Media Forum: Is Twitter right to reject ads?

Should the site explore other revenue streams first, Alasdair Reid asks.

Twitter, as has been pointed out on countless occasions, is a remarkably easy target. Eons of evolution and centuries of technological progress, capped by a digital revolution of breathtaking potency - and for what?

A swirl of mindless babble. Eddie Izzard letting us know he fancies some sushi. Britney stuck in traffic. Stephen Fry stuck in a lift. Jonathan Ross just, well, stuck. And for mere mortals, the even more mundane routines of daily existence.

Predictably, the fashionable digital guru Andrew Keen, the author of The Cult Of The Amateur, has been moved to voice his utter disdain, recently dismissing Twitter as "just the latest manifestation of narcissism and stupidity" - but he is, perhaps equally predictably, an avid Twit, with almost 5,000 followers.

For some commentators, Twitter is held up as evidence that, for the first time in the recent history of the planet, we seem hell-bent on taking steps backwards, 140 characters at a time.

And yet there are those, not least the Twitter founders, Jack Dorsey, Biz Stone and Evan Williams, who believe that Twitter is about to stimulate a fundamental change in the way that the human race talks to itself. The analogy being the way that flocks of birds communicate instantaneously, almost magically, when they form huge flocks.

And it's this aspect of Twitter's potential that will most excite advertisers - who are always keen on getting a fix on where the flock is headed. Unfortunately, they'll have to contain that excitement - for the foreseeable future at least. Last week, Stone announced that, although Twitter is continuing to explore revenue generation models, advertising isn't one of them.

Instead, it will look at developing revenue-sharing agreements with the communications networks - especially in the mobile sector - that carry its services, explore further the development of third-party platform applications and perhaps sell some of the Twitter audience and trend data to interested parties.

But is Twitter wise to reject advertising at this stage? Pete Robins, a co-founder of Agenda21, points out that the whole picture will change if (and there's speculation this could happen any minute) Twitter is bought by Google. In the meantime, however, he reckons Stone has got it right.

He explains: "The easy assumption is that anything that generates an audience can generate revenue from advertising. From a user point of view, yes, there are lots of people for whom Twitter is addictive but there are others who may find it addictive to begin with and then start to wonder if they've really got time for it. Advertising could drive those people away overnight."

Damian Blackden, the president, digital of Omnicom Media Group EMEA, agrees. He reckons that marketing opportunities on Twitter are going to be more about brands building a dialogue with people. He explains: "You need to become part of it as an active participant. It's about soliciting points of view from followers and having conversations as an actual part of the community rather than just distributing messages around the Twitter site."

Perhaps, Kevin Murphy, the managing director of Zed Media, says. But he also believes that Twitter's financial future is less secure than is sometimes made out. He adds: "Consumers can access Twitter feeds away from its own homepage, which means that doesn't get all the traffic. This means tracking may be an issue. Also, in its current format, it doesn't collect as much sellable data as Facebook, which offers exciting and original targeting and media format opportunities. It has secured $35 million in funding but the online world moves very quickly and the clock is ticking."

True, but Twitter should hold its nerve and get this right, Alex Miller, the head of i-level's social media unit, Jam, asserts. He concludes: "The essence of the Twitter brand is that it is by the people for the people - and advertising would jeopardise its consumer appeal."

YES - Pete Robins, co-founder, Agenda21

"Ads might drive some users away. And on our side of the fence, we also sometimes struggle to see a reason why advertisers should be there. I'm not sure it's entirely relevant for some companies."

YES - Damian Blackden, president, digital, OMG EMEA

"Anyone who wants to advertise, in the sense of just placing messages around the edges, is missing the point. Opportunities on Twitter are about brands becoming active participants and building a dialogue with people."

MAYBE - Kevin Murphy, managing director, Zed Media

"Google said that Twitter has shown Google that it could improve in terms of real-time reporting. Many think a search and/or content network approach could be the way Twitter develops; for example, including paid for-listings with search or a cost-per-click approach."

YES - Alex Miller, head, Jam

"Twitter can learn from the mistakes that other people have made in the social media space. I don't think it would be an effective environment for advertisers. It's right that Twitter explores other revenue sources, such as selling its analytics."