Just the other day I had wrote an article about how Twitter has no revenue stream. Well lucky for me TechCrunch answered my question, quickly and accurately.
While there is still no day set in stone when we will see the advertisements on Twitter we already know that the advertisements will be nontraditional. This makes me question what exactly the advertisements will look like and how they will be presented. Twitter has a lot they could do to gain revenue from ads, and when you think about it there are plenty of nontraditional ways to do it too.
Affiliate Advertising
There are 50 Million tweet each day on Twitter. How many of those are about products? Maybe Joe got a new video game, or perhaps Sarah found her prom dress. What if Twitter linked the words “video game” or “prom dress” to a company selling those products? Think about it, you probably trust your close friends more than anyone else. Because of that if they just bought something and then Twitter links to a similar or exact item to buy you will probably be more likely to go and buy that.
Just in case you don’t know how people make money from affiliate ads here is how. They refer someone to the advertisers product, if that person buys the product then they get a percentage of the sale. So lets say that Twitter can make on average $1 per sale. Lets say they sell 10,000 items per day. They are making an easy $10,000 per day just from the text links. While that isn’t a large sum of money for banner ads, it is a large sum of money for an advertisement that is displayed as a link in the text. Another thing to keep in mind there are plenty of people who make much more than $1 per sale, some will make much more than $1 per sale. So it just depends on what Twitter can sell and how much of a cut they can get.
Avatar Advertisements
Why waste money when you can take that persons default avatar and turn it into a high quality advertisement? These would not be obvious, just very subtle ads that will be used a persons avatar that has not uploaded one. Maybe it will be a Pepsi ad or an ad for a new summer blockbuster. The options are endless as well as the money they can make. People currently pay a fixed price to have their advertisements displayed on a website for a week, month, year or whatever time frame they choose. How about instead of having that in the traditional banner spot you move that into a nontraditional area, such as the avatar.
Local Advertisements
How about having advertisements in the local trend spot? People are creating fan pages on Facebook now, and they are actually paying to advertise them on Facebook too. Most of these fan pages are local businesses and advertise to local users, this creates a very effective way to make money for local businesses. So twitter can charge a local company to have their event in the local trend section. They would charge you based on CPC, and the highest bidder gets priority. The ad would only be displayed to users in a designated radius, and thus it would help out local business as well as help Twitter turn a profit.
Anyway I Got Off Topic
Twitter has not yet given us a day when they will role this out. They are most likely going to be beta testing their advertising methods before they go ahead and make them public. I would guess it could be anywhere from a month to 6 months before we see any kind of ads on Twitter. But it is exciting to know they are getting close to rolling out an ad service. How do you think they could make money?
Oh by the way while we are on the topic of Twitter, why not follow me?
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