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Rory Cellan-Jones

Magpie - touting your Tweets

  • Rory Cellan-Jones
  • 24 Nov 08, 09:35 GMT

Just about every Web 2.0 firm has got a business model which depends exclusively on advertising - and right now a lot of those plans look very shaky, as online ad revenue starts to flatten.

Woman using her mobile phoneWhat that means is that millions of users of everything from social networking sites like Facebook and Twitter to video sharing businesses like YouTube and Seesmic may find those services either more annoying to use - or may see them disappear altogether. The days of free content with no ads and no aggro are drawing to a close.

So why am I just a little troubled by an advertising scheme which could make Twitter - a social network where I spend far too much time - more viable? The scheme is called Magpie, and it encourages Twitterers to sign up and then act as a vehicle for small ads to be inserted alongside their tweets. The deal is that they match keywords to your "tweets", then post "magpie" tweets in your name with adverts, and you then get paid for that. I was struggling to understand how it worked and asked my Twitter followers - one explained it rather nicely.

"It's a very simple three-stage process. (1) Sign up to Magpie. (2) Ad-tweets appear in your stream. (3) All your followers block you."

That of course is the problem. We, the users, don't see Twitter as a business but as a place where we go to hang out and talk amongst ourselves. If you met a friend in the pub and he casually inserted into the conversation "thought of taking the Daily Beast? you really should - there's a free DVD with every copy...", you would quickly decide he was a friend no more.

But of course Twitter does need to start earning some money pretty quickly if it is going to survive in these difficult times. The trouble is, Magpie is not owned by Twitter - it appears to be a joint venture based in Berlin and Birmingham - and it isn't clear whether any share of the revenues from these ads will head off to California to the firm which actually makes them possible.

Somehow the owners of everything from Faceboook to Twitter to YouTube are going to have to find ways of monetising them more effectively. But turning social users into online billboards sounds a surefire way of losing their custom - so you won't be finding any Magpie ads in my twitterstream.

Comments

  • Comment number 1.

    As long as the advertising is relevant I'm open to it simply because I want Twitter to survive!

    Birmingham and Berlin - not there's an eclectic mix!

  • Comment number 2.

    If you did some research you'd find online spending on adverts is actually growing this year, even with the credit crunch spending is up around 25% on last year.

    Also any English firm is generally being paid in dollars for ad spend so in the last month has seen a rise of 25% in profits from adverts.

  • Comment number 3.

    The economy is in trouble because of the Internet anyway.

    The Internet bubble burst in 2000, which caught a lot of people unaware - mostly those same people who had re-mortgaged their homes several times because they thought the bubble would just keep on getting bigger.

    When the (Internet) bubble burst, a lot of people lost their jobs and couldn't keep up repayments on their mortgage, which eventually caused the house market bubble to burst.

    Now the Internet companies are getting effected by the housing bubble which they themselves are responsible for starting.

  • Comment number 4.

    Of course, Magpie won't earn twitter a penny. That money would go to the user - and any distain should be directed their way too.

    Pownce has a model that slips in sponsored messages every so often. When it's clear it's the platform insterting the sponsored messages, then I think it's easier to tolerate them.

  • Comment number 5.

    Spending may be up but with a 25% cut in the exchange rate...
    Twitter does need to find a business model, but the magpie route is one that I also believe will kill it.

    Sure we need to be open to adverts, because of the free content on my site I have seen traffic quadruple in the last 12 months and bandwidth costs have gone through the roof - I now have to make a business decision - adverts or less content?

    So what is the way forward?

    Ads on the twitter page that are context driven? Like many blogs - that seems fair - ads that are driven by and for Twitter not users, and ads that are not cloned to look like posts.

    http://twitter.com/rapidbi

  • Comment number 6.

    Several surveys have found that a large proportion of Twitter users would be willing to pay a subscription for the service.

  • Comment number 7.

    I would be more tolerant of magpie had it been a twitter initiative and provided a range of options including picking your adverts. Since nothing goes to them, I would be unhappy with #magpie in my stream.

