Mad Men 360: Augmented Reality Breaks New Ground in Advertising

By Ron Callari

Mobile Advertising will set some new ground rules that will differentiate it from traditional ads in other mediums. Brands and advertising agencies are in development now to determine how to engage and target audiences to interact with a product or service using augmented reality overlays. Experience dating back to the Mad Men of the 1960s has shown that engagement moves the consumer from idea and awareness to familiarity and sale. Augmented Reality aids that process in ways not thought of, even a few years ago.

Working with mobile devices, augmented reality is used to overlay information markers from the virtual world onto real-life images. For example, street scenes can be enhanced where augmented reality applications apply overlaid context, images and/or videos relating to a business establishment’s pricing and promotions.

Augmented reality is a valuable adjunct to any type of marketing campaign.  However it hasn’t reached critical mass yet in terms of how many users can and will use it when it’s made available. This year, marketers will be looking closer at integrating AR to move their marketing message(s) forward. While there are presently no ad agencies that devote themselves solely to mobile augmented reality advertising, there are several new firms, consulting groups and brands that are experimenting within this space.

Tina Whitfield, CEO of EquisGlobal is one of the new breed of marketing firms testing the waters in this new arena. Her company is described as “a flexible organization that easily plays a ground game, gets dirty, goes guerilla, and drives impressive consumer acquisition numbers.” In a recent EConsultancy article titled Augmented Reality for Mobile Advertising, she espouses the need for augmented reality to reach beyond the ‘cool factor’ to become a ‘pleasant experience” in motivating new users.
In a recent interview with Whitfield, she talks about a dichotomy as to what software engineers are focused on versus ad agencies. “Creative agencies are trying to dance their way through technology and technology agencies are trying to sing their way through the science of branding,” she notes.

She asserts that mobile marketers need to embrace, hire, and learn from engineering and product management talent that are working on mobile handset development. “The data is there - tons of it - on how users like to engage with the mobile screen.  You don’t spend hundreds of millions of dollars developing a single handset without due diligence,” she says.

With such a small viewing screen, it would seem that smartphones aren’t the most ideal medium to view augmented reality ads. Whitfield disagrees. “Users who just want to see the world through that screen” might find the AR data feeds and overlays as clutter, but those who are seeking out data fields “find value in AR mobile advertising to assist them in finding restaurants, bars, emergency rooms and other types of facilities,” she says.

Users’ experiences vary, “but clutter is the result of the brand not standing out in proper balance to the scenery.” notes Whitfield. Too many, ads dropped into a street scene can be a turn-off and she emphasizes that, “most app developers wouldn’t allow this to happen, nor would most brand marketers.”

5th Finger is a firm that helps brands navigate the diverse technologies in the mobile space. When CEO, Patrick Collins compares AR ads to traditional online ads, he sees them having “less clutter.”  “On the web, most people are attuned to shutting out the clutter of ads around their content. The experience is newer and more engaging on the smartphone and so click-thru rates tend to be an order of magnitude higher with mobile advertising when compared to online advertising,” he asserts.

With the new tablets soon to be released to the public, perhaps the larger screens these devices offer will overcome the small viewing screen hurdle. While Apple’s new iPad will not include a camera, the HP Tablet and the Dell Mini 5 (with a screen slightly larger than and iPhone) might be the answer. While Whitfield dismisses this option due to the weight of these devices being too cumbersome, Christopher Barger, director of global social media for General Motors says “larger viewing screens are definitely a great feature of tablets and they certainly set the stage for a second application renaissance and plenty of opportunities for Chevy products.”

Barger believes augmented reality mobile advertising is another avenue to support brand awareness versus creating a cause-and-effect sales transaction.  He points to the example of cars being a consumer’s ’second largest purchase decision in life.’ While mobile augmented advertising will not sell the vehicle outright, it will “continue to shape the brand’s image in conjunction with wider advertising, marketing and PR initiatives,” says Barger.

Barger’s team recently launched a mobile augmented reality campaign titled, ‘Chevy iReveal.’ It was inspired by location-app games like Foursquare, one of the current location-based social networks. GM’s marketing initiative promotes a virtual treasure hunt for consumers to unlock GPS-coordinates of hidden vehicles in cities across the U.S.

