A (Bad) Social Media Advertising Business Model

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I’ve been participating in a social media advertising program called SponsoredTweets. This is a system where advertisers pay Twitter users a specified amount (generally based on the number of followers you have) to post an advertising message for their product or service. Being that my professional background is in advertising, I was curious to see how the system would work and play out over time. So I decided to give SponsoredTweets a test run.

As my @kristofcreative account currently has a little over 2300 followers, I receive a whopping $5 each time I accept and tweet a message for an advertiser through the SponsoredTweets service.

My guidelines for accepting and tweeting such messages are as follows;

1. The product or service needs to fit in line with the content I already talk about.
2. The product or service needs be something I would actually use myself.

To-date, I’ve accepted and tweeted a total of 6 messages for total earnings of $30 which are earmarked for a local food bank.

Sponsored Tweets Earnings $30

My Sponsored Tweets Earnings $30

Up until today, I thought the service was pretty straightforward and had a clearly defined (and successful) business model; post a message (once) and get paid by the system.

Apparently, SponsoredTweets decided to change their business model from a simple post/pay system into some sort of high-bred Pay-Per-Click (PPC) model called ClickWatch. So it’s no longer a simple post one Twitter message and get paid. It’s now a system that follows a Cost-Per-Click (CPC) model. That’s to say that if the link posted in your message does not receive a certain amount of clicks, it costs the advertiser more. On the flip-side, the more clicks a link receives, the less it costs the advertiser.

This CPC business model for selling advertising isn’t bad in and of itself — it’s the same model Google uses. The problem is that SponsoredTweets isn’t Google. SponsoredTweets is a program in which advertisers pay Twitter user’s to post an advertising message on their behalf. This is no different than a company paying to place an advertisement or link on your website or blog, But SponsoredTweets ClickWatch business model changes that.

With ClickWatch, if a link in a posted message does not receive enough click-through to achieve a $1.50 CPC, SponsoredTweets requires the user to repost the message up to two more times (a total of three times). This does nothing more than boost the benefits to the advertiser (they pay less per posted message) while reducing the income for the person posting the message.

In my specific circumstance, my potential earnings of $5 per tweeted message is reduced to $1.66 per message. But the earnings reduction is, by far, not the biggest problem.

The biggest problem is that the people following you on Twitter aren’t doing so to read advertising messages. So the more advertising messages you post the more likely they are to stop following you (no one like’s to follow a spammy Twitter account).

The outcome is that you can quickly find yourself with a social media channel that’s anti-social. Plus, if you’re even remotely considered using advertising in your Twitter messages as a monetization method you’ll find that the less followers you have is directly proportional to the amount of money you can earn.

Less followers = less money.

From an initial viewpoint I can perhaps understand SponsoredTweets thinking — they’re trying to create a more viable and cost efficient program for advertisers. It doesn’t take a lot of thought to come to the conclusion that the cheaper they can offer advertising the more clients they can bring into their service. That’s all well and good until you consider that in doing so, you’re slowly destroying the only advertising vehicle you have — Twitter users. Because without them, you have nothing.

So my question to SponsoredTweets is, “Why are you integrating an advertising model that is systematically executing the people you need to succeed?” Seriously, what are you thinking?

The simple fact is that every person who has decided to follow me on Twitter has entrusted to me to not fill their stream with spam. And I value that trust — a whole lot more than helping you make more money.

So go ahead shoot yourself in the foot one more time SponsoredTweets by revoking your user’s ClickWatch status for 60-days for choosing not to Retweet a message that the advertiser approved and the Twitter user already tweeted. Because punishing people for bad choices made by the company doing the advertising is always a smart move.

And quite frankly, if your advertiser’s don’t like the CPC results they’re receiving by using your system they should either A) do more research into the people they’re making an offer to or B) Move to a PPC campaign.

I’d like to hear your thoughts about social media advertising. Do you like or hate it? Does it have a place in the Twitterverse? And if you’re using SponsoredTweets, I’d love to hear about your experience.

4 Comments

  1. Hi,

    Thanks so much for sharing your thoughts on Sponsored Tweets. We rely on our users to let us know what is and is not working so that we can make the system better.

    Please note that the ClickWatch program is not new to Sponsored Tweets, it has been in place for several months now. This is probably just the first time you have encountered it. :)

    Also, this is not a mandatory program and you can opt out of it at any time by unchecking the ClickWatch participation box on your ‘my account’ page.

    In addition, refusal to participate in ClickWatch does not mean that you are not paid for your tweets, no matter what the initial or final CPC. Nor does this mean you are removed from the Marketplace. However, as you stated, if you have indicated that you will participate and you subsequently choose not to when asked, you will not be shown as a ClickWatch participant to future advertisers for 60 days.

    This does not mean that you will not receive offers during that time. As long as your overall CPC numbers are good (as yours are), my guess is that this will have very little effect on your offers for the next two months.

    That being said, I agree with you that advertisers should be aware of the value that any Tweeter provides to them which is why we provide CPC numbers for each link tweeted out. From our perspective, ClickWatch allows our users another chance to make their stats more attractive to current and future advertisers and provides our advertisers additional assurance that they will receive a fair return on the fee that they have paid up front for your tweet.

