For pretty much the length of Twitter’s existence, there have been people asking what its profit model will consist of. Until some months ago, Twitter seemed to be content to continue to build the service and grow its user base with the notion that focusing on improving the product and the user experience would lead to a successful business model in its own time.

At Chirp, Twitter’s first official developer conference, it finally become clear that Twitter was beginning to enclose the ecosystem in order to better capitalize on their increasingly popular service. First, Twitter board member Fred Wilson wrote a blog post about the Twitter platform which was remembered for his admonition to developers about ‘hole filling’: “I think the time for filling the holes in the Twitter service has come and gone.” Next, Twitter purchased Atebits, the publisher of the iPhone application Tweetie. The (paid) product was re-released as a free app called Twitter for iPhone, and official Blackberry and Android apps soon followed. Twitter also recently changed its API Terms of Service to ban in-stream advertising by 3rd party apps and began testing its own link-shortening service, t.co (you can see it being tested in most Twitter employee’s streams). In a matter of a few weeks, Twitter made a number of announcements that pushed it inexorably towards becoming a revenue-generating business.

In addition to advertising, Twitter has set up deals with mobile network operators around the world to provide access to their subscribers and has licensed access to the full ‘firehose‘ of tweets to search engines and portals like Google, Bing and Yahoo, but much more attention has been paid recently to the new advertising products that Twitter has been testing over the past month. Currently there are three products:

Promoted Tweets: Promoted Tweets were announced at the AdAge Digital Conference in April, just days before Chirp (the announcement was further expounded in the New York Times). Essentially, advertisers can select one of their tweets and ‘promote’ it to be displayed on the top of search result pages for specified keywords. Keywords will eventually be bid on like Google Adwords, and are sold on a CPM basis. Participation is still limited to a small group of advertisers. The first Promoted Tweet was from Twitter, and among the first brands to try the ad units were Starbucks, Red Bull and Virgin America.

Promoted Trends: More recently Promoted Trends have been moving to the fore as Twitter’s most visible advertising product. Promoted Trends allow advertisers to buy a spot on the Trending Topics list which displays the most-popular topics being discussed at a given time. Promoted Trends are related to Promoted Tweets, because when a user clicks on the trend they are taken to a search result page for the trend, with a Promoted Tweet at the top of the page containing the advertising content. The first Promoted Trend was for Disney/Pixar’s Toy Story 3, and it has been used in successful campaigns for Coca-Cola and Old Spice.

@earlybird: Finally, Twitter just this week launched @earlybird, a group buying product similar to recent eCommerce darling Groupon. Users follow the @earlybird account (it had almost 70,000 followers on 7/18) and receive notice of special limited deals and bargains. The first @earlybird deal was also with Disney, and provided a coupon code for 2-for-1 tickets to the fantasy film the Sorcerer’s Apprentice.

Now, how do these ad products work? When Promoted Tweets were first announced, Twitter COO Dick Costolo spent a lot of time talking about Resonance. Resonance is at the heart of Twitter’s advertising product’s value proposition, with the idea being that the ‘ads’ are in fact organic tweets that have been produced by the advertiser, and that their performance can be measured through users’ interaction with the Promoted Tweets. So, if a user retweets, replies to, favorites or clicks on a Promoted Tweet, those actions can be fed into a Resonance algorithm that determines how engaging the ad is. Promoted Tweets that do not sustain a sufficiently high Resonance score will cease to be displayed.

Going a bit deeper into Resonance, it is useful to look at another non-ad product that was rolled out a while ago: Top Tweets. Top Tweets were launched in late March, ahead of Chirp. Top Tweets are used to surface interesting tweets, and power the feed of tweets that populate the front page of twitter.com when you are not logged in. Danny Sullivan of SearchEngineLand interviewed Twitter’s Chief Scientist Abdur Chowdhury about how the algorithm works: “The algorithm looks at all kinds of interactions with tweets including retweets, favorites, and more to identify the tweets with the highest velocity beyond expectations.”

Does this sound a bit like the description of the Resonance score for Promoted Tweets? Can you see how an algorithm such as this might be useful for benchmarking Promoted Tweet and Promoted Trend ad performance? And it’s not just Top Tweets and Promoted Tweets/Trends: the recent addition of name search into the integrated search at Twitter.com also factors the ‘popularity’ of the accounts into its decision of which users to display in relation to a search.

