Trip Chowdhry of Global Equities Research is skeptical over the monetization of Twitter Inc TWTR, as he believes symmetric monetization of the micro blogging site is very difficult. On the other hand, the analyst is positive on the asymmetric monetization model adopted by Facebook Inc FB for making money from WhatsApp.
“Symmetric monetization of TWTR is going to be very difficult; we don't think it can ever improve,” Chowdhry wrote in a note.
What's Different About Twitter?
The analyst noted that advertisers would be hesitant to put ads in Twitter feeds due to:
- “Too many fake Id's.”
- “Disguised users.”
- “Fake followers.”
- “Too much spam.”
- “Unable to identify conversations.”
Moreover, the advertisers can place their ads on Twitter without paying the company by just tweeting on a hash tag.
WhatsApp Success And Strategy
But, Facebook seem to found a way to monetize WhatsApp, as the messaging service can now share phone numbers and other data on the activity of its one billion users with Facebook. The move is commendable as it would provide better targeting options to the advertisers, help to crack down on spam and offer relevant ads.
If a user has both Facebook and WhatsApp installed on the same device, Facebook should be able to map the two using device identifier.
“The ads would come through a Facebook feature called ‘Custom Audiences,’ which lets a business upload lists of customers and phone numbers or other contact information the business has collected from warranty cards or other sources,” Chowdhry highlighted.
Facebook shows the ads by matching the list to users with the same information. Under the service, users can opt out of the sharing arrangement before agreeing to the new terms and privacy policy. The user has another 30 days to opt out even after agreeing to it.
Chowdhry also pointed out WhatsApp’s new policy, allowing companies to send marketing offers or messages to individual customers. But, users can control or block such messages. WhatsApp will continue to bar traditional display ads from its service.
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