Twitter and MySpace each announced programs last week intended to make money by giving advertisers access to their users. The approaches couldn't be more different, and I think they raise more questions about the nature and hopes for monetizing social behavior than they answer.
Twitter’s Promoted Tweets will work kind of like Google’s Adwords: companies will bid to have their 140-character messages appear at the top of relevant searches. Two interesting twists will be that there'll be coordination with its geo-location, so imagine adding the context of place to Tweets ("sale-priced blue sweaters 100 feet from you"), and a quality called "resonance" which will require Promoted Tweets to be forwarded or they'll be dropped. Resonance will also be part of the advertiser's history so brands that get higher averages will get charged less for polluting the Twitter stream.
MySpace's Events is a calendar function that draws on its huge musician base to tee-up local concert info for users. It includes rankings for popular events like baseball games and offers selling opportunities for tickets and schwag. It seem as though the entire service can be bought (Walmart is sponsoring it currently) and I'd imagine there’ll be ads placed on the calendar itself, much like the way MySpace craps out its user interface overall. One intriguing functionality will be the inclusion of event notifications received on Facebook, suggesting that MySpace hopes its Events will become a one-stop planning and marketing platform for its members.
In other words, Twitter is trying to make an old idea look new, and MySpace has a new idea that it'll do its best to make look old.
I'm particularly unimpressed by the Twitter announcement. "Resonance" when it comes to commercial speech is a hoity-toity name for something far more pedestrian: price promotions. After all, utility is the primary currency on Twitter, in that the messages that get "used" the most (forwarded, shortened, whathaveyou) are those that offer immediate benefit. Titillating gossip is one such example, but I'm not sure that Best Buy is going to want to sponsor Twitpics of Lindsay Lohan's latest stumble. Perhaps global news events are something to which Starbucks could attach its brand (imagine the latest emerging crises brought to you by sponsored microbloggers).
But the business corollary for this utility is coupons or price cuts, which means Twitter's grand monetization plan is to become one giant direct marketing mechanism.
There's nothing wrong with that -- its biggest successes so far have been in distributing coupons and selling stuff on promotion, so it's just institutionalizing what's already working -- but then Twitter has nothing to do with branding. It's not even an advertising vehicle, per se, as much as it's a neat replacement for classified ads and Sunday newspaper coupon inserts. Forget consumers forwarding interesting news tidbits about business operations; for all the talk of conversation and the impact of the social web, it turns out that Twitter aspires to be the 21st Century’s version of direct mail. Resonance could just as easily be called redemption.
The MySpace plan is more forward-looking. Up until now the service has mistakenly assumed that it's a media channel not much different than a broadcast network or magazine. This thinking probably came from the good folks at parent company News Corp, who know a little something about making such a model work quite brilliantly. It was just a stupid idea for the interactivity on MySpace because it forced people to get things done almost around/in spite of all the ads that cluttered its pages. The largest motivator for said interaction continues to be the presence of a reported 14 million musicians who post song samples, tour dates, photos, and thereby offer virtual homes for their fans that can be shared and grown. This behavior has survived MySpace's best efforts to ruin it.
So turning it into what's effectively a stand-alone app is really smart by building on established behavior and attempting to make it bigger and better. The monetization part may come through doing so, not from crapping it out as the company has done in the past: if MySpace can prompt and support the activities of its music fans it'll present many opportunities for add-on services (links to UGC, value-add content from musicians, etc.), all of which can be monetized through sponsorship. It might even start distributing coupons and sales promotions ("hey, while you're at the concert you can get a $1 Whopper at the Burger King right around the corner, and here's the map"). This is a potentially powerful approach to creating platforms for brands to deliver greater meaning, relevance, and utility to consumers.
I think the Twitter plan tells us a lot about what worked in the past, while the MySpace gig suggests what's possible in the future. Now, with that said, I think things will shake out like this:
- Twitter will make oodles of money until consumers realize that they're being exploited and brands figure out that the discounts they're forced to offer aren't really making them any more money. Another service that offers the same functionality (or more) only without the ads or any costs will come around and Twitter will fade away. Another group of entrepreneurs will start talking about monetization.
- MySpace Events will become the default calendar for a small group of die-hard music fans but it won't likely gain enough critical mass to grow beyond those rather narrow (thought profitable) confines unless there are other services coming down the pike (or perhaps some big technology platform play, enabling it to leapfrog into becoming the true home for social web experiences). MySpace continues to fade away and is replaced...yadda yadda...see prior bullet point.
In with the old, out with the new. Just like always?