Clearly there is a dense set of algorithms working behind the scenes to judge tweet velocity, resonance and popularity, among other things. The rich set of data contained in the user object of each tweet provides a dizzying array of values for Twitter to use to slice, dice and target users on the network, and are likely to play a key role (along with the wildcard Annotations feature) in improving the targeting and personalization of Twitter advertising products.

So after spilling all of this digital ink, what have we learned? After years of facing questions about its profitability, Twitter has made a number of moves and released a number of products over the past few months that lay the groundwork for Twitter’s advertising business. First, Twitter has claimed the advertising ecosystem for itself through the API Terms of Service agreement, and then it has made efforts to standardize the user experience by providing official Twitter clients for popular mobile platforms like iPhone and Blackberry. The ad units that Twitter will sell consist of Promoted Tweets, whose performance will be dependent on their Resonance score. Resonance is measured (at least in part, I believe) by the same kinds of ‘popularity’ measures that power Top Tweets and user search algoritms, which include interactions such as retweets and replies.

In time, all of the links passed on Twitter will go through the t.co link wrapper, which will allow Twitter to measure click-through rates and referral statistics, helping to provide valuable analytics to advertisers to measure the performance of their campaigns. Promoted Trends allow advertisers to take advantage of real existing conversations surrounding their brand or related subjects and interpolate their own message into a prominent part of the discussion. Finally, as the ad products get more developed, they will be able to be served on a more discretionary basis to users based on a large number of relevance factors including location, language, platform, ‘popularity’, or any number of additional vectors that are included in the user object, or introduced by the deployment of Annotations.

When you add that all up, does this look like a compelling opportunity for organizations to reach their target audiences? Does the use of the Resonance score to ensure only highly-engaging Promoted Tweets are displayed herald an improved user experience when it comes to receiving commercial messages? Who will be the biggest beneficiaries of this model of advertising? Not all kinds of products or services generate the kind of buzz and engagement that Promoted Tweets and Promoted Trends reward, but are there enough industries for whom it will be compelling? Judging from their adoption, Hollywood studios seem to like the model, but what about toilet paper?

These are the questions that will have to be answered after a longer period of experimentation and adjustment of the models. Still, provided your customers are users of Twitter, I think that the advertising model that Twitter is building is quite sophisticated and has the potential to be a great success. Time will tell if this turns out to be the case.

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Filed under: Digitization
Posted by: Richard
On: Sunday, July 18th

Nature has a way of reminding us how small we are. Although humanity has come a long way in taming Mother Earth and bending her to our will, there are still events that are beyond our ability to control. While our ability to stop heat waves and earthquakes from occurring has remained non-existent throughout history, our capacity for communication and sharing those affecting lived experiences with others has grown considerably over time.

A pair of natural events that have swept through certain affected communities of users over the past two days on the trendy social media services Foursquare and Twitter that brought to mind some thoughts about the value of shared lived experiences and suggested some strategies for developing man-made events that are similarly affecting.

First, a record heat wave has stricken America’s North-East, with the mercury surpassing 103 degrees in New York City on Tuesday. This uncomfortable weather condition has been keenly felt on NYC-based location-based service Foursquare, which has seen more than 4,500 users check-in to a ‘location’ that was created for the heat wave called Heatpocalypse. I don’t know who created the venue, but it has accumulated dozens of tips and tags over the past two days and prompted some of the increasingly more common Super Swarms (events where over 250 users have checked-in to the same venue in a given time period) that mark a large scale (for Foursquare, anyways) shared lived experience, whether that is a sporting event, a music festival or a political rally.

In the second event, a moderate earthquake rocked Southern California this evening towards the end of the work day, and many Twitter users (including its increasing celebrity population) immediately took to the status update service to spread the news of the tectonic event. Social media analytics service Rowfeeder posted that it had recorded over 60,000 relevant updates in the hours following the earthquake, and I tweeted shortly after the event that this kind of response has been commonly observed throughout Twitter’s history – I have even dug up an old post from a student discussion forum at the LSE on the subject back in 2007.

