Twitter: Embedded Ads are the Way to Go

2008-05-08 20:00:00 -0400

Over a year ago, when we were first putting together PingMe, a system not entirely unlike Twitter, we had a pretty good idea what the real potential was for a revenue model and how valuable it could be.

A few weeks back we posited these thoughts in public because the discussion of Twitter's likely potential for revenue keeps coming up in the blogosphere and it seems like everyone is missing the obvious: sticking small, meme-sized ads in the tweets themselves, based on context and relationships, and exploiting the nearly unbounded impression space. Nice to see somebody agrees with us about the context part of things, even though I think ReadWriteWeb is getting the means wrong.

I'm pretty sure that if Twitter started sending direct advertisements to their users, as opposed to embedded ones, they'd chase their users away to the clone services that are starting to emerge and which will mature. I don't think people will pay to subscribe to Twitter to escape the ads; when a service has been free for almost two years (a long time on the Internet), that kind of conversion is probably not in the cards (although not impossible). The potential revenue in just embedding ads is so high that I doubt they'd risk angering their user base with direct ads.

On top of that, it was a few months ago that some Tweets were arriving on my phone with an embedded ad for Twitter itself at the end of it, signaling, IMHO, that that would be the ad space in the future.

I should mention that since we started using our direct-embedding method in PingMe messages to briefly mention our other products and brands, we've yet to have any complaints from our users. You can't ask for better than that (well, aside from goal conversions).

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