¶ … Social Networking and SaaS
Twitter did figure out how to produce revenue & #8230; give people a reason to come to their site and charge revenue of advertisers for 'Promoted Trends.' What's new with what Tweeter is doing to create revenue and can it be a method of revenue creation your group's eCommerce company could use?
Common to many social networking sites, Twitter initially struggled to define what its business model would be over the long-term. Having to triangulate between privacy, security, personal preferences on the one hand and the need for continually providing an open architecture for developers while ensuring an excellent user experience challenged Twitter's senior management initially (Laudon, Traver, 2011). The initial efforts at creating an advertising platform failed as Twitter violated one of these three areas of their business model. Initial efforts at sponsored Tweets were at times done in a surreptitious and often shielded strategy, which made Twitter less trustworthy than Facebook. Facebook's lead of segmenting out users and attempting to sell advertising as well. This ultimately failed due to the lack of precision the Twitter platform had at the time. As Twitter experimented with these advertising models and approaches, they also began to impinge on the privacy of others as well, leading to continued protests from their user base. Exacerbating all of these factors was the continual churn Twitter was experiencing, with many of them leaving the service silently. These users left the service and allowed their accounts to stay on the site, dormant. It is estimated that nearly 30% of a given Twitter user's accounts are dormant. This also made the segmentation model that Twitter initially devised impractical.
After the fine-tuning of Tweets and the questionable ethical practice of allowing for paid tweets without necessarily telling other members this was going on with advertisers, Twitter settled in to a sponsored ranking advertising model that...
From an e-commerce business model standpoint, Twitter had finally found an approach to deliver value while also ensuring authenticity, transparency and trust. The Promoted Trends business model is accomplishing this well and is segmented on a geographic basis extremely well. Given Twitter's advances in analytics and business intelligence, this approach to segmenting their markets was achievable with a very high degree of accuracy. A recent example of this is their global campaign orchestrated with BMW for the launch of an entirely new line of vehicles (B & T. Weekly, 2012).
The unorganized and often conflicting business models of Twitter in the past are today galvanized around the analytics, business intelligence (BI) and depth of insight and expertise with Big Data or the use of exceptionally large, complex data sets. This continues to be a catalyst of future revenue growth for the company as well. Future additions to the Twitter business model include creating a reputation management and influencer series of applications comparable to Klout and applied to Customer Relationship Management (CRM) systems and applications (Kolsky, 2012). Additional future additions to the business model include in-depth analysis of Twitter streams using advanced sentiment analysis and brand recognition analysis. Companies with expertise in advanced analytics are partnering with Twitter to capitalize on the massive data streams generated by the application, including Radian6 a division of Salesforce.com and Attensity among others (Barnes, Bohringer, 2011). The future profitability of Twitter is entirely predicated on how well they choose to manage their nascent analytics, BI and Big Data expertise, specifically in the area of ad targeting and sentiment analysis throughout specific markets (Morrissey, 2010). Over time Twitter will be able to create a real-time monitor of customer sentiment analysis for the most well-known and talked about brands globally. This will provide marketers and executives…
