The fundamental reasons that twitter does not go with Ads, for now.
Verdict was out, for now. Twitter sees tools, not ads, for revenue.
Many people argue that twitter is or will become a dominant real time search engines. Given Google’s success with search engine ads, it should be easy for twitter to simply replicate Google’s model, putting Bid based ads up along with live stream of tweets on search.twitter.com. Why bother to create “intangible”, “premium” tools?
Twitter has One Solid Reason not to quickly jump into pure Ad-supported business model: people behavior, simply put, how people search. Let’s take a good look at how people use search on Google and twitter.
Majority people search Google to find information they don’t know, because Google gives relevant web results to our immediate needs for information. Businesses find it enticing to show their ads with highly relevant Google search results (links). Google then makes money by charging businesses for showing ads along side with these relevant results. Google was born a utility tool for consumers (as opposed to businesses). Ad model and Google make a perfect couple.
Twitter is different.
Majority people come to twitter to share the information, NOT search We tweet about things we are doing, news we just heard of, thoughts bugging us etc…Most of the time we do not search twitter. While search is the ONLY thing we do on Google.com. Who search on twitter? Businesses. Not consumers. Over and over again, we have seen businesses use twitter to FIND consumers followers on twitter, expand customer base, facilitate communication, spread words, compliment customer service etc. Improved Twitter’s search will play a crucial role for businesses to do that by presenting relevant consumers to businesses in search results. The alternative (for businesses to grow on twitter) is for twitter to present businesses in front of consumers when consumers tweet or search. However, showing ads in tweet stream is intrusive, because people are here to share, not search (like Google). Showing ads in twitter search results are not scalable, because majority people spend majority of their time on twitter to share, tweet, NOT search. Therefore, businesses will not benefit from paid ad from twitter as much as they do from Google.
To summarize:
- Consumers search on Google, hence business ads makes sense for Google
- Consumers tweet and social on twitter, hence ad model does not make sense.
As previously mentioned, Businesses find twitter incredibly useful due to its intimate, real time relationship with consumers/customers. However, businesses also have experienced tremendous difficulty to effectively increase their circle of influence on twitter due to lack of tools. This is where twitter can step in and excel:
- Build a kick ass real time search for businesses to proactively reach out to consumers
- Build kick ass “circle of influence” tools to make it easy for businesses to track, measure, manage their follower base and communication stats.
Twitter founders may not have thought this process like written here, but their gut feeling and access to real time data have already guided them to the right track: a business model built on tools to facilitate communication. After all, twitter is the ultimate social sharing utility.
The questions left to ask is: what does this mean for twitter eco-systems? I have some thoughts to share in the future.
