SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Archive for April 14th, 2011

Twitter’s Biggest Problem: Tweets are Ads

Posted by Bob Warfield on April 14, 2011

Today seems to be bash on Twitter day:

–   Trouble at Twitter is a Fortune article talking about how Boardroom antics, CEO switches, and other distractions are keeping Twitter from progressing.

–  Twitter turned down a $10 Billion offer from Google, and the Business Insider claims that although they have 200 million registered users, only 20 million are active.  If Larry Page comes back again, they admonish Twitter to take the money and run.

There is a tiny dose of positivity (hey, sometimes you have to make up a word) in the form of people loving new Twitter mobile client Tweetbot, but it is tinged with almost totally offsetting negativity by fretting over whether Twitter’s Draconian “Write no Twitter clients policy” will let it survive.

Twitter has always been a love hate sort of service.  Some people can’t imagine what good it serves and some can’t imagine ever being without it.  I guess I’m somewhere in the middle, but I do think Twitter has one huge problem on its road to significant monetization:

Tweets are ads

There, I’ve laid the grenade on the table, sans pin.  Before we get started analyzing the premise of whether Tweets are ads, I’m sure we ought to spend a little discussion on why this is a problem.  The answer to that one is pretty simple–would you want to pay for advertising in the middle of a sea of free ads?  For the most part, don’t you capture most of the value by just firing off a salvo of your own free ads, er tweets?  The problem is diminishing returns and inventory.  To want to pay to run an ad among ads, you’ve got to want to be seen pretty badly and you need to run an ad that really sticks out.  Like the Dickbar, for example.  Unfortunately, there isn’t a lot of inventory available for big noticeable ads and Twitter’s users hate them.  Other than that, it’s a pretty good idea, but not one that will deliver $10B valuations.  Still, all sarcasm aside, you can see why they had to try something like that if you think Tweets are Ads.   How else to be seen in a see of other ads?

Go through the classified advertising sections in what few print periodicals are left.  There are very few ads there.  It’s not a happy place for ads, curiously enough, even though you have an audience spending time there because they presumably want to buy.  It’s not happy because of the inventory and cost problem.  Simply put, there is a hole in the middle of the continuum between cheap (just run a classified or type the darned Tweet) and getting seen (run a big ad that is much noisier than the classifieds or tweets).  That’s not to say you can’t run effective ads there, as I say, people reading classifieds presumably are looking to buy something.  But there is not enough inventory to sell there to make it all that lucrative and what inventory you do have must be pretty high-priced.  Contrast that with something like Facebook.  There you are running ads in the middle of a water cooler / friends chit-chatting conversation more so than amid other ads.  It’s still not really ideal, but it is much better, hence Facebook is making a lot more money relative to their participation.

Okay, if you assume Tweets are Ads, you can see Twitter’s problem pretty clearly.   But are Tweets really ads, for Heaven’s sake?

The short answer is, most but not all Tweets are ads.  You have to admit that every bot-generated Tweet is essentially an ad.  “Come read my new blog post!”  That’s an ad, let’s be real.  Or, perhaps to be more precise, it isn’t an ad to the industry because you didn’t pay for it.  It’s more like PR or a press release.  Nevertheless, functionally, it’s an ad.  It’s a message you put out there to drive traffic.  Heck, with only 140 characters, you can’t hope to do much more than drive traffic.  There aren’t enough characters there to actually inform anyone of anything momentous.  There’s certainly not enough there to convince.  Your only hope is to create enough shock value to get people to click a link and look further.  Isn’t that starting to sound an awful lot like what an ad does?

Are Retweets ads?  Well, depends on the Retweet.  It’s sure hard to argue that when you RT every darned Tweet that mentions you, your products, your company, or anything you ever Tweeted, Blogged, or said in a private inner dialog that you aren’t advertising.  I mean come on, we’re back to doing what those darned bots do.  Where’s the creative insight in that?  Twitter doesn’t even let you comment on the RT when you use their button, you’re just rebroadcasting someone else’s message to your flock because you happen to like or agree with it.

Try this experiment.  Stop what you’re doing right now (i.e. quit reading this blog post), go to your Twitter account, and scan the first screen.  Be really dispassionate.  How many of the Tweets there could be called ads in the sense I’m using it?

As I write this, my first page has 15 Tweets focused on just a few subjects:

– I got 5 repeats that are identical.  They say “Twitter’s Troubles” and link to one of the articles I gave above.

– I got 5 that are identical and say, “Tweetbot enters the IOS Twitter client fray” with a link to that article.

– I got 5 that talk about ‘Microsoft flexing IE9 muscle”

These are all bloggers and follower-seekers of one kind or another.  They’re all saying exactly the same thing.  They’re probably automated they are so darned similar, although I’m not personally familiar with the tools that do that.  Disclaimer:  I was shocked to see so little variety.  There are times when I do see long runs like that, but subjectively, I’d say it is more like 80% ads, 20% valuable insights than this sample would imply.  Nevertheless, since it is bash on Twitter day, I was happy to be able to make my point.

