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Understanding Twitter's Failure To Monetize Its Brand


The August 2, 2016 edition of the Wall Street Journal had an interesting opinion piece by Christopher Mims,"Twitter Fails to Harness Its Importance." Mims argues that Twitter fails to turn a profit because it fails to control where its content appears. Here's Mims' logic:
  1. The main utility of a Tweet is on the consumption side - people tend to read them not create them
  2. Readers get the content mostly outside of Twitter, not inside it (313 active users vs. 800 million people actually reached monthly)
  3. Twitter knows this, but its "enhancements" don't get to the root of the problem, which is controlling the environment where users access content
  4. Third party developers are doing a better job than Twitter of serving up Twitter's own content - pulling users away
  5. As a result of leaking content to third parties, Twitter fails to turn a profit.
While this argument may seem logical on its face, it is flawed in three ways:
  1. Social media is inherently about sharing content, not controlling it. Trying to control a Tweet is like trying to choke firefly in a football field.
  2. Seemingly controlled-content environments are actually fairly uncontrolled due to the free flow of social interaction that takes place there. For example, people don't want to see a cut-and-paste of Facebook comments; they want to situate themselves within the flow of conversation.
  3. Content providers become valuable based on their ability to leverage a brand, not a commodity-level ability to deliver opinions, research, etc. For example, the Huffington Post brand signifies "a mainstream view" regardless of who actually authored a particular post.
Twitter is a valuable brand - so valuable in fact that a Presidential candidate has built his entire campaign on reaching people through his verified status updates. Based on that and the other factors above, here is an alternate model for Twitter to reach profitability.
  1. Leverage the brand. The overarching framework within which Twitter can make money involves leaning on its name, logo and what those signify. Bottom line a Tweet is an in-the-moment status update from a real human being, any human being, from the President to a grade-school student; from Milwaukee to Marrakesh.
  2. Respond to user demand for identity verification. Twitter has been astoundingly lazy about jumping on the articulated demand by consumers for a way of verifying their handle. With so many impersonators, trolls, spammers and hackers out there, I can't imagine why they don't charge $25 per user per year to verify and protect your account. This would also make Twitter a more valuable property because it would cut down on irrelevant and even harassing statuses, which have in some cases driven users off the platform.
  3. Co-sponsor verified Twitter "conversations" with entertainment, political and other brands. Right now television shows and news broadcasts routinely ask users to Tweet questions in. This is homemade usage of the platform. Twitter could no doubt work directly with such entities to create a richer user experience with polling, directed conversations, etc. and also an easier experience for those who find it difficult to participate. Twitter could even create a device for home use that lets users interact with their TV screens only over the Twitter platform.
  4. Let advertisers pay for users to feature their logos on personal banner pages.People like to "dress up" in their favorite brands. Advertisers should be able to give Twitter a code that users can cut and paste into their header, making a certain logo appear. For every 24 hour period a user features this coded logo on their site, Twitter gets a small fee from the advertiser.
The bottom line: Break out of commodity competition. Thinking "brand first" is a critical and often overlooked way to address deficiencies in one's business model.
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All opinions are the author's own.

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All opinions my own. Originally posted to Quora. Public domain photo by hbieser via Pixabay.