Over at Mashable, Mark “Rizzn” Hopkins describes the latest “Cash for Tweets” scheme Magpie:
I find this new method of Twitter monetization to be just as interesting, and based on the routes that the Magpie folks are taking, I think that it’ll do pretty well, assuming they’re able to keep a lid on those that would try to game the system and run them into bankruptcy.
My comment:
You rightly point out that some people will weigh the quick buck vs their social capital and credibility in the community and maybe decide to grab for the beer money. But those amounts are surprising for a reason. There’s just no way they are sustainable.
I’ve been watching clickthrough rates on my tweets for a long time via Tweetburner. They’re highly context sensitive and fine-tuned to the degree of genuine usefulness in the tweet or implied in the link.
Twitter readers don’t care who you are or how many followers you have when it comes to click-through-credibility, they care if the link sounds compelling.
So as the advertiser, paying magpie what sounds like a fairly high CPM, is probably NOT going to be happy with results and continue the advertising at that rate. The platform on the other hand (your tweet stream) will go down in value by losing followers and by losing click through credibility among followers. We’ll go blind to the #magpie tag just like we are to banner ads. For that matter, Twitter clients will probably offer settings to simply filter out the adtweets.
I believe, firmly, there are ways for Twitter to make money and for people and businesses on Twitter to make money, by working within the cultural system there.
Had I gone on, I would have pointed out that the clickthroughs I do see frequently depend more on “re-tweets” which are pretty unlikely unless Magpie obtains some amazing ad inventory. I do give them credit for transparency though, each ad begins #magpie. It’s not hard to imagine that imitators will follow that (try to) hide the adtweets.
So, How Many Clicks Would a Magpie-r Click?
Despite nearly 8k readers, I generally see just single or double digit click-throughs, with 200-300 for a blockbuster link. Tweetburner reports that I’ve shared a little more than 500 links through them and generated about 39,000 clicks, for an average around 75. (65 without the one @ZeFrank contest link with 5,000 clicks) System-wide, tweetburner is measuring about 5 clicks per Tweetburner link. Notably, many of these “per link” clicks are for unique links that were repeated numerous times when a Twitter post was “re-tweeted,” so the real numbers are even lower.
I really doubt significant traffic could be generated by paid advertising links, even if they could scale the service up enough to have a font of genuinely “fun and useful” ads to contextualize into Tweeters streams.
What’s a Tweetworth?
Even if making your Twitter use profitable is important to you, my guess is that your Tweets are worth a lot more than what Magpie, uT.ag or Twittad are going to pay you for them. We’re talking about your credibility and integrity. Your reputation and relationships on Twitter are a valuable asset. Think about it.
Whether you meet clients on Twitter, solve business problems faster and less expensively, find new opportunities to learn and grow, develop your personal network or any number of direct business applications on Twitter, you’re probably getting way more value in the long run (better jobs, more clients, new opportunities) than you might be able to extract in the short term by trading on your good name. Heck, even if talking with friends on Twitter replaces the cost of going to a movie or another expensive form of entertainment, would you really want to dilute the quality of that interaction to make a buck?
And so?
I frequently point out that Twitter was designed as a nicely self-correcting ecosystem. Yes there will be spammers and unwanted ads and ways that functions we enjoy may get mucked up and out of balance, but our ability to refuse to follow that which is not interesting is powerful. Our ability to block, pass word and choose to remain amongst those we know and love is significant.
Ads and other revenue schemes will come to Twitter, and they will work where they work and with whom they work. And much like the world outside, individuals will move and connect and read and express themselves in the neighborhoods most suited to them. Social pressures within the system will alter the flow of who follows whom, and what level and type of commercialization is acceptable to the localized culture.
Revenue approaches that serve a thriving community will flourish. Schemes that aren’t sustainable, won’t. And I don’t think it’s that big of a deal.
UPDATE: ReadWriteWeb’s Rick Turoczy weighs in with a similar POV.
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{ 10 comments… read them below or add one }
Great post Laura,
Rizzin and I were discussing this on twitter tonight. The word “Ponzi” popped into my head. And i was thinking that there is no way in heck that advertisers would sustain spending this much based on click thru rates as you noted.
