Social media is for brands

To some surprise and consternation, social media is not showing up as a significant driver of sale conversions.

Twitter, in fact, has apparently clocked in a particularly dismal 0.00% conversion rate. Nonetheless, in survey after survey, consumers indicate social media as influencing their purchasing decisions. In order to understand the discrepancy we need to recall another medium that is commonly used for advertising that is highly effective in influencing decisions but not at all in driving sales: outdoor. In fact, the more mature social media marketing is growing the more it resembles outdoor advertising in its impact.

Twitter is not a charity

It is true that I have pointed out some shortcomings in Twitter's monetization strategy, but that is a very long way from damning the entire enterprise as somehow abandoning its roots to become an extractive system.

Yes, Twitter has strong incentives to show returns on the billion dollars of investment that it has already absorbed, but that was its purpose in the first place. No more than any other for-profit startup, Twitter was always intended to generate returns. Now most business plans begin with a business model, while Twitte's turning that equation on its head has left it to scramble late in the day to find sufficient revenue streams to show IPO-worthy value. For most enterprises this would be a terminal condition, but as Twitter is demonstrably effective at communicating brand messaging, perhaps it will yet prove an exception.

Twitter responds (sort of and in deed)

As Dalton Caldwell has also noticed, Twitter is repositioning itself as a few-to-many information delivery platform: perfect for getting out brand messaging and less focused on many-to-many microblogging.

As I have already argued, this is an inevitable and -- for Twitter's finances -- necessary move. Now, if its management team would recall that undermining partner ecosystems is not a certain way to riches but rather focus on charging tolls on the value it does deliver.