Directing Websites || Adam Gross

Five Reasons Why Ad.ly Will Not Survive

January 2, 2010 at 4:23 am Leave a comment

The November 22 New York Times article on sponsored in-tweet advertising intensified the ongoing discussion of this new practice.  Start-ups such as ad.ly and Izea will pay twitterers to insert ads into their tweets, acting as an ad exchange matching publishers and twiterrers.

Other good coverage has included Scoble (not in favor) duking it out with Chris Parillo (in favor) and a defense from Mark Suster, one of the VCs invested in ad.ly.

At the risk of trivializing these and other compelling discussions, there is a thread of “advertising is bad!”, “no, it’s not”, “it’ll ruin Twitter!” running through the discussions.  This is the wrong question; the right question is how sustainable and effective it will be.  Effective advertising survives. Gimmicky advertising dies.

Here are five reasons why sponsored in-tweet advertising is a gimmick that will not last.

1. Push vs. pull. This is essentially classic push advertising.  But social media is about pull. This tension will break down the logistics of “pushing” uninvited messages into personal streams. Are the advertisers able to prepare their twitterers to handle responses? (“@MyFriendJoe thx 4 telling me about phone promo.  Tell me more… “ ) Are advertisers prepared to allow the audience to control the message at all?  Can advertisers react quickly given both the speed of Twitter and a distributed set of twitterers, with who they may not have any direct contact?  How will this shade other social media initiatives an advertiser is executing? Are the marketing and customer service departments sufficiently aligned?
2. Short-term vs. long-term benefits. By acting as a mouthpiece for advertisers, twitterers use the platform they’ve built to earn cash.  But they’re decrementing their valuable assets (reputation) for short-term money. It’s like a homeowner borrowing against their home equity to buy Christmas presents as opposed to, say, a new kitchen that will enhance the home’s value. This is antithetical to social media, which is built to allow us to borrow against our assets to build more long-term assets: every time we post a link or join a conversation, we are advocating where people who have some level of trust in us should spend their time. Effectively, we are borrowing against our goodwill asset to further enhance our reputation or perhaps gain deeper insight. These might quantify themselves in the future as job opportunities or new clients, all of which are worth more tomorrow than even a few thousand dollars today. Quite frankly, this is short money for the advertisers, too.  Sponsored in-tweet advertising will not really build evangelists.  It’s the same as a CPM buy.  Okay, but social media holds much more promise. Seth Godin nicely articulates these points in Meatball Sundae.
3. Targeting and timing won’t work. A few years ago when I worked at BuyDomains.com, we tested inserting ads from an ad exchange on some of our content pages. Unfortunately, most of the ads were irrelevant and we earned little to nothing.  There just weren’t enough targeted ads for our somewhat arcane content.  The fact is, matching advertisers to publishers is complicated.  There’s approximately 25 mm monthly visiters to Twitter.com, and probably another 25 mm on apps.  And every one of those has a completely customized experience. So delivering the right message to the right person is going to be like shooting a basketball while the basket is moving.  Moreover, the basket is moving at the speed of light, which is roughly how quickly tweets fly in and we scroll through them.
4. Too easy to ignore. Users learn to filter out all forms of advertising they want to ignore. This format in particular will be easy to catch and ignore, since the exchanges seem to be doing the right thing and promoting transparency.  And what the eye won’t catch, new spam filters in your Twitter eventually will.  Regardless of whether this is technically spam or not, filters became ubiquitous in email for a reason and they catch a substantial number of non-spam emails, too.
5. More effective forms of monetizing Twitter will emerge. Sponsored in-tweet advertising is a quck and easy way to satisfy the desire to monetize Twitter today.  It’s like the easy Sarah Palin joke a comedian tells to transition to more compelling material.  I won’t attempt to capture all of the Twitter monetization ideas here, but, my god, every day, I log on and tell everyone exactly what interests me and what I’m hoping to learn more about. This data is so rich that a better mousetrap is bound to be invented that will render the gimmicks irrelevant.

I do concede that this may work with generic messages from celebrities, further separating the personal use of Twitter from the professional. And, if it’s an easy CPM buy, it could be easy for marketers to explan and get budget approval.  But, check out the MLM twitterers who blasted away thanks to the Times article. What does that tell you?

By the way, did you catch the ad I inserted into this post? The link to Meatball Sundae is an Amazon affiliate link, so I will earn cash if you click and buy it.  Do you care? Probably not, because I’m not inauthentically hawking the book.  It’s just a good book from a well-known author.  Am I willing to hawk the book so aggressively for a few cents that I eat away at the your trust? No, of course not.  So why would I do so on Twitter?

Entry filed under: Advertising. Tags: product, social, twitter.