I signed up to run an experiment and I will turn if off in 3 days. I also thought people would become blind much as they have become trained visually to ignore adwords.
The other thought I had was to write a greasemonkey script that would strip out all the #magpie tweets so I would never have to see them.
The point here is that i doubt this is a sustainable business model as the CPM is way too high if you are looking for performance. However for brand awareness it could work.
Think about this example: Movie releases or Album releases this just might be a way to “blanket” twitter for a week to do an intensive short ad campaign.
Cheers!
Your question “What is a tweet worth?” goes to the heart of social media.
Monetization has been extremely difficult because it’s not about ad views or some type of simplistic ROI. Social media is driven from activities based in the intangible realm of human & information capital. As long as we focus on ad clicks, the true value properties can provide to participants is left out.
I completely agree. The self-regulating nature of Twitter weed out heavy ad use and social capital is far more valuable. Personally, I would likely unfollow most who bother me with ads. Twitter is about relationship-buliding.
If you have friends “trying out” magpie (Hi, Rodney!) and would like to filter those tweets out of your stream, some friends and I are in early development of a web-based Twitter client that lets you filter your stream by person, keyword or hashtag. It’s called twalala: http://twalala.com Place a filter on #magpie and you’ll never see an ad again.
Of course the the point will likely be moot as Laura’s analysis is spot on: the ecosystem will filter these folks out naturally.
I was joking with someone today that signing up for magpie should also get you an account on qwitter so that you can track the damage done to your follower list.
I’m still not seeing a reasonable model to advertise on Twitter. Models like Adjix (puts a pop-up link in the url when you shorten it) also seem to be a sketchy revenue model.
The value of Tweets is aggregate, measured in gained relationships and viral messaging. How that helps Twitter monetize I don’t know.
Would people pay for a monthly fee Twitter or would that kill it?
Great post Laura… I find that even I am at the point where I can quickly tune out advertising… I expect that Generation Y (who has all the ‘disposable’ income these days) doesn’t even see that sort of marketing at this point.
I agree with everything you’ve said.
Well done, very thoughtful, insightful analysis. I too have experienced similar activity/behavior with Tweetburner links. Very content driven and dependent on re-tweets/ re-syndication. FYI, I am averaging in the low 50′s.
More importantly, I don’t think that an ad model would work for Twitter and believe that Twitter has come to that conclusion based on their experience in Japan. There is a better way, that I hope we hear about soon.
Excellent post and points above.
Self-regulating or not, a line of text in the form of an ad, with my t-name would be going out without my control over its content (until after the fact, possibly). Implicit endorsement, implicit agreement. This worries me.
I love the “ecology” term. It’s survival of the fittest. Those who may use MagPie will learn that there are those of us who simply are more interested in relationship building on Twitter.
I just can’t see this model working – there are too many savvy individuals sick of being spammed and would quickly unfollow anyone who would use MagPie.
Good thoughts Laura!
Great stuff, and I definitely agree with your sentiment. I think that Magpie specifically is an interesting case study about self-correcting communities because we get to watch the ecosystem self-correct in a very public and open way. People announce that they are going to ‘try’ Magpie, people announce their impressions of it, both positive and negative, and people announce what they intend to do about Magpie, both for themselves, and for those that they follow that use it, and it’s all done in a way that allows others to follow along. We’re essentially making the decision about whether to use Magpie or not as a collective conscious.
In addition, I agree with what MK said, in that one of the scariest aspects of Magpie is the idea of implicit endorsement. It’s not a banner ad that sits off to the side of other content and stands out as advertisement. It’s an ad placed right into the stream of communication, and with little more than a hash tag to identify it with, the unstated goal is to come off as an endorsement by the Twitter user to his or her followers.
There are more reasons that I’m anti-Magpie, but for the sake of space, I’ll just link to them: http://thefutureofads.com/2008/11/03/magpie-tries-to-make-twitter-an-ad-network-fails/
In summary though, I hope that we see the end of Magpie very soon, and that this self-correction is a swift and decisive move that sends a message to other ‘ad networks’ to stay away from Twitter.