Twitter, which for so long was criticized for its lack of a revenue model, is now firing on all cylinders as it looks to develop multiple sources of revenue. From Promoted Tweets to Promoted Trends, the company is no longer shy about trying to make a buck, and so far, Twitter users don’t seem to mind.
One big reason: Twitter has done a pretty good job at making sure its ads aren’t intrusive. And if it has its way, it might even make money while making Twitter users happier.
The other day, Twitter revealed its plans for a Twitter-operated account, @earlybird, which is essentially Twitter’s foray into the daily deal and group buying phenomena that have swept the startup world. Instead of offering its own deals, however, Twitter is trying to get a piece of the action by serving as a marketing platform for retailers and other companies looking to woo Twitter users with their hot offers:
Twitter @earlybird Exclusive Offers are special time-bound deals, sneak-peeks,
and events that are promoted by the official Twitter @earlybird account. We
partner with select advertisers and retweet offers that they have crafted only
for the Twitter community. Our advertising partners determine the terms of the
offer, including availability, amount, and price.
Twitter, of course, is paid by the advertisers, although it’s not clear how. Some sort of CPA model would seem to make the most sense, and if Twitter is successful in building up a following, it could have a hit on its hands. Dell, for instance, has already reported more than $6.5m in sales thanks to its tweeting. If @earlybird becomes a hub for retailers of all stripes to reach Twitterers ready to open their wallets, Twitter could make millions of its own.
As a big brand, Dell obviously had an advantage in building up an audience that it could tweet deals to. But not all brands and companies have a huge Twitter audience. That’s where @earlybird could be so powerful. With more than 18,000 people already following @earlybird even though it hasn’t yet tweeted a single deal, it appears Twitter may be able to build a sizable audience that companies of all sizes can distribute deals through, even if those companies aren’t on Twitter.
To start, Twitter’s deals will target the U.S. as a whole, but Twitter says it “will explore location-based deals in the future“, as well as category-specific deals (eg. fashion, music). Given how well location-based sites like Groupon have performed, Twitter will likely have to set up location-based accounts to really capitalize on the opportunity.
All of this said, there will be challenges. To succeed, Twitter will have to make sure that the deals it tweets make users happy; it certainly doesn’t want too many Groupola-like fails. And it will also have to make sure that users pay attention to its tweets. To do that, it will need to be careful not to create too many @earlybird shoot-offs for specific locations and verticals.
But perhaps the biggest challenge for Twitter is making sure that it does things right. @earlybird is a simple concept with a lot of potential. But with Twitter’s product pipeline quickly filling up, the company should recognize that if its reach exceeds its grasp by too much, it won’t be catching anything.
Photo credit: szlea via Flickr.