If the first part of Twitter’s summer can be summarized as “scalability,” then the second half is shaping up to be “accounting.”
Twitter recently cut SMS service in some countries (not the U.S.) after negotiations stalled with providers there. While the perceived impact was exaggerated, the pushback from that decision sees the move as a sign that the microblogging giant is now counting pennies. Naturally, the focus of criticism once again turns to how and if Twitter can make money to keep the popular service afloat.
Ben Kunz wrote about the problems with Twitter business models in today’s BusinessWeek. The problem with the article—which did have an insightful debunking of the presumed potential for all social networks to be fully connected—is that the monetization plans critiqued as solutions assume traditional forms. Banner ads. Subscription services. By the end of the article, Kunz had valued Twitter users at $12.26 each.
Something new is happening, and the business models need to catch up.
New monetization paradigms
Last month, I speculated on a few other ways Twitter might find some positive cash flow. These included third-party data fees incurred by successful API developers and the kind of open source service model Brad Wheeler evangelizes. The most interesting model for me, though, is self-selected advertising:
Create corporate accounts for a fee and make it a requirement that all users select at least three to follow. The service won’t work (account is disabled) unless the member is actively subscribed to three or more.
This is Ed Dale’s “side-by-side marketing” in action.
While Kunz is probably correct about the practical limits on the number of people to whom any Twitter user can pay attention, there isn’t any discussion on the role these constraints play in the receptiveness to the message. Because the ads appear in the form of tweets and advertisers are members, the same follower dynamics will apply. Companies who spam content will be unfollowed and replaced with another advertiser. Better use of the channel will bring more followers. Advertising behaviors might arguably improve as a result of this self-selection of advertising.
The Power of Phatics
In 1960, linguist Roman Jakobson derived six functions of language from how the message operates on each factor of communication: context, sender, receiver, channel, common code, and the message itself. Much of the emphasis in ICT development is placed on the quality of the information (referential and metalingual functions) or identity (emotive, conative, and poetic functions).
Often overlooked, the phatic function is a sort of linguistic ping that serves to maintain connection to others. It can establish, extend or terminate connection between sender and receiver. Phatic messages are usually considered to be noise, disposable or even unnecessary. But to do so is a mistake.
Engagement is important when fostering community awareness because active learners are more accepting of new information than passive ones. Purely about engagement, phatics serve no other purpose than to seek connection with another person, either by requesting interaction or confirming active presence. While the use of Twitter is varied and content ranges from link sharing to conversation, at the heart of any post is the Are-you-there Here-I-am mission of the phatic function.
This is why leveraging the phatic nature of Twitter may be the best avenue for effective advertising by paying clients. Maybe Kunz’s arguments today—invoking the work of Robin Dunbar—should be applied instead to corporations and their consumer strategies: Is it possible for a company to handle more than 150 meaningful consumer relationships?