When the user is in the immediate vicinity of a vehicle, the ‘virtual’ car will be revealed and appear in the real world setting. Once unlocked, it may be a Camaro in Times Square, or a Volt in front of Mann’s Chinese Theatre.

The incentive to keep using the app, is the ’surprise factor’ relating to the updates GM will be adding with each new vehicle they include in the program, as well as new functionality that will offer users the opportunity to view ‘interiors’ and hear new ’sound effects.’

The Beta version of this mobile app will debut at the South by Southwest (SXSW) Festival in Austin, Texas beginning March 12. GM will incorporate learnings from the Beta and enhance the application, releasing the full application in Detroit, New York and Los Angeles in April. New vehicles and new locations will be added subsequently throughout 2010. Updates will be posted to Facebook.com/Chevrolet.
The Chevy iReveal initiative is similar to an AR Ad campaign launched by Ikea in 2009, where their AR ‘Portable Interior Planner’ application gave customers the ability to see exactly how Ikea furniture could look in their homes prior to a purchase. Designed by the advertising firm of Ogilvy in partnership with the development group Mindmatic, photos of a room in one’s home taken by a smartphone merge with the app to insert the ‘un-purchased’ furniture into the room.  In this case, a clock was placed into a potential consumer’s living room.

Since AR mobile advertising is a relatively new marketing technique, there has not been a lot of tracking or analysis pertaining to ROI. Collins notes that “to track ROI on early technologies like this is simply too difficult given the early experimentation occurring - no two experiences are the same, so trying to develop standard measurements for them is less useful.”

Barger also feels calculating ROI should not necessarily be the sole objective. App downloads, vehicle awareness, positive branding, app rating reviews, user time spent on the app and positive press about the app are all important components, but these types of campaigns will pay dividends over time, as GM continues to live and engage in this new technology. “This is not a comprehensive, catch-all application for Chevrolet. It is just one (fun) way for Chevy to engage with tomorrow’s car buyers on their own turf,” he says.

In my recent article titled, “Real-Time Augmented Reality: Future or Fantasy?“ it was apparent that the AR language was still under development and at present there was no universal standard code accepted by all developers. Similar to HTML, it will probably take a number of years before a consensus is reached on ARML. However Whitfield did not see this as a hindrance for agencies and brands in using this new technology. “Advertisers should not be picking up ‘AR for Dummies’ to code an app,” she jests. “They need to hire a development shop or developers who are skilled in mobile software development with engineering degrees and expertise in the field to develop their apps and embed the code into the advertising.”

Barger believes it would be easier if “it were standardized to paint all smartphone users with the same brush.” However, with a segmented audience, it forces us to look closely at our core demographic and how to best reach them, no matter what device they are using,” he adds.

For those looking to learn more about AR in mobile advertising, Whitfield suggests attending Cellular Telecommunications Association and Mobile World Congress annual events while both Barger and Collins recommend SXSW that’s held in Austin every March.

Using Social Media In the Workplace

By James Zipadelli

A survey by Accenture says that everyone needs to learn how to use technology and the knowledge that young adults age 14-27 — millenials — bring to the workplace, because the “old” IT rules need not apply.

In, “Jumping the Boundaries of Corporate IT: Accenture Global Research on Millenials Use of Technology” young adults in the U.S. and Asia-Pacific also have a more positive view of technology, whereas in European nations such as Italy, France and the Netherlands, technology is seen more negatively.

The anonymous survey was done over an 18-month period in 13 countries around the world, excluding Africa and Antarctica, says Gary Curtis, Accenture’s chief technology strategist. Accenture is planning follow-up research over the next 18 months and they hope to have new U.S. data by the end of 2010.

Survey findings

• 77 percent of U.S. young adults say, “Technology helps improve the quality of my work.” 62 percent surveyed in Asia-Pacific feel this way and 32 percent agree in Europe.
• 73 percent surveyed in the U.S. say, “Technology helps make it easier to communicate with my peers and supervisors.” 53 percent agree in Asia-Pacific and 34 percent agree in Europe.
• 30 percent surveyed in the U.S. age 18-27 say, “State-of-the-art equipment and technology will be vital in my employer selection.” 65 percent in India agreed with this question.
• Working adults in China spend the most time — 33 hours per week — on social media Web sites, texting or instant messaging. Their U.S. counterparts spend 19.3 hours per week on those sites.

