Charging companies for Twitter – what could it involve?

Posted February 17, 2009 in social media, strategy  |  No Comments so far

You’re probably aware that Biz Stone, one of Twitter’s co-founders, told Marketing magazine on February 10th that:

“We are noticing more companies using Twitter and individuals following them. We can identify ways to make this experience even more valuable and charge for commercial accounts”

How to decode this quote? It’s fairly vague, but I can think of a few possible charging models that Twitter might adopt. I’ve listed three of them here:

1) “Twitter tax”

Twitter will try to identify accounts that are run by companies rather than individuals. It will then attempt to extract money from the owners of these accounts. Failure to pay will result in closure of the account.

I don’t think this is very likely, however:

  • Distinguishing companies from individuals would be extremely difficult. A lot of anger come from those who felt they’d been unfairly classified (e.g. if you’re a consultant and you discuss professional topics on Twitter, are you a “company”?)
  • No value would be added for those who pay
  • A lot of genuinely handy and non-revenue-generating information services would vanish from Twitter, diminishing the value of Twitter as an information utility
  • This diminishing of Twitter’s usefulness would lead many people to desert the service.

2) “Singling out the marketers”

Like the first option, Twitter will identify accounts that are run by companies. However, it will draw a line between companies that use it for information services and those who use it as a sales channel. Companies who use it as a sales channel will be penalised while those who use it for information services will not.

This is a bit more viable than option 1:

  • Distinguishing sales from servicing would be easier than distinguishing companies from individuals. Rules could be defined, e.g. if you are seen to link to product pages or talk about offers or sales then you’ll be penalised
  • It would allow services that people find useful to continue – e.g. getting news updates from the BBC
  • It would encourage companies to use the service in an “ethical” way while heavily penalising spammers
  • As a result, there would be a lower risk of people leaving the service.

3) “The enhanced service”

Twitter will not try to distinguish companies from individuals. However, it will create an “enhanced” account which will provide additional features at a cost. Companies will be free to keep using the “basic” service if they want to.

This is the most likely option, I’d say:

  • The challenge would be to come up with features that would make a paid account compelling
  • These could include things like offering brand protection (the account is marked as ‘official’), ecommerce features (people being able to pay over Twitter), advanced analytics (see reports on your followers and their behaviour etc), tracking abilities (find out how many people clicked the link in the last message you sent, etc)…
  • This would add value for people who chose to pay
  • There would be no need on Twitter’s part to pay people to detect and penalise companies
  • Things like news feeds and so on would continue to operate, meaning that the usefulness of Twitter wouldn’t be too diminished.

Most of the commentary I’ve read so far seems to assume that something akin to the first option, the “Twitter tax”, would be introduced. But Twitter surely realise that it would be costly to implement and would seriously impact their growth rate. An enhanced service for which companies or individuals could pay is far more likely.

In particular, keep an eye out for commerce features. Pay-by-Twitter might seem far-fetched at the moment but as the service becomes ever more pervasive a compelling user need for that service will begin to emerge.

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