This column was finished before I realized that this week is Twitter’s Chirp developer conference in San Francisco where Twitter will supposedly (and finally) explain how it intends to make money. As you can see below I have my own ideas on this. Let’s compare my ideas with Twitter’s later in the week and see whose are more fun.
I don’t tweet. Yes, I have a Twitter account that’s attached automagically to this blog and whenever I write something new it sends a link to the world. But that’s not tweeting, not really. Still I have several thousand followers on Twitter and pride myself that I don’t inflict myself on them more than 2-3 times per week. I have 750 Facebook friends and there I am somewhat more active though nothing like many of my friends. But even though I am more active by far on Facebook than Twitter, there is no doubt that Twitter is more valuable to me than Facebook. And if I were Google — “Would Google buy it?” being one of the new de facto questions asked about tech startups — I would buy Twitter before Facebook.
Why I would do this is easy. I connect to more people through Twitter than I do through Facebook. The people I connect with through Twitter ask nothing of me other than that I tweet at them. They don’t tweet back, nor do I want them to. If I wanted that I’d try to friend them on Facebook, which is by definition a bidirectional medium. Twitter is a broadcast medium and, as such, has value similar to radio, TV, or publishing.
It is much easier to monetize my Twitter account and — again since it has more people in it — that account has to have greater commercial value.
Think about it. On Facebook I can tell the world that I’ve just written an interesting post and that they should go have a look-see. But, damn it, then I have to see the responses of 50-100 people. They like it, they hate it, they can’t be bothered with it, they find me annoying, etc.. I send out one thing and get 50 things back. Most of the time I don’t want that.
Facebook has a great monetization model — for Facebook, not for me. Twitter, on the other hand, has a perfect monetization model for the Tweeter, though I am not at all sure the company even realizes this.
Twitter works better for me than Facebook in two ways. First, Twitter is the new RSS only better, because Twitter sends not just the text and illustrations, it sends a complete link that brings readers back to see the text and illustrations and the ads that put my kids through private schools.
But that’s nothing compared to the Twitter ad possibilities — ads that you are probably seeing every day and don’t even realize.
Say you are a big celebrity with a million Twitter fans. You could tweet “God I’d love a Mars Bar right now!” and what would that be worth to M&M Mars? At a $1 CPM it would be worth $1000. But I think $1 is too low for Twitter because, after all, your followers follow you. They don’t drive by. They don’t happen to see you. They’ve asked you to enter their homes and spray paint your thoughts on their walls — thoughts that actually matter to the candy lover inside each one. That makes a commercial tweet worth a $10-$30 CPM. Take an average $20 and that’s $20,000 per million followers with Ashton Whathisname making $60,000 per day or $21.9 million per year from his three million followers.
Only one tweet per day has to be commercial to achieve this. In fact I’d recommend that no more than one tweet per day be commercial or people will start to realize what a racket this service is. One tweet per day makes it a daily competition among advertisers to be that Tweet.
Here’s my new trademark: One Tweet Per Day. This trademark is for sale.
I know a very nice lady, a documentary film producer, who has 20,000 followers on Twitter. Her one tweet per day is worth just as much as Ashton’s on a CPM basis — a $20 CPM for $400 per day or $146,000 per year. There is no reason to justify it being any less on a CPM basis, that is unless you could quantify the age group and buying habits of that group. I’m sure that will be next.
Facebook can’t even come close to producing numbers of this sort. And you might claim that Twitter can’t either, but that’s just because nobody has yet tried that we know of. Maybe they’ve been doing it for years and just didn’t tell anyone.
Now what happens when Twitter — still seeking that elusive business model, remember — suddenly realizes that a One Tweet Per Day ad auction is that ideal business model? Keep 30 percent like Apple does ($7 million per year of Ashton’s money) and send the rest on to Demi.
That’s the day Twitter gains an extra zero in market cap and Google makes its grab before that one zero becomes two.
Remember you heard it here first.