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Twitter’s Buy button unlikely to be a big revenue driver

Twitter’s testing of a “Buy” button gives social shopping a boost, although the move is not likely to significantly enhance revenue, given the social-media site’s strength is handling quick, fast information rather than ecommerce.

Coming six weeks after Facebook announced it was testing a “Buy” button, Twitter said giving users exclusive access to offers and merchandise they can act on right in the Twitter applications for Android and iOS will give sellers a new way to turn the direct relationship they build with their followers into sales. Industry sources are split on the impact the move could have.

“Twitter needs to find more ways to monetize the visitors that are using its site,” said Ken Wisnefski, founder and CEO of Internet-marketer WebiMax. “But truthfully, I don’t think Twitter is a vehicle that’s going to see huge value from an ecommerce function. I don’t think people view it as that type of platform.

“I think people will look at products on Twitter and go into more investigation and make purchases further downstream, but I’m not certain it’s going to be a windfall of revenue for Twitter.”

Few taps
Twitter partnered with Fancy, Gumroad, Musictoday and Stripe as platforms for this initial test, with more partners to follow soon.

Twitter’s blog showed how an entire purchase can be completed in just a few taps.

After tapping the “Buy” button, the user will get additional product details and be prompted to enter yshipping and payment information. Once that is entered and confirmed, order information is sent to the merchant for delivery.

Payment and shipping information is encrypted and safely stored after the first transaction, so the user can easily buy on Twitter in the future without having to re-enter all of his or her information.

One’s credit card is processed securely and will not be shared with a seller without permission, Twitter said.

Not all observers agreed that Twitter’s move would fail to boost revenue.

“Twitter is under pressure to monetize its service and the addition of an immediate call to action, linked to tracked, proven ecommerce and mobile commerce sales might move this bar in a big way,” said Wilson Kerr, vice president, sales and business development, with Unbound Commerce.

“Measuring social influence is not easy, but, as mobile and traditional ecommerce continue to explode, the call from retailers is no longer just drive foot traffic,” he said. “If Twitter can aggregate and track the direct influence of tweets on sales, they can open up the ability to retain a  percentage of these sales.”

The emergence of Amazon 1-Click has made consumers increasingly comfortable with the notion of a buy-now button, Mr. Kerr said. The sharing of product information happens all the time, but now Twitter can claim ownership of the power of tweets to drive sales. 500 million tweets are sent daily and if even a tiny fraction can be linked to incremental sales, this could add up fast, he said.

With mobile a significant and still growing way that social networks are accessed by consumers, it is imperative that social commerce experiences be streamlined for easy use on small screens.

The Facebook test is being conducted with a few small and medium-sized businesses in the United States, with the social network assuring consumers on its blog that it has taken steps to insure the payment experience is safe and secure.

Linking social media
?“Twitter is not conducting social commerce, per se, but they are linking social media with the ability to conduct a purchase,” Mr. Kerr said. “The difference is they know that a tweet from the right person has the ability to generate a lot of mobile commerce transactions. By controlling this, Twitter can demonstrate lift and, if they want to, can ask for a percentage of revenue.

“Retailers and brands typically are willing to pay about 6 percent for affiliate marketers,” he said. “If Twitter can simply tap into this existing way of linking influence to the retention of a sales commission, they could be looking at some serious revenue implications.”

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York.