If Twitter Go The Advertising Model Way, They Might Hit The Jackpot

There are wild guesses all over the blogosphere as to where Twitter is headed when it comes to its business model. It has certainly become an obsession to talk about it in some circles, and the air is filled with speculations — from Calacanis’s advertising/subscription model, through TechCrunch’s pro/business or sponsored suggested accounts model, to the hilarious downtime advertising model.

Wherever it may eventually go — and my bet is it will be a mixture of pro accounts and advertising — the advertising model in Twitter might be something very innovative, both in targeting and delivery.

Targeting – Easy Semantics and The Realtime Factor

Targeting a Twitter user is very convenient. They don’t have to assume or speculate anything about a user, they don’t have to track cookies and collect Behavioral Targeting data and try to determine if a user is action prone or not, or try all the other good old targeting tricks, such as geo-targeting and figuring household income. The simple nature of Twitter messages, which is very short and informative, makes them very easy to process semantically — aside from lolspeak and l33t, sentences are simple, usually noun/pronoun-verb-adverb-adjective. And the best part is, the user gives information about himself voluntarily — location, likes and dislikes, actions performed, etc.

Take me for example, in this imaginary (but could-be-true) scenario:

  • In SFO, waiting to board flight for JFK. Coffee anybody?
  • Just saw the new Pearl Jam album, love them!
  • @johndoe Let’s meet later this evening for dinner

Do you realize how much Twitter knows about me in the 5 minutes I tweeted these three? They can advertise to me flight tickets, coffee in SFO, Pearl Jam and similar music, and places to eat dinner in New York.

Now, you might say that Facebook or other social networks can provide similar targeting, but the realtime nature of Twitter makes it even more powerful. I might ditch Pearl Jam in a month in favor of Soundgarden, and Twitter will know that immediately. I might be in a conference and suddenly crave a steak. The relevance of the advertising is much better when my realtime wish or craving is in the equation.

Delivery – Unobtrusiveness and Flow

The way Twitter will deliver the ads will have a very high impact on the user responsiveness to the advertising. And the fact that Twitter has an open API and a lot of users using 3rd party clients to access it, will force them to embed the ads in the Twitter stream. They could be “full tweet ads” or they could be “tweet-appended ads”.

For example:

  • In SFO, waiting to board flight for JFK. Coffee anybody?
    • From twitter: Drink Coffee at Starbucks@SFO!
    • From twitter: Next time, save on airfare with MyImaginaryTravelAgent!
  • Just saw the new Pearl Jam album, love them!
  • @johndoe Let’s meet later this evening for dinner

Or:

  • In SFO, waiting to board flight for JFK. Coffee anybody?
  • Just saw the new Pearl Jam album, love them!
  • @johndoe Let’s meet later this evening for dinner
    • From johndoe: sure let’s eat a steak! (From twitter: check out the SteakHouse on 5th and 34)

I’m For It, The World Is Ready

I would not care receiving both these forms of advertising, if they are well integrated in the flow of my Twitter stream, and especially if they are so well targeted. I believe the semantics tools today are good enough to process meaning from a user’s short and simple under-140-characters sentences, since there is no hard contextual analysis to perform. And the realtime factor makes the targeting temporal-aware — they know what I need when I need it. Regardless of what payment model they choose (CPC, CPA, CPM), the targeting and delivery methods are the winners here.

There, I’ve contributed my part to the Twitter business model obsession.

Startups Are The Marines Of The Business World

I recently finished watching Generation Kill, a 7-episodes HBO mini series depicting the advancement of the Marines 1st Reconnaissance Battalion during the war in Iraq in 2003.

Without going into the many political, social and human aspects to the series, what struck me the most was the remarkable resemblance between the Marines activity in their world, to the startup activity in the business world. As I was watching the series, I felt there were 3 main themes I could relate to, and that were analogous to the unique day to day life of a startup company.

Observe Everything, Admire Nothing

While advancing through enemy territory, the Marines are ordered to pay attention to all details, but not to settle their eyes on any one point for too much time, because it can lead to distraction or numbness.

Same goes for a startup company which advances in the competitive market, and should be aware of all aspects of its activity, and yet have no time to go into research and development in fields that are not its core business (as a corporate might).

Marines Make Do

While the other army/navy/air force branches of the military have excellent supplies, Marines have to settle for the equipment they have, and manage to pull through using nothing more than what was readily available.

