Twitter Ads

Rumors were floating around today that Twitter was testing in-stream advertisements as a monetization trial. These same rumors were quickly squelched, but it certainly makes you think about where this new media darling's first buck will come from. Some possibilities:

Twitter Advertising
This is the most obvious of the potential solutions. Throw up some banner ads, or insert text / image ads directly into the Twitter stream and, viola, instant revenue. There's a problem with this approach, however, and that problem is targeting. The stream of data that runs across a user's page is far too disparate and non-contextualized to provide any meaningful basis for ad targeting. In a world where vertical ad networks are popping up all over the place and promising a highly identifiable audience to their advertisers, I have to wonder how much value Twitter ads will have. And without value, you can surely expect a low-grade of advertiser.

Twitter Affiliate Links
In the lead-gen, affiliate marketing space, there's an opportunity for Twitter to dynamically insert product / service links into the stream. For example, when a user is posting about watching Dexter Season 1 on DVD, the appropriate text could be turned into a link that would drive users to a point of purchase. This might be more effective from a click-thru and ROI perspective as it would keep the Twitter steam pure and, if implemented properly, provide meaningful contextual links.

Twitter Co-Brands / White Label Solutions
Really pushing the envelope on this one but with everybody and their mother wanting a social network these days, Twitter could offer a hosted micro-blogging solution either direct to client or via partnerships with some of the social media platforms (Ning, Small World Labs, etc., etc.,). Though, now that I've just typed that sentence, I realize that the Twitter API may render something like this of little value.

Twitter CPC
There are some interesting collaborative filtering offerings out there, and one company taking this to an interesting place is Loomia. Their SeenThis? product provides content recommendations based on a user's connections in Facebook (they're aiming to expand out to the other social platforms as well). A Loomia client can have links to their content displayed on Facebook profiles and then pay on a CPC basis anytime a user is delivered to their site. A similar implementation on Twitter could be very interesting and would be an innovative way to leverage (and monetize) the social graph.

These are just some ideas that popped into my head while reading the coverage today. I'd be interested to hear any other thoughts folks have on how Twitter can capitalize on the huge traction they currently have.