or artist, the opportunity to make a quick impulse purchase is always there – and it’s backed up by allowing me to listen to the track based on recommendations by my friends.

The only weakness is that not every track is available, and I need to be aware that I want to listen to this track offline, in my car, on an Ipod, at the time that I’m experiencing it…or be able to find it easily, and at the moment there’s no way to search my Playlist, or add individual songs to my Amazon wishlist.

But if what if this model was more widely applied – to offline magazines and books for example. And to products as well? One Twitter Affiliates scheme which wasn’t tied into a sole retailer, but operated as an aggregation service to allow me to recommend almost anything, and offer a direct link?

It’s probably the quickest and simplest method of monetising the Twitterati. And people can be persuaded to link their recommendations to returns for themselves or even for charity, as something like Squidoo shows.

It would be possible to test the theory if individuals listed book recommendations etc via existing Amazon etc affiliate accounts, but this may lead to confusion and disappointment if it isn’t flagged up as such before an unsuspecting user follows the link – but Twitter and the extra 20 characters could flag referral posts quickly and uniformly.

The only question for me is who tries it first – Twitter, or an enterprising external team? Anyone know a good developer? 😉

A Twitter account is worth $1000+

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Well, a twitter account is worth $1002.01 if you’re Ian Schaefer, the CEO of Interactive Marketing agency Deep Focus, and the person currently auctioning a one-month sponsorship of his Twitter page and profile.

What you get for your cash is:

  • Background image of your choice on Ian’s profile page, and the replacement of his profile photo with your image.
  • Brand representation in 8-10 outbound ‘tweets’ per day.
  • Coverage of the experience on his blog.

The money raised is going to charity, but possibly the most interesting part of the experiment is Ian’s motivation: “Someone’s got to figure out some kind of business model with Twitter. And I’d rather be part of the solution.”

It’s the same thinking which has seen Tweeple start selling individual posts, and hypothesizing about how Twitter can use the extra 20 characters for mobile (160 characters is the limit).

There’s still 18 hours left on the auction at the time of writing, so by tomorrow night we’ll see how much a Twitter account is worth. You can watch the ebay auction, here.

And, for the record, Ian’s got 495 followers, which leaves me wondering how much cash I could raise with my 600? 😉

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