These are all ads.  Twitter’s problem is that when the vast majority of your content is advertising you give away for free to get participation, it’s going to be very very hard for you to sell additional ads on top of that for revenue.


I was tempted to call this post “The Trouble with Twitters” but there probably aren’t enough Trekkies left in the world to have any idea about Tribbles and Twitter, so I contented myself with the photo.

Zoli Erdos points to a bit of Twitter Schadenfreud I missed.

Posted in Web 2.0 | 7 Comments »

Give Me a Layer to Stand On, And I’ll Move You to the Cloud

Posted by Bob Warfield on April 14, 2011

This post is on  behalf of the Enterprise CIO Forum and HP.  This is my first in a series of posts sponsored by Enterprise CIO Forum and HP, thanks for the sponsorship!

Apologies to Archimedes, who is supposed to have said:

“Give me a place to stand and I’ll move the Earth.”

He was speaking of leverage and the idea that a great weight can be moved with very little force given the right amount of leverage.  Leverage is what IT needs to make an orderly progression to the Cloud without having to expend too much force.

Where software is concerned, leverage often comes in the form of finding the right infrastructure layer from which to effect the desired transformation.  A good layer may come in the form of some standard that becomes the Rosetta stone whereby lots of different implementations are made equal and customers have more choices.  It may come from a particular abstraction that is powerful enough to sit on top of formerly quite different paradigms and make them all work alike. Leverage may come in the form of a new box of some kind that insulates one set of connections from the other, once again making the implementations on the other side of the box equal.

In order to move to the Cloud in an orderly and proficient manner, IT still needs the right layers to stand on.  Cloud providers like Amazon have done a little bit of this work, but there is a lot more still to be done.  You can see the difference in a service like Amazon’s, that looks very familiar to someone with at least a background in virtualization, versus a service like Google App Engine that forces you to more radically change how you think about infrastructure.  A good Cloud layer will minimize that disruptive thinking, perhaps at some cost of performance, in order to achieve greater agility.

Ideally, the right Layers meet IT halfway to the Cloud, forcing them to change much less than a direct jump into the Cloud, and facilitating the process of making different infrastructure variations look the same.  HP’s Hybrid Delivery is all about creating the right methodology and services to enable IT to think about their own data centers, private clouds, and public clouds as similarly as possible, as John Dodge points out over on the Enterprise CIO Forum.  Dodge views the right layers as facilitating agility, and that’s exactly what a good layer ought to do.

The next step beyond methodology and services will be technologies that act as layers.  IT will be able to refactor their infrastructure into components that are best left in the corporate data center, components that need a private cloud, and components that can thrive in public clouds.  The test of the best technologies will be how agile and transparent this refactoring can be, as well as the completeness of the new layer in terms of solving the key problems:

–  Security and Authentication across the different infrastructures.

–  Latency issues that will arise when some data and API’s are leaving the data center and picking up a much more expensive round trip cost due to the latency of the Cloud.

–  Management and Monitoring:  How do we make it easy to do these jobs in the same way no matter which infrastructure is involved?

There are many more dimensions such Cloud Refactoring Layers will need to address, but those serve as a reasonable framework to start a discussion.  As mentioned before, an appropriate Layer could take many different formats.  Imagine, for example, a Cloud Appliance.  Instead of installing a rack of blade servers, suppose you could insert a device in your rack that talked to servers in the Cloud and made managing and using them look very similar to having the physical blade servers right in your data center.  What an interesting device this would be.  Imagine a virtual Cloud “server” that acts as if it has 128 cores (or however many its appropriate to share per network connection in your rack based on the latency and bandwidth capacity of your Cloud access), terrabytes of data, compatibility with the management tools you know and love, a secure bulletproof connection to its Cloud backend that couldn’t “leak” into your network, and so on.  Yet the device would sit there in your rack taking very little space and power.  Consider it a Cloud “Force Multiplier” for your data center.

You wouldn’t have to entrust anything too sensitive to your Cloud Appliance.  Perhaps it simply allows you to offload some capacity from your Data Center to make room for more mission critical apps.  You could envision application dedicated versions of such an appliance aimed at apps like Mail Servers, Web Servers, or Sharepoint and other Social Apps.  Or, perhaps the appliance would be tasked with doing backups for PC’s and the non-critical servers.  Why mess with tape and other physical media when you can get multiple physical location redundant backups very easily from the Cloud?  Such an appliance would be exactly the kind of leveraged Layer I’m talking about.  It would make it easy for IT to start shifting apps to the Cloud without undue strain.

Such appliances already exist and are referred to as “Virtual Cluster Appliances.”  Expect a lot more to develop along these lines.

This post is on  behalf of the Enterprise CIO Forum and HP.

Posted in cloud | Leave a Comment »

%d bloggers like this: