Earlier this week, Twitter CEO Dick Costolo announced that Twitter may not rely solely on ad revenues in the future. Rather, he suggested that Twitter might find a new model by taking a more active role in the transactions currently happening on the platform. He offered no details, and said that advertising will continue to be the dominant business model. Here are a few ideas of how Twitter could create an e-commerce business model:
Sell Cost-per-Acquisition Ads Twitter sells most of it's ads based on engagement, like followers gained, or retweets. Many advertisers, however, will sell based on the acquisition of customers, and charge a higher premium. Twitter could sell ads where advertisers only pay when an item is purchased.
Sponsored Shopping Tweets Sponsored Tweets are called out in your Twitter stream. Allow those selling goods a new "shopping" callout to identify an e-commerce related Tweet. Charge for the ability to stand out.
Tweet-to-Buy Allow people to enter payment and shipping info into Twitter or connect through a partner like Paypal or Square. Buy from verified merchants simply by Tweeting a specific keyword.
I do believe that Twitter is leaving a ton of revenue on the table right now, and that they've been slow to create their ad offering. Hopefully this is a signal that will change.