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Wednesday
Apr212010

Social Media’s Changing Landscape to Make A Profit

Admit it – you don’t like when things that you are quite comfortable with suddenly change. As social networks try and become profitable they are experimenting with new ad models and trying to drive more traffic to increase ad revenue. Twitter’s beta advertising model via "Promoted Tweets" and Facebook’s new Fan Page “Like” button (which is replacing the “Become a Fan” button) is buzzing with critics’ opinions. Are these changes good for nonprofits bottom line too? The jury is out.

Promoted Tweets: Will Tweeters Revolt?

Promoted tweets are what Twitter plans on offering to organizations that want to advertise on Twitter. The “promoted tweets” currently appear when people search for keywords on Twitter. Later, Twitter plans to show promoted tweets in the stream of tweets, based on how relevant they might be to a particular user, according to the New York Times. However, given the conversational strength of Twitter around shared interests, are users really interested in seeing ads inserted into their Twitter stream? Since Twitter has experienced exponential growth in the past two years, their popularity has also meant more noise and spam in users streams – noise people filter out. “If you haven't exhausted the potential of measurable initiatives like search and email marketing, why bother with an experiment,” said Peter Kim, Managing Director of the Dachis Group and former analyst at Forrester Research. Also, “advertising on social networks has a poor track record.” Kim has a point and success depends on your goals. If you are looking for solid acquisition (i.e. people that convert into long-term activists and donors), advertising on social networks is not where I would be investing a lot of money into right now. 

 However, one area that nonprofits could benefit from adding Twitter advertising into the mix is during emergencies and disasters. Jessica Kutch of SEIU said some nonprofits that fundraise around breaking news stories like natural disasters could reinforce their call to action or donation pitches on Twitter through advertising.

“From what I’ve read we still have to provide value to our community for the promoted tweets in the same way we always endeavor to provide value,” said Wendy Harmon who heads up the American Red Cross’s social media. Harmon said Twitter ads could be helpful in responding to a disaster if they were able to tweet any of the following and have it be “promoted” beyond their followers:

  1. an action item for volunteers
  2. a way to get help
  3. a way to give help

However, if a large organization like the American Red Cross we’re the center of attention during a natural disaster on Twitter like they were after the earthquake in Haiti, how valuable will promoted tweets be? “I don’t think we can forecast this yet,” said Harmon.

Do you “Like” My Fan Page?

Facebook just unveiled a new way of interacting with Fan Pages in order to grow fan page traffic. Users will now “Like” a Page to become a fan of it instead of fanning it. This is good news for nonprofits that want to grow their fan pages in terms of numbers because it lowers the barrier of committing to being a big fan. However, if you are looking for quality over quantity, I’m not “liking” this new move by Facebook.

“My concern is that now that people are "used to" liking something [which is] just a quick thumbs up in passing….may cause a backlash of sorts - or a reticence to “like,” said Dottie Hodges of Northridge Interactive on a recent listserv exchange.

Carie Lewis, who heads up the Humane Society of the United States social media agrees. “I’m also concerned about quality vs. quantity… I’d much rather have 5,000 engaged, active “fans” rather than 50,000 people who just “like” us. We shall see… we’re going to be paying close attention to our FB insights in the coming weeks for sure!”

 

You should follow Frogloop on Twitter.

 

 

Reader Comments (4)

Excellent post. Thanks for starting the discussion.

In Twitter's case, this totally changes the permission boundaries involved in using the service. As such, it will change the value of using Twitter over time.

Currently, users still have relatively tight control over what is iin the tweet stream they listen to.
There is also the perception that their tweets are broadcast to a self selecting audience.

However, that all changes once Twitter can place items in your tweet stream and can use your tweets as a data point to serve up an ad to someone in your audience. The nature of your relationship to your audience is altered.

There is an interesting article in the New York Review of Books from a few months ago that touches on how permissioning affected the growth of Facebook vs. MySpace.
http://www.nybooks.com/articles/archives/2010/feb/25/in-the-world-of-facebook/

If the people feel that the changes in permissioning change the control they have over their conversations, the value of tweeting as an extension of your organization online will diminish.

It could still be useful for connecting with advocates, donors and your audience, but it wouldn't be as compelling as it is now.
April 21, 2010 | Unregistered CommenterMark Phillips
Mark - thank you for sharing this. I think you raise some excellent points and like the way you frame "permission boundaries."
April 21, 2010 | Unregistered CommenterAllyson Kapin
I was at Chirp - I'm a Twitter developer. Yes, it's too early to say exactly how Promoted Tweets is going to work out, but Twitter has the analytics horsepower to make it work. My recommendation would be for at least the major non-profits - the Red Cross, Doctors Without Borders, United Way, etc. - to approach Twitter executives and get the dialogue going.

I'm not sure how to go about that - all the Twitter execs are actually on Twitter, so a simple tweet to @ev or @biz or @dickc might be the way to start. ;-)

@znmeb
April 22, 2010 | Unregistered CommenterM. Edward (Ed) Borasky
Great convo, Allyson -- it's going to be nearly impossible to "game the system" for the foreseeable future as Twitter, FB, etc. go through rapid gyrations to "monetize" their product. Witness Ning.

I would expect most of these changes to not be aimed at making the product more usable or useful -- we are not the audience. The investors are. We're more like free labor.

Any network that is built on venture capital or angel investment and that hasn't turned a profit yet -- time to buckle up and hang on...
April 26, 2010 | Unregistered CommenterMark Rovner

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