    The $1.50 CPC threshold for the ClickWatch program was chosen based on industry standards of the expected price per click across many different advertising platforms.

    All the Best,
    Carri Bright
    Communications Lead
    IZEA

    • @Carri – Thanks for responding.

      It’s definitely beneficial for any advertising program to provide advertisers with CPC numbers — the advertiser needs a way to gauge effectiveness and budget their spending. But there are still fundamental flaws with your ClickWatch business model.

      For one, you’re asking Twitter user’s to participate in a program that offers them no benefit. More chances to earn money but at 1/3 the amount is not a benefit.

      Case in point. I have over 2300 followers which places my account in the top 0.68% of all Twitter users. Yet, even though I’ve been participating in your program for about a year (could be less), I’ve only received six offers. This isn’t a complaint, just making a point that being included in ClickWatch hasn’t provided more earning opportunities. What it does indicate is that the only people making “real” money through Sponsored Tweets are those with tens or even hundreds of thousands of users.

      Secondly, CPC stats based on previously published messages aren’t guarantees — only guidelines for what an advertiser *might* expect. Of course even those stats can be severely skewed by variables such as day, time, and the message subject matter. So punishing the people who are the life blood of Sponsored Tweets by removing them from the ClickWatch availability pool because a particular link didn’t get enough click-through’s is insane. Specially considering that it’s your system (or perhaps even the advertiser’s themselves) that decides when the message is posted. And the “when” is one of the biggest factors in determining effectiveness.

      From my experience, I have yet to see one of the six ad messages I accepted to be posted during the most effective time. So if you really want to make CPC stats part of the selection process, you might consider letting users choose when to tweet the ad message. Heck, you could even recommend a time to give non-experienced users a starting point. At least they would have the option to play an active role in deciding their earning potential.

      Bottom line: providing as much information as possible to an advertiser so they can make an informed decision is smart. But punishing Twitter users for bad decision made by the advertiser or even your system is simply a bad advertising business model.

  2. Hey Michael, Adam here (also from SponsoredTweets),

    Some great points there. The one that stands out the most to me is the “penalizing tweeters” for advertisers bad timing for when tweets go out. That’s something we could definitely improve on. We default the time tweets go out to between 10am-2pm (the time when tweets get the most clicks), but if an advertiser says they want their tweets to go out at midnight we let them. Tweeters will see the time when the tweet will go out before they take the offer, but often this will just be “upon approval” – so as soon as the advertiser approves your tweet it goes out. We should work with advertisers so they have a better understanding of when their tweets will go out, and how huge an impact that has on their campaign.

    I’d disagree that we’re punishing Tweeters in any way though. If you write a great tweet, have an engaged audience and are priced accordingly then you may very well meet a CPC of $1.50 on your first tweet. That is dependent on the advertiser releasing tweets at an ideal time as you mentioned though. The vast majority of tweets, even with ClickWatch enabled, don’t get sent back to the tweeter for a 2nd tweet. I just checked it out, and in the past few weeks since our last major release, only 10% of ClickWatch offers have gone back for a 2nd tweet — and only 2% went back for a 3rd tweet! Advertisers usually get what they want on their first Tweet, which is the best case for Tweeters. I think of it more as insurance for an advertiser that the Tweeter wants to provide good value. It also encourages Tweeters to write better tweets so they won’t have to write as many of them.

    Thanks for the feedback! I like the idea of adding Tweeter timing controls so they can suggest a time.
    Adam Fortuna
    Project Owner, SponsoredTweets

    • Hi Adam –

      Really glad to see your company is taking an active role in monitoring and engaging people about your service.

      That said, I think we’ll just have to agree to disagree..

      I’m still not exactly sure what the benefit is to a user for joining the ClickWatch system. But if it’s to provide them with more opportunities to earn money and then you suspend their access because they choose not to repost an ad message, then you’re system is punishing them by taking away that opportunity. To me, that’s flaw number one.

      The second part of the equation I feel is detrimental to Sponsored Tweets is that ClickWatch skews to rewarding the advertisers — even when they make poor decisions. I feel a smarter move would be a system that skews to rewarding the people who are actually delivering the messages — specially since delivering additional messages reduces their earnings per tweet and increases the chance they will lose followers from posting more ad messages. When that happens, both the user and Sponsored Tweets lose.

      Right now, the ClickWatch system is placing all the responsibility on the user. If the user chooses to accept a pre-written message from the advertiser and a link doesn’t achieve a $1.50 CPC, the blame is placed on the user and asked to tweet more messages (or else they’ll be suspended from the system). And if a user chooses to write their own ad message, it still needs to be approved by the advertiser before it’s posted. So if that message doesn’t achieve a specified CPC, the user is, yet again, placed at fault even though it was the advertiser who approved the message and your system (or the advertiser) that decided when to post the message.

      I really feel that Sponsor Tweets has a good thing going but ClickWatch will be your downfall. The thing is, it’s a simple fix – just stop requiring users to repost messages.

      If you want to take it one step further, how about rewarding users if self-written messages outperform messages written by the advertiser. In that circumstance you could charge advertiser’s more for a higher CPC. That would be a win-win for everyone.

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