Twitter Value Prop: Addiction?

addictionI’ve been wondering what the Twitter value proposition to me is for some time. I get what Twitter is, and yes, I Tweet, but I’ve never been entirely sure why Twitter should matter to me. Apparently, many share in my quandry, says Silicon Valley, The Harvard Business Review, Nielsen and others.

By a number of measures, Twitter’s metrics look pretty dismal. User engagement is low and customer retention even lower. Numbers like these beg the question, what is the real and compelling value to a business or consumer in using the Twitter application?

Even the CEO says what he’s shooting for in a relationship with his audience is addiction.

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Web 3.0: Show Me the Money

piDespite a sincere enthusiasm for all things Internet, Site can’t help but to have noticed a lot of over-valuation going on.

Site applauds recent news from Silicon Valley that increasingly scrutinizing eyes are being put to Internet-based investments. Most notably, VCs now seem more interested in investing in companies projecting non-ad-based revenue models, citing that Accel’s early investment in Facebook might not be repeated today given the social platform’s challenges with monetization.

Making money online is attractive because it’s extremely efficient and cost-effective if done right—not because it magically happens with when traffic or even market share get large. Potty-mouth notwithstanding, Jeremy Schoemaker makes a nice case for caution when counting your Internet chickens before they are hatched in his 7 Deadly Sins of People Trying to Make Money Online.

Making money online is smart. Making smart money online is even smarter. Cheers to the portfolio managers who see past simple site popularity and look for clean, predictable and short paths to profitability when deciding how to spend investment dollars.

‘Twas the Night Before Twitter Got Montetized

moneySo what do we think, Tweeters – would we like to get a fraction of a penny for each Tweet? According to Ad Age, it can be done in three easy steps.

Site is skeptical. Volume is the name of the game in online advertising – advertisers have to kiss a lot of toads (put forth many, many images) to find a prince (get a click), even when the audience is well targeted.

Although some Tweeters have impressive follower volume, we’ve yet to see numbers that would mean anything to an advertiser, most of whom need to present an ad to several hundred thousand unique visitors a month before they see any real ROI from an advertising investment. Keyword: uniques.

Sure, our Twitter followers are highly targeted, presuming they self organize into networks of shared interests, but their networks are also relatively static. We’ve yet to see any single member of a social network – not My Space, not Facebook – see hundreds of thousands of brand new unique visitors to their page every month.

The result thus far has been that all that fantastic technology that can scan content and determine what product and service categories will interest the followers of one specific Tweeter or the visitors to a single Facebook page, usually identify one or two. This explains why when we log into Facebook and visit our friend’s pages, we see the same stale ads again and again.

Site thinks the content + ad model for monetizing web properties works quite well for many, but not for all and especially not for social networks. Facebook has yet to monetize profitably, let alone find a path to sustainable revenue growth. Famous for giving away the store to Facebook app developers who do see hundreds of thousands of unique visits per month, Site predicts Facebook will soon discover this is the only real revenue stream on the property. Watch for Facebook to start taking a bigger slice of the pie from application ad revenue.

Especially in today’s economy the path to revenue for online ventures needs to be much, much shorter. Investors don’t have five or six years to wait around for Amazon to get profitable anymore. Site is keeping it’s eyes and ears open for social networks that skip the ad model and aim for immediate revenue sources – direct commercial relationships with their users in the form of subscription fees.

Twittering Mad Men

betty_draperI was thrilled to find a replacement for my dearly departed loved ones, Six Feet Under and The Sopranos in Mad Men, my new crush. I was a slow convert, but to steal a line from Peggy Olson, “It stays with you.”

Also entertaining has been the back and forth between AMC and Twitter over the Mad Men cast that showed up as personae on the Twitter messaging network. It appears AMC made a stink at first, but then starting drinking the social media Koolaide, in the end, applauding this kind of fan engagement.

It’s also been speculated that AMC is really behind the Twitter cast of Mad Men in the first place. Their Twitter profile pages do look suspiciously on-brand and well-packaged. It would surprise me if AMC were as social media un-savvy as the affair would lead us to believe. Getting upset by the fact that community engagement has a life of its own is so over.