So what do these two events reveal about affecting lived experiences? It seems to suggest that when there are events of a large scope and specifically understood meaning that affects the lives of many, those who are affected have a tendency to share their experience through whatever means are available to them. The motivations for such sharing may vary across a number of factors, but what is common is that an impulse to share was elicited by the event. In my graduate research I tended to focus on the theory of identity performance as the motivation for sharing lived experiences through social media, however there are many other motivations to share information (including, for example, reassuring your friends and family that you haven’t died in a natural disaster).

Still, when it comes to trying to harness Super Swarms for your business or associating your brand with the immense outbursts of tweets related to a beloved international sporting event, I would suspect that mere mortals will find identity performance (users electing to associate themselves with a known cultural object) to be the most fruitful motivation for eliciting the impulsive response tendency of an affecting lived experience – that is, unless you’ve got an earthquake machine on your approved vendors list.

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Filed under: Digitization, Identity
Posted by: Richard
On: Thursday, July 8th

Recent news regarding the release of a video by the website Wikileaks has led to an inspection of the legal and national status of sites like Wikileaks – and indeed have called into question the whole nature of national identity and sovereignty. This New York Times article makes several interesting observations that can lead to further discussion.

The article spends considerable time discussing the legal questions surrounding Wikileaks and how it can host the content that it does:

“WikiLeaks publishes its material on its own site, which is housed on a few dozen servers around the globe, including places like Sweden, Belgium and the United States that the organization considers friendly to journalists and document leakers.”

Because the material (data in this case) is hosted in multiple different countries – each with their own laws on privacy and freedom of speech – Wikileaks can serve its content to users across the global internet without being subject to laws of some nation that might prohibit the possession of such material. Essentially, the law remains stubbornly fettered by national boundaries, while the internet vaults (relatively) freely across borders and cultures. Wikileaks exploits this asymmetry (and others) to find an effective means of distributing information that previously had been controlled by ruling powers.

We have seen this asymmetry before in a number of areas. Military’s around the globe have complained about Google Earth opening up access to satellite imagery that at one time was the top-secret preserve of elite American and Soviet commanders. Now anybody with an internet connection can access satellite or aerial photographs of numerous sensitive military bases and research facilities. Plenty of digital ink has been spilled (including by me) about the empowering nature of information and communications technologies in Iran during the post-election period of 2009 that permitted individual citizens armed with nothing more than mobile phones to distribute information that the Iranian state actively sought to suppress. And the question of enforcing intellectual property rights has always been good for bombastic acts such as the Pirate Bay’s doomed effort to purchase the micro-(non)nation of Sealand and establish a state free of the legal jurisdiction of copyright.

Wikileaks represents another example of the challenge that a globally distributed network like the world wide web poses to the sovereignty and supremacy of the nation-state. The state has become more aware of this threat of late – the debate surrounding the newly enacted Digital Economy Bill in the UK demonstrates only the most recent example of a government attempting to get a tighter grip on the internet – but it is also increasingly seeing deterritorialized web entities position themselves as legitimate adversaries to state power (witness Google vs. China).

As access to the network extends to more and more people, and as our society and economy become more and more reliant upon the remote access to information and computing resources on the network, these issues will only be thrown in further relief.

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This is already a long blog post, but I want to share an essay I wrote for a course taught by Manuel Castells last year at the conclusion of my graduate studies. It analyzes this issue in greater depth and situates it within the context of the origins of the internet, and the decisions that were made then regarding network standards and procedures.

Don’t Worry, We’re From the Internets!

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Filed under: Digitization, Globalization
Posted by: Richard
On: Thursday, April 8th

As we’ve seen over the length of this year, the digitization of media has empowered individuals to communicate with the world. As sources of information have increased, a struggle for relevance and credibility has ensued with many venerable institutions falling victim to upstarts, usurpers, and the rest of the crowd who are now able to reach a mass audience cheaply and easily.

In this network of identity and reputation, old standards of operation are becoming obsolete. The institution of journalism, perhaps justly proud of its self-styled public watchdog role, nonetheless has long observed various rules of conduct that are not strictly in the public interest. The era of the mainstream media being able to conspire to smother a story is rapidly drawing to a close as digital sources of information gain credibility.

