The Real Problem With Twitter Tip Jar

Facebook has made it clear that Apple’s ATT privacy feature will have a damaging effect on digital ad revenue, and of course, it’s not alone. Twitter will also get hit by this new feature that gives individuals the power to opt out of tracking, which many digital ads rely on. As Twitter is looking at a grim future post-widespread adoption of the privacy feature, the company is attempting to combat revenue losses with what could end up being a new revenue stream: the Twitter Tip Jar.

Tip Jar will be a lot like Super Chat on YouTube live, where creators have an opportunity to earn revenue from followers in the form of tips. As of now, Twitter is not taking a payment processing fee, however, it’s only in the initial testing stages and it’s unclear what the future will hold. It’s been a rocky rollout–Twitter overlooked a very key–and very elementary–aspect of the feature, as it gave out the tipper’s address for those using PayPal.

Tip Jar

It won’t be long until Twitter fixes this issue, which could come in the form of Twitter’s own proprietary payment processor. You know, the type that will naturally charge a processing fee–as they all do. And it’s privacy (and worse, security) issue with PayPal will justify the development of its own built-in processor and its fee. After all, a small fee is worth the safety concerns we’ve now seen with using third-party processors for Tip Jar.

But even if Twitter irons out Tip Jar, will this feature actually help halt Twitter’s diminishing growth year over year and combat advertising revenue losses due to the Apple ATT feature? In other words, do people actually want to give others money for their bite-sized tweets and will this effort to strengthen the platform leave it crumbling in the future?

Problem With Twitter Tip Jar
Problem With Twitter Tip Jar

The Value of a Tweet

The problem with Twitter is that it was created on the premise that tweets would be short and sweet (well, sweet is debatable), and therefore easily consumed quickly. In fact, while the maximum character count for a Tweet is 280, the average tweet is just 33 characters. Meanwhile, the average YouTube video hovers around 12 minutes–and this doesn’t include the hours of filming and editing that go into producing video content.

YouTube content creators can generate money because they can provide great value. Unlike videos on YouTube, no one wants to pay for tweets because there’s little to no value in them. The value is in speed consumption entertainment–and mindless scrolling doesn’t exactly lend to dishing out money. It doesn’t even lend to stopping on one Tweet long enough to engage with it.

In fact, Twitter has one of the lowest engagement rates out of all the major social networks. A good engagement rate on Twitter is considered to be in the ballpark of 0.02% and 0.09%. Meanwhile, a good engagement rate on Facebook is around 1%. Instagram is around 1 to 4%, and TikTok is around 3 to 9%.

Even celebrities with millions of followers get very different payouts by social platforms, and Twitter is at the bottom. For example, Kim Kardashian, who is a top earner on Twitter, is said to earn around $10,000 per tweet. On Instagram, one of her posts can land her nearly $1 million.

A Penny For Your Thought …or Tweet

Unlike YouTube, where anyone has the power to potentially make millions creating content, those who earn the most on Twitter are those who are already celebrities who have made millions.

So not only can YouTubers create truly valuable content that can literally change lives, from educational content that can fuel professional growth to content that can build and repair physical and mental health. It’s easy to see why people would feel more compelled to pay YouTubers for their time, services, and in many cases, for their personal stories–and with that, their advice, honestly, and vulnerabilities.

But do we really want to give our hard-earned money to celebrities on Twitter who can go over to Instagram and make hundreds of thousands–if not a quick million bucks from posting one photo?

The other accounts that we typically follow are our family, friends, and colleagues–probably not people you’re going to dish out some cash every time they post a tweet you like.

Money is what we exchange for what we get. While a tip may be seen as something of an extra or a freebie, there still has to be some value for our money. Or some reason we want to pay when we don’t actually have to. Tweets were meant to be fast and cheap, and adding a price tag to them will only cheapen the platform, add more noise, and make it less appealing to use.

Twitter is trying to have its cake and eat it too. It appears as though it’s attempting to adopt YouTube’s pay-per-view-style revenue stream, which brilliantly incentivizes users to become marketers in an effort to increase pageviews. However, unlike YouTube which pays its content creators directly, Twitter is unwilling to give creators a piece of its $3.72 billion revenue. Instead, it wants you to pay them.

It appears that Twitter is failing to recognize that social networks depend on both content production and consumption. And the two do not necessarily grow proportionally. By adding the element of shameless self-promotion that comes along with the ability to monetize content, Twitter’s user experience will suffer. With that, its revenue will suffer.

While I have to give Twitter credit for attempting to do something new in light of Apple’s new ATT privacy feature, as opposed to just throwing a fit like Facebook, it still misses the mark. By failing to focus on providing value to its users–both consumers and producers, its efforts are likely to prove unsuccessful. It’s another example of how businesses need to stay laser-focused on delivering value to their audience.

Going off-course can make you a trailblazer. But if you’re going in the wrong direction, you’ve just lost track. Whether or not you’re closing in on providing more value to your audience is how you tell the difference.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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