For years, many online companies have generated revenue primarily through advertising. Some rely on a combination of pre-roll and display ads, others often use simple text ads, and still others mix and match advertising formats. Their value to advertisers: eyeballs.
Yet, with the economy in a recession, even online ad spend is expected to take a hit (although not nearly as much as traditional media).
Thus, it's interesting to note that Twitter, a microblogging tool that has caught fire over the past two years and counts nearly 6 million registered users, has shunned the advertising model.
In a recent interview with the New York Times, Twitter CEO Evan Williams said the company gets calls daily for advertising sponsorships. But it plans to instead figure out a way to generate revenues from the businesses that leverage Twitter to speak to their customers or sell products.
- Whole Food and Baskin Robbins have used Twitter to announce special coupon offers.
- Jet Blue and Tyepad have reached out to customers via Twitter to address customer service issues. (In fact, I received an email from TypePad shortly after I tweeted that I couldn't add a gravatar to this blog).
- Ford has used Twitter to set the record straight about a news report suggesting Ford managers were eligible for bonuses this year (after petitioning Congress for financial help).
Thus, it will be very interesting to see if companies will pay fees for this type of outreach. Only time will tell. But, with these hard economic times, and intense pressure to keep customers, I'm betting they will.