Curtis, 60, says this research has helped him understand the value of technology and social media. ”For example, I wasn’t an active Facebook user prior to research,” Curtis says. “This has real value, I’m a regular Twitter user, but I have found sources that are very interesting. I fly almost 400,000 real miles per year.”

Curtis hypothesizes that there is a correlation between technology and the work/life balance.

“A lot of new technologies extend business availability into personal life. On my Blackberry, the thing never stops giving messages,” Curtis says. “I get 300-400 per day. The fact that I have a device more or less enables me to deal with it. Those things become part of your personal space, they can rob you of personal life balance. These technologies become an extension of work.”

According to Curtis, he does put his Blackberry away from time to time, but not for long.

“I go places where there is no digital service on vacation. Much of Baja [Calif.] does not have digital service,” Curtis says. “I find it to be refreshing but after a few days I find I’m falling behind in my work. You have to make choices in work and life balance.”

‘Millenials’ speak up about technology and work
Working adults DigitalMediaBuzz.com spoke with say technology is very helpful in the workplace. “I use social media websites every day, all day, for work specifically,” says Stephanie Robinson, an associate at R|F Binder, a public relations firm in New York City. “Once I get home I don’t do as much.”

“A variety of my clients are on twitter and Facebook, and I have had the opportunity to advise them on the launch of their pages,” Robinson, 24, says. “We host social media meetings every Friday and help with Twitter chats once per month. We’re looking to partner with mommy bloggers and are always looking for different ways we can promote our clients’ pages. Facebook has been an amazing platform for consumer interaction for my clients.”

Robinson’s colleague, Tara Maroney, 25, says she finds social media websites useful at work. “I use both Facebook and Twitter for clients, and in the past I have also monitored a LinkedIn page for a client,” Maroney says. “Twitter is valuable because it gives me a quick snapshot of what’s happening in the news.”

“I am an avid New York Times follower, and getting instant updates of what’s happening helps me do my job better,” Maroney continues.  “I also follow a number of reporters and this gives me insight into the types of stories they are working on and what sources they might be looking for. Facebook I find less helpful from a professional standpoint but I do use it to see what’s going on and to monitor if anyone is talking about my clients.”

Kate Farber, the firm’s director of interactive solutions, says it’s beneficial to use social media to reach out to clients. “No matter the age of us or our clients, everyone is very interested in getting involved with social media and we’re here to help them do that,” Farber, 27, says. “A lot of the Millenials in my company read blogs and Twitter to keep up to date on their areas of expertise. They’re pitching journalists via Twitter, connected with them on LinkedIn, reaching out to bloggers, etc. Social media has really become an integrated part of the PR business.”

According to Farber, personal and professional lives become blurred with technology, so she advises employees of any age to use good judgment while online.

“Some of the ‘best practices’ we recommend to our employees and clients alike are to practice full disclosure when engaging in social media - make sure whoever is reading your comments know your connection to the company or brand,” Farber says. “Also, taking the time to listen to what others are saying online is crucial to successfully engaging them. And don’t forget, when you write something online it could theoretically live there forever - clients, employers, the media - basically anyone could read it.”

Robinson says she limits the amount of personal information she posts on Twitter and Facebook. “Even though I have some of my friends on Twitter, and it’s my personal page, I would never write anything inappropriate because I’m still representing the company and still representing the client,” Robinson says. “I will Tweet interesting stories from food blogs or other online sites, which is helpful for my clients and for me. I do accept friend requests (on Facebook) of some of my colleagues, but I don’t go out of my way to friend them considering I still have pictures from high school and college on there.”

Developers Mixed on Yahoo!’s Open Strategy

By John Greaves

Yahoo! has unveiled its Open Strategy to mixed reviews. The strategy, which is designed to fit in with Yahoo!’s commitment to make its platform more social, is meant to make it easier for developers to build. According to the Y!OS introduction on the Yahoo! Developers Network Blog, “Through YOS, we’re rewiring Yahoo! so that developers can tap into benefits once only available within Yahoo! Namely, you can leverage the content, traffic and user base of Yahoo! to extend your presence on the Web.

