Twitter Wants Ad Money
04.13.10, 1:15 PM ET
Twitter’s advertising model is no longer under wraps.
The social-networking site’s ad plan, Promoted Tweets, launches today and will work a lot like Google’s AdWords. When users search Twitter for keywords and what people are talking about, Twitter will run ads that marketers have bought to run against the search. The San Francisco company also plans to display promoted posts in streams of relevant user posts.
The first companies on board to reach out to Twitter’s 20 million-plus unique visitors per month include Best Buy, Starbucks, Bravo and Virgin America. They’ll pay an undisclosed price per thousand people who see their posts. If posts don’t get passed on to followers or get user clicks, Twitter will stop running them. The company’s founders want the ad stream to be as organic as possible.
Steve Rubel, senior vice president and director of insights for Edelman Digital, shares his reactions to Twitter’s ad tactics.
Forbes: What's most surprising about Twitter's Ad platform?
Steve Rubel: What's most surprising about the rollout is how conservative it is. It's clear that Twitter thought a lot about all three of its primary audiences - users, developers and advertisers - and devised a system that seems to respect the needs of all three. They could have been a lot more aggressive by focusing only on display or rich media but they chose a more measured, contextual approach, which I think will help them in the long run.
What do you see as the most significant component?
The most significant component is resonance--the nine factors that Twitter will use to measure the performance of the ads. If an ad isn't performing well across all of these key performance indicators, then the ads will be taken out of rotation. It's very similar to Google's model, which has helped the ads maintain a high degree of relevance.
What about it will be most useful to marketers?
The most intriguing aspect of the platform is that it allows businesses to add a degree of permanence to their tweets. This means that they can maintain some degree of visibility, long after they have floated downstream.
The reason this is significant is that the "destination Web era" (where we browse from site to site) is over. Today, more of us are consuming content in stream form. If you're not in the stream when a tweet hits, you're likely to miss it. With this new program, advertisers can now pay to get around this - which is significant - and target their tweets accordingly.
Working for a public relations firm, I am particularly intrigued by how Twitter is positioning it as a reputation management service for companies in crisis.
What could Twitter have done better with its ad platform plans?
It's a bit early to tell, but so far nothing. It might have been better if they opened up the process a bit to developers and power users to weigh in, but I am not seeing any kind of backlash so far. I believe that Twitter's audience wants to see them monetize in a way that allows them to maintain and grow the platform they love. The trick is to do so in a way where the advertising adds value to the experience and doesn't get in the way. This seems to hit this nail on the head, but time will be the ultimate jury.
What will happen to the other paid Tweet platforms?
Twitter is at a crossroads right now. It is starting to add some of the features that have allowed some vendors in its ecosystem that filled voids to thrive. The trick for these platforms will be to stay ahead of the game. Ideally Twitter will open a dialogue with them to give them a sense of the markets they plan to enter and those they plan to avoid so that the ecosystem can build viable business models without having to worry about them being disrupted by the mother ship.
Is there anything about this ad platform that is disruptive either to other social ad platforms or to the way that marketers interact with social consumers?
It's a bit early to tell how disruptive this will be. It all depends on how well the ads are received by the community and how well they perform. It could potentially create a nice direct response platform that complements other, brand-oriented models like those that have made ads on Facebook and YouTube successful.
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