Same goes for startups, which as opposed to corporates, operate most of the time on a low budget and try to keep a low burn rate, and have to get by with what’s at hand and no more than that.

The Vision Is Clear, The Mission Is Constantly Changing

While the vision of the war is clear to the Marines, the mission is constantly changing. One day you storm an airfield, the other you police civilians in a city. Moreover, it seems that in military terms, there is nothing more agile than a bunch of troops mounted on light humvees.

Same goes for startups, which have a very clear business vision, but usually work in a constantly changing market which dictates a constantly changing mission. One day you develop a feature for your product, the other priorities dictate it’s business development time. And in the business world, no company is more agile than a startup made up of a bunch of entrepreneurs with a clear vision.

Well, stay frosty!

TechCrunch Cashing In on CrunchBase

TechCrunch just announced that they have a premium report of an analysis of 2008 according to data gathered on CrunchBase. The report is available for $149, and includes data about startup financing, products, trends and exits.

Two things strike me here.

First, CrunchBase is finally proving as an asset, with TechCrunch cashing in on its non stop data gathering. Whether or not this is moral is a point to argue about — after all, it is a wiki, most of the data is community driven. But in any case, the TechCrunch empire has another income stream, unrelated to the traditional media advertising revenue stream.

Second, we all know the downturn is here, but put visually through the graph of the number of founded startups per month:

From 170 to 20 in 1 year. Phew. But then again, this can also be seen in an optimistic perspective — the market is now less competitive for startups, and if you’ve got the funding and the business model, you might get through this survival of the fittest battle with a winner.

TVinci’s Break

It’s always nice to hear about people you personally know who succeed in the world of hi-tech and venture capital. That is the case with the guys over at TVinci, who just secured $1.6M in funding from angels Zohar Gilon and Ron Tamir.

Although their blog is down (probably due to the massive techcrunch, vccafe and techaviv coverage), TVinci offers something which is usually overlooked on product development – a full blown user experience. With background in creative solutions development for UI at frido, the team that founded TVinci is all about user experience and user interface.

Sometimes a product succeeds because it is groundbreaking, a completely new idea or a phenomenon that appeals to a large target audience and is viral in its essence (did somebody say twitter?). But sometimes, it is enough to take something very basic, give it a different angle or a never-before added value,  and come out with a winner product.

And I think this is the case with TVinci. They take a very basic service, which is video consumption, and they turn it into a turnkey solution for the publisher on the one hand, and a full blown video experience for the consumer on the other hand. They’ve already done so on Reshet (an Israeli TV broadcaster) MTV Israel, MTV Poland and Orange Israel.

I am not fully aware of all competition in this space of turnkey video solutions for media organizations (qumu might be one), but TVinci sure looks like a very appealing product which maximizes the video consumption experience of the viewers and thus helps publishers retain and engage their customers more effectively.

I am not sure where they are going to direct this round of funding, but wherever they do, I am sure they can take their product sky high.

Congratulations to Ofer (and Moran)!

TVinci's Break

It’s always nice to hear about people you personally know who succeed in the world of hi-tech and venture capital. That is the case with the guys over at TVinci, who just secured $1.6M in funding from angels Zohar Gilon and Ron Tamir.

Although their blog is down (probably due to the massive techcrunch, vccafe and techaviv coverage), TVinci offers something which is usually overlooked on product development – a full blown user experience. With background in creative solutions development for UI at frido, the team that founded TVinci is all about user experience and user interface.

Sometimes a product succeeds because it is groundbreaking, a completely new idea or a phenomenon that appeals to a large target audience and is viral in its essence (did somebody say twitter?). But sometimes, it is enough to take something very basic, give it a different angle or a never-before added value,  and come out with a winner product.

And I think this is the case with TVinci. They take a very basic service, which is video consumption, and they turn it into a turnkey solution for the publisher on the one hand, and a full blown video experience for the consumer on the other hand. They’ve already done so on Reshet (an Israeli TV broadcaster) MTV Israel, MTV Poland and Orange Israel.

I am not fully aware of all competition in this space of turnkey video solutions for media organizations (qumu might be one), but TVinci sure looks like a very appealing product which maximizes the video consumption experience of the viewers and thus helps publishers retain and engage their customers more effectively.

I am not sure where they are going to direct this round of funding, but wherever they do, I am sure they can take their product sky high.

Congratulations to Ofer (and Moran)!