How Twitter could tweet its way to profitability through brand promotion and stronger, more focused communities

Thanks to a heads up by Shauna Causey, I found out that the Japanese Twitter site started posting ads in an effort to make money.

I’m not sure how I feel about this. On one hand, it doesn’t affect me too much since I use TweetDeck on my laptop and TinyTwitter on my cell phone. But on the other hand, that is a pretty gigantic ad.

Adding an advertisement to Twitter profiles and home pages only reaches one demographic. Will we be seeing targeted ads in our streams? Imagine an ad every 50 or so tweets. Something like that would reach every user, but would it drive them away? If Twitter goes that route, will the companies that use Twitter for communication be subjected to the same ads? What about people who use SMS for posting to Twitter? Will they be automatically signed up to receive ads on their cell phones?

My idea for Twitter to make money came to me while I was waiting at a bus stop a few weeks ago, and it goes like this: Have companies create backgrounds of their brand—whether it’s a product, service, or just the company in general—and let Twitterers choose any background from a certain company to use as their background. Twitterers could even customize that background to include their preferred information (the typical e-mail address, Web site address, and picture). If Twitter charged the company for each time a user chose an ad, that would leave the power of monetizing in the hands of Twitterers.

For example, if Microsoft wanted to promote Windows 7, a marketing manager from the Windows team could create a background that contained elements of the new operating system—maybe some icons, a logo, a Web site address for getting to know the product, and a list of Twitterers that are on the Windows team. If I wanted to support the launch of Windows 7, I could choose the background (which would come with an agreement; maybe it would say something like “You agree to use this background for 30 days” or some specified amount of days), add whatever info I wanted to up in the upper-left-hand corner of the screen (a picture of me and what I enjoy doing on the weekends), and post it to my profile. On the back end, Twitter would charge Microsoft maybe $20 for me choosing that background.

With that same idea in mind, there would have to be some way that people who don’t access the Twitter Web site would still be able to market that background. Twitter could send out an automated message selected by the Twitterer every 1 to 30 days, depending on the Twitterer’s preference, that points them to their profile or to the background brand’s Web site—in this case, the Windows 7 Web site. This, too, would factor in to the amount that Twitter would charge Microsoft. For every click that points to the Twitterer’s profile that displays the Windows 7 background, Twitter could charge 25 cents. For every click that points to the Windows 7 Twitter site, @Windows7yay (fake Twitter account; just using as an example), Twitter could charge 50 cents. For every click that points to the Window 7 Web site, Twitter could charge $1. Of course, these rates could fluctuate depending on predetermined pricing plans.

But what’s in it for the Twitterer? Taking a page from the Zune Social site, Twitterers could earn badges that show that they have supported specific brands. This would add more followers to the Twitterer that advertises the brand and the badges could also serve as a point system that ranks Twitterers based on their badges, providing them with more visibility and creating a gateway to other audiences.

Twitter could even aim for nonprofits. Take the same idea above, but instead of Twitter charging for clicks on the Twitterer’s update links, Twitter could donate the amounts back to the nonprofit organization. For example, if I chose a Make-A-Wish Foundation background, Twitter could charge the foundation $50. But imagine if I set my preferences to post an update about the Make-A-Wish Foundation once every three days; if just 10 people clicked on the update containing the Make-A-Wish Foundation Web site link each time the ad appeared within that 30-day period, Twitter would donate $100 to the Make-A-Wish Foundation just for that one person in that one month. Of course, there would have to be a cap for the link clicking, otherwise, Twitter would lose a lot of money (I know I’d go crazy with clicking the links!).

These are just my thoughts on how Twitter should go about making money. Although it puts the profit-building in the users’ hands, I think it could really be successful once people start using it and promoting the brands that they love and see everyday. By giving them incentives, like badges, Twitterers can grow their followers with others that also support the same brands or causes.