At this point in the evolution of the social media, pay-to-play runs counter to any social network business model. The wildly popular Twitter will eventually have to break the barrier and declare a revenue model. In December, AdAge offered up a list of 9 ways Twitter can make money:
- Charge for it
- Create a contextual ad engine
- Charge for analytics
- Enable Mobile Payments
- Create subscription based groups
- A Twitter Pro version
- Sell the company
(h/t The Standard is running online betting on whether Twitter adopts a revenue model by June 30, 2009)
Here are examples/interpretations of each business model:
1) Charge for it.
Yesterday, real estate social network Active Rain announced its new $29/month fee for new members who want to post consumer-facing articles on Active Rain. The real estate industry is unique in its widespread adoption of the social media for business networking purposes, and Active Rain’s ability to connect its real estate agent members with consumers looking for a realtor makes pay-to-play an ROI proposition. $29/month may leverage one lead that can contribute $1,000s in fee income. There are active discussions on this policy at Active Rain (570 comments+) and Bloodhound Realty Blog.
I believe this is the first pay-to-play move by a large social network of 130,000+ members. It’s a courageous move that can be only assessed in hindsight based on future adoption rate.
2) 3) Advertising is being viewed too critically by the social community as a marketing relic or at worse, propaganda. Contextual ads a la Google Adwords could well work because Search.Twitter.com replicates a real time search engine.
4) Charge for analytics – Real time data mining of Twitter feeds in aggregate can create enterprise services for industries like finance and retailing that rely on instant trend analysis. Feb 14 Forbes discusses the analytics model.
5) Enable mobile payments – AdAge points to VC Nate Westheimer’s treatise that Twitter’s ubiquity on mobile devices can make it a mobile Paypal platform. The uploading of the iPhone picture of Flight #1549 in the Hudson onto Twitter application Twitpic is evidence of Twitter becoming an event-based mobile platform.
6) Create subscription based groups – Yammer, Present.ly and other enterprise Twitter platforms are developing. Twitter can watch them and replicate.
7) A Twitter Pro Version – isn’t that Friendfeed?
8) Merchandising – there are already a lot of characters on Twitter including the actors of Madmen. Have companies and users develop a stable of Twitter characters, brand and merchandise them.
9) Sell the company – the original strategy.