    Rory I think you are right on the money when you say that "turning social users into online billboards sounds a surefire way of losing their custom".

    http://twitter.com/rishil

  • Comment number 8.

    not being a twitter user myself I can't say I am affected there, but it's the same everywhere, ad-free is pretty much dead to busy sites which is a shame

    * BUY MORE THINGS - CONSUME*
    seems to be the prevailing message, thing is, I don't need advertising stuffed in my face everywhere I go thank you, I have free will and should I buy something it will NOT be because of advertising.

    Reminds me of the film "They Live"
    CONFORM ... OBEY ... CONSUME ... SUBMIT ... WATCH TV ... DO NOT QUESTION AUTHORITY ... MONEY IS YOUR GOD and of course, NO INDEPENDENT THOUGHT.

  • Comment number 9.

    As duly noted by Rory, Twitter is the equivalent of having a coffee or a beer with both friends and 'authorities in their field' alike.

    By combining Twitter with the Twhirl desktop app, I receive Tweets as small bubbles of useful information, as and when they are posted. I can then respond or make use of them as necessary.

    Magpie and the likes of Adjix (Twitter url shortening and tracking, with added ad serving) take what is a simple, user-controlled, personalised news and conversational service, and add what I can only describe as traits similar to unsolicited mail and phonecalls.

    What make this all the more unpalatable is that some of those that I follow (and I follow them for good reasons) may now cross over the line to the 'dark side' and start poking me in the ribs with unwanted ads every know and then.

    A great way to lose my trust and respect.

    Twitter does need to find ways of generating revenues - but this isn't it.

    Mark Ramskill
    http://twitter.com/ramskill

  • Comment number 10.

    As an additional comment, regarding Adjix, at least their service allows you turn to turn off ad serving, to become a straight url shortening and tracking application.

    By granting me this choice, they gain my respect.

  • Comment number 11.

    Looking over the CPM model, I think there is a major flaw in the way the value of a twitter account is valued by magpie. http://www.latitudegroup.com/weblog/permalink/the_flaw_in_the_magpie_guest_blog/

  • Comment number 12.

    Twitter is just a bit of fun anyway.

    I don't really see how anyone would miss it if it was gone.

    If companies use it to do business, i.e. earn themselves money, then more fool them.

    twitter.com/scotbot

  • Comment number 13.

    Scotbot, you are rather missing one of the main points of Twitter, if you do not understand why companies use it for business.

    Yes, it can be used for fun and engaging with friends, BUT . . .

    Where Twitter excels (and this is the main reason I use it), is as a great way of following and engaging with, in real-time, the world's top bloggers and top websites (Seth Godin, Mashable, Techcrunch, DoshDosh, BBC, CNN etc in my case, as an example), all of whom use Twitter constantly.

    When these guys start picking up on the Twitter traffic you are generating and start following you, you then have an extremely strong listening audience who could raise the profile of your business immensely.

    Just look for the authorities / key influencers in your niche or sector, add them and if what you have to say is relevant to them (they'll find you in other peoples Twitter streams and wherever you choose to promote your Twitter profile), they'll start following you.

    I've written an article on how to 'Smart Twitter' here:

    http://www.subhub.com/articles/twitter-the-smart-way

  • Comment number 14.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 15.

    As Michael Arrington says, it is Pay-Per-Post for Twitter, and it sucks. Unlabelled product placement might be fine for low-rent US TV but this just feels like selling out, and cheap selling out at that.

    Kudos to the Magpie team for having an idea and executing it, but I think Twitter will axe this just as soon as it starts to roll out its own revenue model, much as Apple nixes certain iPhone apps that compete with proprietary apps / features.

    PS - I used to be pretty much anti-Twitter but hook up with like-minded folks in your industry and it becomes invaluable. It's now the first website I open in the morning. An excellent filter, and communication tool.

    www.twitter.com/lakey

  • Comment number 16.

    Good post.