According to Sandeep Mundra, whose company IndiaNIC has developed for Yahoo! since 2001, although IndiaNIC is not exclusive to Yahoo! they feel they get the best deal from Yahoo! and they are open to possibilities presented by Y!OS. “It’s very exciting and from this Open Strategy we probably link different kind of models available on the Yahoo! Developer Network to not only on the Yahoo! site but other sites as well. And they’re giving the easy interface so for a developer it’s very exciting,” Mundra says.

However, other developers say they are unimpressed with Yahoo!’s moves so far. Phil Michaelson a developer whose list building and sharing product KartMe builds on Amazon, Google and eBay says Yahoo! needs to do more loosening of restrictions.

“I’d looked at using some of their APIs (e.g., search monkey and Yahoo BOSS) about a year ago. At the time, they didn’t give the end user enough control over how to display data. Now as I review the terms, they’re too restrictive. Offering APIs does not make your service open,” Michaelson says.

A quick visit to the Yahoo! Developer Network blog reveals on the one hand a lot of exciting information from Yahoo! about various innovations such as The Yahoo! Applications Platform that “represents the first time that Yahoo! is opening up the “canvas” of Yahoo! to developers, allowing developers to easily author and publish apps across the Yahoo! network,” reading responses to comments on the potential shut down of MyBlogLog shows the anger and confusion some developers feel.

The potential shutdown of MyBlogLog is not an isolated event. According to blogger MG Siegler, “At a time when many tech companies are starting to launch new projects again and excitement is building, Yahoo keeps shutting things down.”

Mundra says he is concerned over one shutdown in particular. The Shopping API is scheduled to be discontinued as of March 11, in favor of Yahoo! partnership with PriceGrabber.

“That’s a question asked by my clients because my Yahoo! clients storefronts are using 100% Yahoo!-owned shopping engines and from the shopping engines most the clients are getting very good leads. Moving that shopping engine to Price Grabber I think is a very, very hard decision so we’ll need to work very hard on that.” Many developers like IndiaNIC will be hard hit by this because unlike Yahoo! Price Grabber doesn’t offer a free web services API. The YDN advises developers “If you wish to continue to display syndicated shopping results for products listed on Yahoo! Shopping, you must apply to Price Grabber for shopping syndication services. Although they do not offer a free web services API, you can find out more about how to apply to their program here.”

One thing that may allay developers’ fears is a promise by Neal Sample, vice president of Yahoo! Open Strategy: “How we are determining which APIs we support on the Yahoo! Developer Network.” Sample also promises to give more information on progress on the Yahoo! Query Language, Yahoo! Application Platform and Social APIs.

Despite these concerns, Mundra indicates his company will stick with Yahoo! both because he believes the company’s new social focus is good for business and because he likes how the platform compares to other available outlets.

“In the last couple of years social media marketing is buzzing the market and we’re getting a lot more clients who want to integrate it into their store, so with the Open Strategy it’s going to shorten our development time.”

Still Mundra says he would like to have better communication. “Yahoo!’s support is very good but we need more support and better communication from them regarding what development is going on so we can always ready ourselves with marketing and get support ready on that. We don’t want surprises,” Mundra says.

While Yahoo! may be able to rely on the loyalty of companies such as IndiaNIC to attract developers away from competitors, Michaelson says the company has to send a signal that it is willing to make moves to allow them freedom to profit.

“Yahoo’s restrictions on data display and service monetization lead me to conclude they’re not serious about being open. If they were serious, they’d just set a cap on traffic,” Michaelson says. “No need to prevent development from sites that are trying to innovate. They should let partners innovate, and once partners are succeeding, then look to profit.”

Sample says about the Y!OS, “One thing to note today: Yahoo!’s commitment to openness is reflected in the design of recent platform releases. That is right. The truth is in the architecture. Our Open platforms (YAP, YQL, YUI, etc.) will stay and will stay open. YQL technology offers all developers an open, scalable, plug-and-play platform with the same flexibility and security we require for our own production deployment. You have the ability to wire up alternative APIs using YQL’s Open Tables. Now that’s a commitment.”

Google Broadband: One Giant Step For Google

By James Zipadelli

Google is planning on building and testing its own high-speed broadband networks in select U.S. cities, the company announced in its blog recently. The company has put out a request for information (RFI) until March 26 to see how many communities want to participate in this experiment. A Google spokesman says, “We will connect at least 50,000 and potentially up to 500,000 people, in one or more trial communities across the country.”

