How to Turn Twitter Into an Ad Network in Three Easy Steps

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Brands certainly take Twitter seriously; just ask Motrin. But while it's very useful in monitoring conversations about products, it isn't a medium for pushing out brand messages ... or is it? What if certain Twitter users allowed marketers access to their feeds, and matched their user base with advertisers? Then, you would have an ad network and a business model that could provide revenue for both Twitter and its users.

The three steps I propose below are not revolutionary or even all that new, but what is interesting is that they are newly possible (and even easy to deploy) in the context of social content, and many companies are already doing different pieces of the overall equation.

Step No. 1: Acquire inventory from publishers.

Every ad network needs inventory. In the traditional web, this means ad units next to content. In Twitter, this would mean the right to occasionally insert a tweet into a user's feed. To make this functional, all one would need to do is allow users to enter their Twitter name and password (giving the ad network the ability to publish tweets on their behalf) and then have each user indicate an Amazon FPS account, PayPal, etc to which they would like to receive advertising revenue. You could add a few toggles to allow users to define how their feed can be monetized (specifying the frequency of promotional tweets they want, hours of the day they are willing to push ads, whether or not they are OK promoting no adult content, etc). To my knowledge, no one is actually doing this yet, but there are services like Twittertise which allow individuals or companies to schedule ad content to run on a single feed.

Step No. 2: Value and categorize your inventory.

Ad networks need to understand the nature and value of their inventory to be able to match the inventory with advertisers. This is where Twitter gets really fun. Using the Twitter API, you can first get a sense of how much reach each user's feed has. More sophisticated models of valuing reach would include measuring things like how many followers each of the user's followers has (the potential secondary impact), the propensity of those followers to re-tweet, or repeat information pushed out through the feed, etc. You could even screen for location based tweets to screen for local demographics.

In terms of understanding the nature of the users, you only need look at word frequency on the feed. Ideally you would also look at the content which other followers who subscribe to the feed to understand the ultimate audience directly. Many companies are brushing against these concepts, though no one is explicitly valuing a tweet to my knowledge. Summize (which was acquired by Twitter) had a big piece of the equation in the form of a twitter search engine. Countless services out there measure the reach of individuals on Twitter and create tag-clouds based on frequently used words. The upshot: people are very close to explicitly attaching a dollar value to a tweet on a given feed.

Step No. 3: Sell inventory to advertisers, quantify impact, and refine your model.

Finally, ad networks need to sell their inventory to relevant advertisers in the form of 140-word text ads with links to offers, and help those advertisers refine their targeting and messaging to increase ROI. More and more advertisers are experimenting with Twitter and how they can leverage the platform. To do this effectively with Twitter you simply need a system of measuring the impact of your tweets in a way which you can meaningfully feed back into a self-refining model of how you are valuing feeds. No one is after this yet, but a company like bit.ly which gives some analytics on click through rates on links inserted into communications platforms like Twitter is on the right path. In the end, it is just about refining a model of matching types of feeds, with types of followers, with the exact content, time of day, context, etc to get the desired response.

Tada, a Twitter ad network -- abstractable to any social content.

Several caveats:

A. Brands are still scared of inserting themselves into the conversation -- is it inauthentic to push marketing tweets on someone feed? Not sure. I am sure there is a learning process here, and probably the tweets need a 'sponsored' disclaimer -- but the clear fact is that more and more of the consumed content in the world is 'user generated' so advertisers need to figure out how to get their messages out on those terms. Interestingly, Pownce, which recently decided to shut down -- had from day one advocated the concept that on its free version, advertisers could insert messages into people's feeds

B. Very few Twitter users have enough valuable followers to make any money from allowing advertising on their feeds. Only a tiny, tiny number of individuals could even theoretically 'twitter for a living' -- just as almost no one successfully blogs for a living. That said, the more you know about your audience the less it is just about scale. When, all of a sudden, you can actually quantify the value of reaching the specific people who follow your feed, your CPM might be off the chart even with very low absolute numbers of followers -- so long as you have the right followers.

C. Twitter just might shut you down.

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Sam Lessin is founder and CEO of Drop.io, a file-sharing service based in New York City.
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