When it comes to launching a business model, Twitter has been as slow as molasses. Co-founders Ev Williams and Biz Stone are always quick to point out that their focus right now is on the product, not on making money.
One of the potential business models that has been discussed: brand management tools and data access for brands. But what happens if Twitter takes too long and third parties take over the market?
That increasingly looks like a distinct possibility. The latest evidence: CoTweet, a startup offering a "platform that helps companies reach and engage customers using Twitter", has just launched its first paid service.
For $1,500 per month and up, CoTweet's paid clients get access to more advanced tools than CoTweet currently provides free users, and paid subscribers get to store data for as long as they'd like. The Wall Street Journal explains:
...customers get the ability to store data about their interactions with other Twitter users, including tweets, retweets, replies and direct messages, for as long as they’re an active client. The free version of CoTweet, in contrast, stores conversational data for 14 days, he said.
Enterprise-program customers also get analytics tools that show the reach of their Twitter activities (for example, how often their tweets get retweeted), types of inquiries they receive and average response time. This kind of information is increasingly important for companies getting involved in the messaging service, Mr. Engle said.
According to the Journal, blue chip brands are loving it. Big names like McDonald’s, Ford and SunTrust have already signed up.
Both McDonald's and SunTrust went on the record with the Journal about their use, which isn't insignificant. For McDonald's, CoTweet is being used to manage the company's activity on Twitter and CoTweet "will...be even more important for us" as McDonald's rolls out local Twitter accounts according to company spokeswoman Heather Oldani. SunTrust jumped on board as a paying customer of CoTweet because the company believes it will help it navigate the space. CoTweet is letting early customers shape its future feature set and SunTrust's Robert Ross stated "We’ll be among other what we consider premium brands, one per industry, so we’ll be able to help define what is a very nascent usage of this particular channel".
If you're in management at Twitter, this should bother you. Big time. CoTweet is establishing strong relationships with the brands you should be doing business with. And at $1,500/month plus a pop, CoTweet is cementing those relationships with money.
The question for Twitter management is how long it will take before brand relationships with companies like CoTweet significantly reduce Twitter's opportunity in this market. Obviously, there is probably a lot that Twitter can offer brands that others can't simply because it has direct access to its database. But at some point, if brands have become so invested in third parties like CoTweet, that may not matter.
Adding to the threat: Twitter appears to be indirectly helping companies like CoTweet with a lazy approach to customer service. As reported by AdAge, many brands are feeling neglected when it comes to the protection of their brand names on Twitter. Chris Hosford, Hyundai Motor America's VP of Corporate Communications, told AdAge that Twitter seems disinterested in helping the automaker deal with the unauthorized @Hyundai account:
They simply haven't responded to requests. Our brand name is extremely important to us. ... We're very disappointed that Twitter has shown no interest in protecting brand names.
If Twitter turns off brands like Hyundai like this, why would any of them want to eventually pay Twitter for services? While I have no problem with Twitter adding precocious kids to its suggested user list, and taking the time to verify their identities (you know, in case somebody tries to impersonate them), it seems to me like Twitter has some of its priorities mixed up.
At the very least, I think Twitter's relaxed attitude is starting to diminish its market opportunity. As I see it, Twitter will probably get stuck being just one of a number of companies brands pay for Twitter-related services and data. That means that Twitter's power to control pricing will likely be minimized, especially as CoTweet and other services like it expand beyond Twitter. CoTweet, for instance, is adding support for Facebook, potentially making its offering more compelling than what Twitter will be able to offer, even if Twitter can throw brands some bones in the form of nice-to-have proprietary data.
The lesson here: in business, as in life, don't put off until tomorrow what you can do today. Note to Twitter: that's true no matter how much money you have in the bank.
Photo credit: Rex Roof via Flickr.