Big business in the Internet space is all about scale. How a business can effectively reach scale without losing its shirt is a pretty obvious indicator of their ability to succeed moving forward. Why do you think there was so much hand wringing over the Groupon numbers recently? Scale is costing money which means they are losing money. Not good.
Well, Twitter wants to do things a little differently and it’s about time. The still mythical revenue bird is getting more attention especially since Twitter and Apple are sharing a nest. So what is Twitter looking to do to pump up the revenue volume? Be just like any other Internet monolith: automate.
Twitter plans to offer an automated ad-buying system for small businesses that should lead to a torrent of new advertising for the platform.
Adam Bain, Twitter’s president of global revenue, says that small businesses now have to go through Twitter’s sales department, which doesn’t have the infrastructure to field all the requests. To meet the need, Twitter plans to roll out a turnkey ad solution “later this year,” Bain tells us.
If this is truly targeted at small business it will be interesting to see just what percentage of them will respond to the self serve model. Google only expects 25% to do so (according to my sources at least) but Google also has real numbers and a long track record in place to help that along.
Twitter on the other hand is still a mostly unknown entity in the ad space. There are legitimate questions about just how many people actually use Twitter v. the number of accounts they claim to have. Advertising as a whole on Twitter is so much of a work in progress that one wonders just how much progress they have actually made.
Considering how tough it can be for Google at times to reach the SMB with its culture of online help vs. live human interaction, I would think that Twitter’s road to success with the SMB will be a lot longer and much bumpier.
You get the feeling that Twitter is operating on a “if you build it they will come” attitude but I wouldn’t be so sure. 200 million accounts seems like a big guest list to be sending invitations out to for advertisers but if only a small percentage of those accounts are actually using the service then that racket will be exposed ‘toot sweet’.
What do you think of the real prospects for Twitter advertising? Are your customers there? Do you really even know?