Twitter could make money by charging for followers
March 19th, 2009 |
It’s probably not a new idea, but amidst its rising popularity, and increasing speculation that Twitter might charge “commercial” users, I wonder if charging business users on a per-follower basis might be one way the service could make money.
In the world of print, advertisers are charged on the basis of “impressions,” usually expressed in CPM (cost per thousand). It costs more to advertise in Wired than it does in Model Railroader. (No offense to model railroaders.)
“But wait,” you say. “Isn’t everything online free?” (Of course not, but thank you for asking.) Online advertisers pay Google AdWords based on the popularity of the term and on the number of clicks, measures which represent the number of people who have opted (agreed) to view the advertising content. (The term “social media,” for example, costs $2.28 per click. Save money by buying three word terms like “social media marketing” and “social media PR” for just $.05.)
In other words, marketers have tacitly agreed that they are willing to pay based on cost per impression. When someone follows a company like Southwest Airlines, Zappos, or Dell, that represents something equal to a click, and in fact, may be more valuable, as it indicates agreement to view multiple, ongoing advertising messages from the company.
This proposal raises a number of issues of course. What is commercial use? Clearly a Fortune 500 company promoting its goods and services is engaged in commercial activity. So, too is a crafts person with an Etsy account or a real estate agent, but they don’t stand to achieve the same commercial advantage as the larger corporation. This seems inequitable, although, to be fair, they would pay Google AdWords the same dollar amount for the same words and clicks.
Non-profits, schools, public safety, public health organizations and many other classes of users are non-commercial and should not be charged based on their follower count (and no one is saying Twitter plans to charge them.)
But the intensity with which Twitter users pursue any and every strategy to grow their follower count, including offering expensive prizes like laptops to attract new followers, demonstrates recognition of the value of a large number of followers.
The question is, how many will continue to recognize this value when they are asked to pay for it?
Tags: Twitter, commercial, business, pay, followers
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Twitter left it too late to do this. When they launched they should have said something like “up to 500 followers free!” then once you go over that, you pay a monthly fee for up to 1000, a higher fee for up to 3000, etc.
The vast majority of users have fewer than 500 followers so pay nothing. On the other hand, those are the people that pro users want to reach. Those who have more followers than that must be investing quite some time in Twitter, so chances are they would see a monetary value in it too.
Of course celebrity accounts get followers without making money. In such a case, Twitter could “sponsor” those accounts.
But now what can they do? It’s out there as free. There will be a riot if they change that. And as you say, it’s impossible to tell what “commercial use” on Twitter means. I use Twitter to link to my blog, and there I encourage people to do business with me. Is that commercial use? Who can say?
Comment by David Barnes — March 20, 2009 @ 7:23 am
Would companies be required to pay for bot followers? For “social media marketers” who follow 20,000 but are basically broadcast-only? For new users who click “follow all” when presented with a list of suggested accounts on signup? For anyone they follow who has auto-follow enabled? None of these seem quite fair.
The way for Twitter to make money from businesses is to offer a suite of account management tools that the casual user doesn’t need; essentially, CRM features that would enable a staff, not just an individual, to manage a large Twitter account. But it may be too late for that, as 3rd party vendors already have a huge head start on these features.
Comment by Marla Erwin — March 20, 2009 @ 9:55 am