    I guess the problem here, is that with the online space, as a business grows and becomes more popular, it can be difficult to ramp up the customer service side at the same rate (especially if specialised training is required).

    This can lead to issues that we're all more than aware of, such as lack of response to emails, curt replies, long waiting times etc.

    A lot of online businesses are new, are still learning and when confronted with an influx of customers (a Techcrunch review can make or break a site, in terms of visitors), can quickly show the strain, unlike established offline businesses that have the necessary processes in place to provide good customer service.

    Another issue, is where a site is developed initially by techies, for a small niche audience, find its becoming popular, realises it can become a true business, then tries to implement revenue streams without the right business support, and with the wrong mentality from the business founders.

  • Comment number 17.

    @marrams:

    I'm not missing any point. I understand the business case as in driving traffic to your site / product / blog, etc.

    But most Twitterers aren't business users, rather ordinary people just having some fun.

    If it wasn't for this commentariat then there wouldn't be a business case to use Twitter at all, since there would be no one using the site worth pitching at.

    Twitter as a feed aggregator only exists because there are people who use it, and for most people that's only the case because it is free.

    Make them pay and it ceases to become fun, and hence wouldn't really be missed.

    Alas anyone betting the farm on Twitter clearly doesn't understand the risk of putting all one's business eggs in the same basket.

  • Comment number 18.

    I could see Tweeter surviving off a modest subscription model of say $1 a month, but I don't see a per-tweet payment model working. Either way, you run into the same problem that every for-pay web service has run into: there is no infrastructure in place for micro-payments, and probably won't be until a major player like Google or Yahoo goes for-pay, which would be commercial suicide so will never happen (well, Yahoo is halfway there, so perhaps they could take the hit for the rest of us?).

  • Comment number 19.

    I deleted my twitter account a while back.

    I do however use identi.ca (http://identi.ca)

    It works just the same, but it's open-source - and I believe there is a bridge between them to help you crossover to identi.ca

  • Comment number 20.

    Personal recommendations can work. Many products thrive and many sales are made precisely because of this: people place a lot of trust in the opinions of friends and family - and you should never underestimate peer pressure.

    But this is plain wrong and undermines the service. Anyone who signs up deserves to be blocked, IMHO.

    Of course, this is nothing new. I seem to recall a similar sort of service: http://news.bbc.co.uk/1/hi/business/1496213.stm

    But I don't think that ever took off in a big way.

    I have a wide definition of 'spam' - and it's just got wider.

  • Comment number 21.

    As users shun the more traditional methods, online advertisers and marketers are increasingly looking at other ways to engage users on social networks, not, it seems, without some success: http://scobleizer.com/2008/11/26/social-network-advertising-not-your-fathers-banner-ad/

  • Comment number 22.

    iPhone users already have ads in the twitter streams from Twitterific etc etc . If you don't want adds from the vendor you pay £4.99 for the app.

    This is the way forward for twitter, however twitter unlike other mediums has has an instant take up form the tech community for announcements and news flashes.

    The way forward for twitter is a free service for personal use or a monthly fee for profit making organizations and their streams are ad free or they get adds in their tweets. That way is people start dropping off then they'll look to say for the non advert service.

    Surely someone like Engadget or TUAW ( who's feeds i follow ) their streams would be very valuable as you know the demographic of the people who are following them.

    Just think this through and it is workable.

  • Comment number 23.

    I'm not a Twitterer myself (just can't see the *point* of it) but the problems with monetising internet content I do appreciate. The majority of people I know (myself included) now use Firefox with AdBlock Plus to turn their browser window into the online equivalent of Sao Paulo.

    I rather like being able to surf without being constantly harangued with the increasingly tasteless 'spend money, buy stuff!' messages that mean I now watch very little TV.

    Especially when that 'stuff' is diet drinks and products being advertised on a fat acceptance / eating disorder support page, or for that matter to anyone on Facebook who enters their gender as 'female'.

    There's quite an online backlash brewing against that, and companies like Twitter would do well to take heed and find another way (Wiki-style donations?) to stay in the black.

 

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