Twitter About to Alienate Users

The CEO of Twitter, Dick Costolo, told a press conference that his company now has 100 million users who log onto their accounts at least once a month. That is sufficient critical mass so that the social network can begin to sell enough advertising to sharply increase revenue. Twitter has 200 million registered accounts, but many people allow their activity to lie dormant. Costolo says the number of valuable active users is up 82% so far this year.

Twitter has two problems as it tries to increase revenue through advertising sales. The first is the simpler of the two. A person who uses Twitter only one a month is like a person who reads a daily paper or watches a daily news show once in a 30-day period. Advertisers want to get their marketing messages to people on a regular basis, whether it is to generate new customers directly or to burnish their brands. Costolo did not say how many people use Twitter once a day, and that may be the most important number of all if Twitter is to bring in really large amounts of ad revenue.

The second problem Twitter faces is that it is one thing to put ads next to Facebook pages or portal content. It is quite another to insert ads into 140 character tweets. Most marketing messages have to be at least 140 characters long, if the advertiser is to deliver any message at all. How will Twitter users feel when advertisers can overwhelm such an austere communications medium?

Facebook executives worried about what effect ads would have on their members. There was some revolt among users when ad messages became prevalent. That has died down, though. Ads run well off to the side of users pages or are part of interactive messages. Theses are barely intrusive at all. Twitter cannot use a similar structure to host marketers’ messages. To bring in revenue, it has to crowd what are already barren pages.

Douglas A. McIntyre