Twitter’s Advertising Problem

Twitter’s slow-walk into the advertising business is applauded by many in Silicon Valley as a textbook example of how a tech service has to put its user experience above a business model. Indeed, Twitter’s valuation keeps growing exponentially, even as its ad business remains extremely immature. The last thing Twitter or any hot service wants to do is “pull a MySpace” and litter the place with cheesy ads.

“It sounds like they were waiting for their users to get comfortable with this, but I keep wondering what is the real reason Twitter is taking so long,” he said. “You don’t need a year or longer to get people used to having some kind of advertising.”

The problem with Timely Tweets, according to Berkowitz, is it’s preaching to the choir. Twitter is adamant that it will build ad products that mimic how the service is used. That’s why it’s trying desperately to do ads that aren’t really ads. They’re actually just normal updates that brands make. This is, of course, a bit of a dodge. Take Promoted Trends, probably Twitter’s most successful ad foray. The notion is these are already existing trends that are taking place. That’s not really true. Brands are creating these most times out of thin air.

And that’s fine. It’s advertising, after all. Advertising will remain, even in social media, to some degree an interruption. Many Silicon Valley companies turn their noses up at the ad business altogether. There’s talk that even within Twitter there are factions who see a much larger mission. After all, President Obama credited tweets, in part, for helping to resolve the debt-ceiling impasse. Catering to media buyers seems like small beer compared to that.

“They want to show that they can do incremental things that result in exponential increases,” he said.