One city that is participating in Google’s experiment is Baltimore, Md. A team of technology and business leaders began working Feb. 22, and entrepreneur Dave Troy says Baltimore’s government and research institutions are also on board. “We hit the ground running,” Troy says. “We have world-class research institutions (the University of Maryland and Johns Hopkins University). One of the things Google listed is 3-D medical technology. This is something that Hopkins has done. We can do that right here.”

According to Troy, there were other reasons Google’s experiment benefits the city. For example, Baltimore’s proximity to Washington, D.C., makes it helpful if there is a question on regulations. The American Recovery and Reinvestment Act, which President Obama signed Feb. 17, 2009, included the Broadband Initiatives, which has essentially the same goal: to “accelerate broadband deployment in unserved, underserved, and rural areas and to strategic institutions that are likely to create jobs or provide significant public benefits.” Troy says that Google’s experiment helps because it creates competition. “Not only is Google getting access to more people, but they are doing it by using an open access approach,” Troy says.

Asked for clarification, the Google spokesman says, “We will allow third parties to offer their own Internet access services, or other services, using our network. We believe this approach will maximize user choice as well as spur greater innovation and competition. Most providers in Europe and many places elsewhere in the world operate open access networks.”

The National Cable & Telecommunications Association, which represents cable operators, is optimistic. “We look forward to learning more about Google’s broadband experiment in the handful of trial locations they are planning, says spokesman Brian Dietz. “The cable industry has invested $161 billion over the past 13 years to build a nationwide broadband infrastructure that is available to 92 percent of U.S. homes, and we will continue to invest billions more to continually improve the speed and performance of our networks and provide tens of millions of consumers with the best possible broadband experience.”

Not everyone is pleased with Google’s experiment, however. Scott Cleland, president of Precursor and chairman of NetCompetition.org, called Google’s announcement a “PR stunt.”

“This is classic Google,” Cleland says. “Everything is about them. When the nation is trying to move from a jog to a run, they’re wanting to take airplane rides.” Cleland says the timing of the announcement was poor because it coincided with the National Broadband Plan.

“They want a gigabit to the home, which is 50 times more than people have right now, and there aren’t any applications other than Google’s plan that takes advantage of that network,” Cleland says. “Google is the biggest bandwidth consumer in the world because YouTube broadcasts over the Internet and it’s 14 times bigger than any video broadcaster. Google is constantly crawling the trillion pages on the Internet.”

AT&T spokesperson Jenny Bridges was cautiously optimistic. “We commend (FCC) Chairman (Julius) Genachowski for his plan to set an ambitious goal for broadband deployment in America,” Bridges says. “But in setting a 100mb goal, the FCC surely recognizes the massive investment by the private sector that will be required. As the Commission’s own broadband team estimated, it would cost an additional $350 billion to bring 100mb service to every household in America. It is thus all the more important that the FCC resist calls for extreme forms of regulation that would cripple, if not destroy, the very investments needed to realize its goal.”

Verizon Wireless spokesman James Smith says, “The Internet ecosystem is dynamic and competitive, and it’s delivering great benefits to consumers. Google’s expansion of its networks to enter the access market is another new paragraph in this exciting story.” To learn more about Verizon’s network, VerizonFIOS, click here. VerizonFIOS serves 16 states including Maryland and Washington, D.C., according to the fact sheet.

Baltimore’s Troy says the benefits for the city from Google’s experiment are just beginning. “It will make Baltimore a world-class destination for technology entrepreneurs,” Troy says. “It also will keep people here that might go somewhere else. The combination of those two things makes it extremely compelling.”

Gaming Consoles: Stop-gap Technology or Mainstay Trend?

By John Greaves

Gaming consoles have enjoyed a unique niche in our culture fueled by a fairly loyal and growing fan base. Now they face challenges to their product offerings on several fronts. Blu-Ray players and set-top boxes continue to compete with consoles for streaming video and television content and OnLive has emerged as a contender in the video game world with partnerships with game developers like Electronic Arts, Take-Two, Ubisoft and Atari.