A crucial source of that new-found credibility is the increasing occurrence of peer groups and social networks sharing information with each other digitally. Through the attribution of identity, the distribution of information through social networks and other referral mechanisms gains a specific, and personal, context. In this system, users are both publishers and brokers of information, and the ideas, updates or stories that are being shared can pass freely throughout their network with their imprint.

In many ways, this is nothing new. Individuals have always shared information with each other, and people’s identities have certainly been bound up with the sort of information they may have had to share. Personal relationships have meant a lot in getting a message distributed, and they will become ever more important now as the scope of possible relationships increases. The number of people who can influence a large crowd is no longer limited to a relatively tiny percentage of journalists and public figures. Institutions attempting to navigate the social waters will have to bear this in mind when charting their course.

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Filed under: Digitization, Identity
Posted by: Richard
On: Wednesday, July 15th

I’ve been blogging about the internet for a while, and using it for far longer. Born in a region that lies at the heart of web innovation, I was exposed to the network early on in my life and that no doubt has influenced my outlook on this process of digitization that I see sweeping the globe. Obviously I am not the only one who has observed this, and I have been strongly influenced by people like William Gibson, Donna Haraway, Manuel Castells, Richard Stallman, danah boyd, Shigeru Miyamoto and Howard Rheingold, among many others.

Nevertheless, as a longtime internet user, I believe that there are more signs now than ever before that the increasing adoption of the internet as a crucial tool in the everyday lives of Americans has reached a tipping point. Yes, Americans have been on the net for well over a decade,  but I would argue that users have demonstrated a new depth of participation with the web this year. Just since the beginning of 2009 we have seen an audience of millions watching online video streams of the Obama inauguration, a massive institutionalization of so-called ‘citizen journalism’ during the #IranElection, and a sudden demonstration of how the influence of and affinity for a cultural icon like Michael Jackson can translate into a quantifiable asset.

The key to this growth, and the value proposition that it contains, are connected to the complimentary nature of the emergent network identity that now cuts across many demographics. While there was a time when nobody on the internet knew you were a dog, now identity is increasingly associated with the web experience. Because the web is becoming a part of American’s everyday lives, users will expect to be able to interact with the brands, products and companies that impact their lives on it, and when they are unhappy with that experience they will be able to make their displeasure known to the members of their social network.

Mine was an early introduction to the virtual lifestyle of the internet, but the generation being born today is more likely to have a network identity from the cradle to the grave. In this new environment, the challenges and opportunities now facing industry are to be able to satisfy that customer expectation for interaction while benefiting from the increased intelligence on, and exposure to, those customers through the network.

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Filed under: Digitization, Identity
Posted by: Richard
On: Wednesday, July 8th

Virtual worlds could be said to have had a rocky takeoff, with the over-hyped Second Life disappearing back into relative obscurity over the past year and Google shuttering it’s fledgling virtual world, Lively. I would argue, on the other hand, that American consumers as a whole have never been more accustomed to operating withing virtual environments, and appear to be welcoming increased virtualization of their lifestyles day by day.

Last week, a video demonstrating X-Box’s Project Natal was the #1 viral advertisement online, its views having grown by over 1,000% from the previous week thanks to high-profile nods by Jimmy Fallon and other television personalities. The technology, which you could say is X-Box’s answer to the Wiimote, uses motion capture technology to allow gamers to use their body as the controller in gameplay and other interactions with the X-Box 360.

I argued in a presentation for a gaming class that controllers have become increasingly realistic as gaming has developed, in a bid to improve the sense of presence and the subsequent feelings of enjoyment for the player. What was once an abstract pressing of buttons has become a real swinging of the arm for a player trying to hit the ball in a tennis game. Project Natal appears to push this method forward yet further – the video makes a note of showing users playing a soccer game with their feet and body.

Although the product demonstration film signs off with the tagline ‘The only experience necessary is life experience,’ this is only partially true. A particular kind of life experience is necessary to intuitively understand how to use the technology presented by Project Natal – one which accepts the virtual, and is at ease comprehending and navigating virtual space.

From telepresence in the board room, to remotely controlled Unmanned Aerial Vehicles in the battlefield, to webcams in the bedroom, our contemporary culture appears to be one that is increasingly comfortable with virtual experiences.

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Filed under: Digitization
Posted by: Richard
On: Thursday, June 18th