The pulse of Alexander Interactive

The news that Twitter is getting into the advertising business has exciting implications for companies ready to harness real-time conversations for ecommerce activity.

Companies with products and services to sell will be able to tap into the immediacy of conversations on Twitter and provide targeted offers in real time. Frustrated with a travel booking? Post a tweet and watch as a travel agent enters your tweet stream. Bouncing around ideas on which shoes to buy? Watch an ad for Zappo’s appear at the perfect moment.

If executed well, it’s the kind of advertising that consumers might admit to enjoying. More relevant than display ads and less intrusive than mobile, Promoted Tweets–once the kinks are smoothed out–could be downright useful.

Consider: C.C. Sabathia of the New York Yankees pitches another great game and completes his no-hitter. People (including, probably, this author) are tweeting rapidly about the feat, starting in the middle innings and hitting a crescendo around the end of the game. As the volume hits its max, Steiner Sports (an Ai client) inserts ads into the chatter: “Buy Sabathia’s game-worn jersey from his no-hitter! Get details now.” Instantly thousands of people are tuned into an item that might appeal to them at the moment of its maximum appeal. It’s search marketing for conversations.

Twitter’s conversations are essential, of course, and Promoted Tweets will have to be obvious without being intrusive. With the right execution, though, they will be huge.

Like a newborn baby, an idea is sensitive and needs special care. If you are not careful, you can actually kill an idea. On the other hand, if you nurture an idea, you can see it from conception to incubation to realization and application.

Here are some links to guide you through the nurturing process that can help you give constructive feedback.

1. Ways to kill and ways to help an idea: A good list of what to say and what not to say.
2. How to kill an idea, or help it grow: More suggestions.

If you have any other tips on helping an idea succeed, please share them with us.

I’ve spent the morning fascinated by Swoopo, a new (to the US, at least) online auction site, which is both more and less innovative than its peers–and a great business model case study.

The site turns eBay’s successful auction model on its ear. eBay uses fixed-duration auctions, free bids, and sellers’ fees for revenue. Swoopo, in contrast, sells bids to buyers, who then bid in 15-cent increments on products. If an item gets a bid in the final 15 seconds, the end time is extended, giving other bidders a chance to dive back in.

This is at once radically different–from eBay–yet more similar to the traditional auction business. In the real world, auctions don’t stop short at 10:13:32; they go until the high bidder has outlasted the competition. Swoopo allows this to happen.

Placing the operating-cost burden on buyers is a shift as well. With bids costing 75 cents each, buyer aggressiveness is artifically limited; the multiple bids required to win a typical auction raise the final cost to the winning bidder. Interestingly, competing (losing) bids help subsidize the winning buyer, which may deflate prices.

The open-ended auction timing is what fascinates me most. I watched a Playstation 3 controller auction on the Swoopo home page ratchet up from $23 to nearly $41, all in 15-cent increments, for several minutes before the auction ended. Sniping is eliminated, and in its place is a tense few minutes and frequent page refreshes. And, most likely, a handful of additional bids, each adding 75 cents to Swoopo’s bottom line.

Swoopo has a remarkably clever (or truly wicked) business concept. It’s also beautifully timed. As eBay evolves away from auctions, the market is probably ready for a savvy competitor to nibble away at market share.

Expect several Swoopo (and eBay) competitors to appear in the next year or two, all with new twists on the auction model. And keep a watchful eye on eBay, which may or may not realize that its auctions, while slowing in growth, are the make-or-break business proposition of its flagship.

Update: this write-up of Swoopo is worth reading, as it notes the clever (if insidious) model behind the business, and also exposes some of Swoopo’s questionable business practices, which I hadn’t caught on first observation. “It’s not clear that Swoopo even has the items they auction; they appear to sell first, then use the money they gain from the completed auction to buy and ship the item. Furthermore, they have a clause in their Help under Delivery and Shipping that lets them ship ‘equivalent’ items.” The post later calls Swoopo “pure, distilled evil,” which may be pushing it a bit, but point well taken.