The advantage game consoles have is a pre-established fan base, one accustomed to the world of online content, Internet streaming and more than stand-alone set top boxes like Vudu can offer. According to blogger Michael Wolf in a 2008 post for eHomeUpgrade, “The price tag for standalone boxes is more than most would pay, especially if they can get similar (if not equal) services through another box like a game console (which also, it goes without saying, plays games and DVDs)”.

According to Netflix vice president of corporate communications, Steve Swasey, his company is aware of the value consoles add industry wide. “There are three jewels to the crown and Netflix is wearing the three jeweled crown with three devices the Xbox 360, the Playstation 3 and we announced that we’ll be available on the Nintendo Wii in the spring. The Wii has sold 22 million units in the U.S. alone. So we are able to reach a lot of subscribers through these consoles alone.” This adds a lot of value for these consumers as Swasey points out that Netflix revolutionized the video rental industry by saving people from going to video stores.

Still it is significant that Netflix is not exclusive to consoles. “The goal here for Netflix is to be ubiquitous on any device to watch movie and TV episodes on. The game consoles are one way for us to reach that level of ubiquity. We also have deals with Blu Ray disc manufacturers and TV manufacturers like LG Electronics and Samsung and then of course stand alone devices like the Roku and TiVo, now we have more than fifty devices which stream instantly from Netflix,” Swasey says.

Add to that the fact that Boxee, arguably one of the fastest-growing software solutions for internet streaming content, doesn’t currently run on any game consoles. Andrew Kippen, vice president of marketing for Boxee, says he doesn’t know what technology issues would have to be addressed to get Boxee on game consoles but they’re interested in working with manufacturers to make it happen.  “We see Boxee as the Android of the living room - software that runs on TVs and any device that connects to them.  With game consoles already sitting underneath millions of TVs - we’d love the opportunity to provide our media experience on them.”

While Kippen acknowledges the attractiveness of the large footprint Sony, Microsoft and Nintendo have, he says Boxee is also watching a newcomer to the space. “I like the idea of something like OnLive as well. If we look at a platform like that, the minimum requirements that Boxee has probably gel pretty nicely with the minimum requirements that that platform has, so I hope one day we can create a Boxee OnLive box. We haven’t had any formal discussions with them but I think it would be a great customer experience to get that kind of all in one box for all of your entertainment.

Rob Green of Imagine Communications says, “I think consumers want the content they want, how they want, where they want it.” So in order to remain relevant it appears that consoles are going to have to do more.

Encouraging news for Sony and Nintendo at least is that Netflix appears open to the idea of coming to the PSP and Nintendo DSi handhelds at some point. “Long term we want to stream on any device you want to watch on,” Swasey says.

This means at least two of the big three can hope to increase the attractiveness of those platforms. Nevertheless, consoles cannot rely on pushing sales across their platforms to save them. As the danger of “box fatigue” grows the resulting push for cross- functional devices means that the race is on to plant flags in prized living room real estate and consoles need to be among those running. Console manufacturers seem to be reacting dynamically to the threat.

Microsoft which was the first gaming company to partner with Netflix, and has planned an IPTV offering since 2007, has announced that Xbox 360 owners in the U.S. will be able to get AT&T’s Uverse offering by this spring. Xbox Live members already have access to Zune, last.fm and social networking through Twitter and Facebook integration. According to blogger Michael Mahoney Microsoft also has a deal with British broadcaster Sky to leverage Xbox to stream live television programs, including sports, TV shows, and movies.

Mahoney says Sony and Nintendo are working with BBC’s iPlayer to provide recent television shows to their consoles. According to Mahoney, “A major benefit of console subscription-based service is it eliminates the need for set-top boxes and satellite dishes, a huge cost-saver for Pay TV operators to deploy, service, and upgrade.”

Another major offensive strategy is gaming consoles’ encouragement of social networking in their fan base. According to a December 17, 2009 Sony press release, “10 million users around the world have visited PlayStation Home to play games, attend special events, watch videos, listen to music, meet new friends, and launch into multiplayer PS3 games — averaging 60 minutes per visit. Over 250 community events have been held in PlayStation Home since its launch, many organized by the PS3 community.”

Sony is sweetening the deal at Playstation Home by giving Playstation 3 version 3.10 users the ability to “easily showcase their game accomplishments to friends and family, and post information about the PS3 games they purchase from PlayStation®Network to Facebook.”

