'Tweets'. 'Hashtags'. 'Mentions'. Just a year ago these words carried little meaning for anyone outside of the world of technology. However, 12 months on, due to the enormous success of Twitter, such phrases have become commonplace and the microblogging site has evolved into a key social and business networking tool. Twitter has fundamentally altered the way people across the globe now search, discover and digest information and this has opened the door to a wealth of opportunities for companies looking to boost their profile online.
Today more than 50 million live accounts exist across the world, representing a massive demographic with huge market potential that is largely untapped. For retailers, a presence on Twitter not only allows them to listen to what people are saying about their brand online, but more significantly it provides a platform to communicate with existing customers and reach out to new targets. Nevertheless, while the consumer side of social networking is fairly basic, retailers looking to harness value from Twitter face a number of obstacles.
Primarily, the key for company success on any social network is the ability to strike a balance between presenting both a businesslike and human persona. While it may be tempting to pump out messages consisting of corporate promotions and offers; to build up a loyal following retailers need to develop a strategy which does not bombard their audience but instead is tailored to the people they are trying to access. So with this in mind, how can retailers profit from their efforts on the site and what options are available?
Although Twitter presents a wealth of opportunities, the challenge of extracting any real value from the site has been a subject of contention for many companies, not least retailers, over the past year. Whilst in the early days of the site it was expected businesses would be able to target consumers by displaying banner ads on either their own homepage or the homepages of site members, Twitter's founders have yet to decide on the best approach to monetise the platform.
To investigate the success of ad campaigns on social networks, we asked 2000 consumers for their opinion on the effectiveness of different online advertising formats (August 2009). The results were perhaps surprising given the rise in the popularity of social networks: According to the research, just 5% of respondents considered adverts on professional social networks like LinkedIn to actually be helpful in assisting their purchasing decisions on the web. This was only a little higher for personal social networks like Facebook, with 9% of the votes.
In total, only 4% of those surveyed had ever clicked through on a banner advert displayed on a social networking site.
This low interaction suggests that adverts being used in this space are not yet having the desired effect in terms of audience participation and unsurprisingly Facebook has announced plans to remove banner ads from its site in early 2010.
Yet, despite the challenges faced by companies looking for a return on investment on Facebook, there is still encouragement for retailers attempting to capture the attention of networkers on Twitter, as shown by a recent report from Interpret LLC which suggested that Twitter users would be more open to ads. The report found that Twitter users are twice as likely to review or rate products, visit company profiles and click on advertisements or sponsors than Facebook or MySpace users are.
So what prospects exist for brands to harness the potential of the more engaged and easily influenced Twitter user?
As Interpret's research suggests there is considerable opportunity for retailers to monetise Twitter and over the next year we anticipate a real push from businesses looking to maximise their success on this popular platform. But to succeed in this venture retailers will need to be strategic and targeted to ensure they profit from their efforts.
Affiliate marketing presents a considerable opportunity for publishers looking to monetise social networks like Twitter. To help brands get ahead in this space Linkshare has recently launched #tweetshop, a monetising tool for publishers on Twitter.
Publishers can easily customise tweets from the #tweetshop interface in the same way they would create traditional affiliate links. This automatically creates a shortened URL that directs an online shopper to the landing page for the recommended object of affection, and all this is tracked earning the publisher commission if this turns into a sale.
Effectively, #tweetshop allows publishers to turn their Twitter stream into a new revenue channel; the tool enables publishers to promote products on the site and lets consumers follow the brands they love and click through for special offers or new products.
With this strategy brands can reach the consumer in a targeted manner, of which they can choose to participate. It also works to drive traffic back to the retailer's site, developing relationships with consumers, helping companies to monetise their Twitter feeds and increase their online sales and in 2010 we expect to see other businesses launching similar tools.
To maximise success on Twitter, retailers need be able to run targeted campaigns and place messages that are specific and tailored to the needs of their audience. However, retailers should not expect instant success and they need to take time to build up their Twitter following. As research into the success of advertising on Facebook has shown, users logging onto social networks are doing so to network and only by engaging with their customers online will brands earn their trust and be able to develop relationships.
Whilst interaction and engagement levels on Twitter appear to be more promising, it is still early days and there are several hurdles to overcome before the true value of Twitter can be realised. Although tools like #tweetshop and the Amazon widget are a step in the right direction, retailers need to work harder to make sure the information they convey on Twitter captures the attention of consumers as well as adding value to their overall online shopping experience; only then will brands see any true ROI from the tweets they place.
• Liane Dietrich is the managing director of LinkShare UK, a provider of full-service online marketing solutions specializing in the areas of Search (SEM), Lead Generation and Affiliate Marketing.