It’s not clear whether these moves will be enough or whether current game consoles will join the Sega Genesis and Commodore 64 as museum artifacts.

Spinning Tweets of Gold: Twitter’s Revenue Model

By John Greaves

Twitter, the social networking giant that has revolutionized the way we interact with each other and search for information, seems to be planning to monetize using third-party applications. On the other hand, it might be planning to charge companies for access to its site’s products. Or maybe it will just sell ad space. It’s still not clear despite Twitter co-founder Biz Stone’s promise that we would know how his company plans to start making money in early 2010.

The question of Twitter’s move toward monetization has been a topic of discussion for years, and of course, Twitter has a history of promoting third-party apps without being paid for them. So intense is interest in how Twitter will monetize that a hoax last year concerning paying for premium accounts led to a firestorm of outrage that increased when protesters learned they were the victims of a prank by BBspot.

This is partly because Twitter’s investors have long maintained that they were in no hurry to make money off the micro-blogging site. Stone told reporters in 2009 the company wasn’t fretting about the need to monetize. “There are no dates when we need to break even. We have plenty of money in the bank,” he says.

The question remains, what is Twitter planning and will it be successful? In 2007 Evan Williams, co-founder of Twitter and the current CEO, let slip some of the ways he thought the site could generate income. “Two more-straightforward ideas: 1) Ads on the site. We have a little AdSense on there now, but we haven’t really tried. As the traffic grows, some tasteful sponsorships might be sellable. 2) Charging companies who are using it for marketing or other commercial purposes. If an organization finds Twitter to be a valuable communication tool with their customers/constituents/etc — especially if we’re sending lots of SMS’s for them, which cost us money — it seems viable to make an offering around that,” he said.

Steve Hofstetter, a comedian who has helped create apps for Facebook and the iPhone as part of promoting his brand, is enthusiastic about Twitter monetizing through ad revenue.  “Click on their website right now, you know they have that little useless twitter definition, who gets utility out of that? People in the office enjoy that, if you made that a tiny little ad; it doesn’t just give utility to Twitter, marketers put ads on sites because they’re good for the consumer, I’ve found good stuff through banner ads,” Hofstetter says.

Nevertheless, according to Radar Research founder Marissa Gluck there is a problem with simply relying on advertising to monetize social media. “In terms of advertising, click-through rates and engagement historically tend to be very low on social networks, consumers aren’t really there to search out products or to purchase, they’re not in that mode, they’re not in that mentality, so consumers are not really engaging with ads on social networks because they want to engage with their friends,” Gluck says.

On the other hand, Gluck points to the fact that Twitter wears many hats in the social media arena and can perhaps choose multiple revenue streams to be successful including the second option Williams mentioned. “Twitter is everything from a social network to an RSS feed to a broadcasting platform, so Twitter is a little bit different, which is why for Twitter it makes more sense to look towards paid subscriptions from commercial enterprises as well as advertising,” Gluck says.

Ian Swanson, the CEO of Sometrics, a company that helps developers and brands monetize the social Web, thinks Twitter is right to avoid the ad model for now. “If you look at the expertise of the company, you’ve got to say is this a media company, is this a company that belongs on Madison Avenue or is this a tech company? They really know their strengths. Hey we’re really good at building this platform, really good at the technology - so let’s allow the brands and third-party applications to build on top of our platform and if we go through and charge people for that access, almost like taxing the system, eventually they’re going to make money and that’s just a smart approach for them.”

This echoes comments made by Stone to the Reuters Global Technology Summit in May 2009. “”There are no people at Twitter who know anything about advertising or work in advertising. So we don’t have anyone there to make or take those calls,” Stone says.

It is obvious that third-party applications have figured out how to monetize using Twitter. A PR Newswire press release notes that TwitterJobSearch, the first real-time job search engine, has evolved its offering to include an In-Stream Ads service. Back in 2007, Steve Poland even blogged on easy ways to make money with Twitter using third-party applications. Ad.ly “enables Twitter publishers to make money from the content they produce on Twitter by sending one tweet every day from advertisers that they approve.”

The question is not whether it’s possible for Twitter to monetize itself. Rather everyone is wondering whether 2010 will be the year when Twitter begins to spin tweets into gold.

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