Analysis & Opinion

Twitter’s new ad model

April 13, 2010 Edward Boches

When are they going to make money? How can their valuation be so high? Remember MySpace and Second Life? Or even AOL? Platforms that were flying high and then hit a virtual ceiling.

Well it appears Twitter may finally have an answer. Or at least a first step. The fast growing micro-blogging service – from 500,000 to 22 million monthly uniques in the last 12 months – announced Promoted Tweets this week.

Advertisers will be able to buy keywords, which will return branded tweets when those keywords are searched. For example, search “Panera” and you could get the café’s most recent post at the top of the search rather than the community’s most recent updates, responses or conversation about the brand.

Paid posts that appear without having to search will follow soon.  These brand generated Tweets will appear in a user’s stream based on perceived relevance to that individual’s interests. Twitter will attempt to determine whether a brand message makes sense based on whom you engage with and follow. Keeping tabs on Lance Armstrong? Expect a Tweet from Trek bikes.

It might take Twitter and brands a while to determine the value and efficacy of promoted Tweets. Initially the platform plans to charge based on how many people “see” a post in their stream, whether they replied to it, RT’d it to their followers, or clicked on an embedded link.

No doubt this will take a while to figure out. If you follow 5,000 people, for example, even a paid Tweet won’t stand out. (Good for the  user if she doesn’t want it; bad for the brand trying to engage.) On the other hand if you follow 200, it might be rather prominent in your stream.

Promoted Tweets will be tagged as such, so it’s my guess that people won’t really mind them, as long as they don’t become too prevalent. My advice to Twitter is to put limits on how many promoted Tweets can show up in anyone’s stream in a given time frame. We all know how annoying it is to log into Facebook and find our page dominated by brand or media posts treating Facebook as if it’s just another RSS feed.

As someone who spends a lot of time using Twitter as a marketing tool, my one caution to all brands would be to avoid thinking this is the easy way out. Pure advertising messages on Twitter will be rejected by users. And anything less than a well-planned conversation strategy that takes into consideration a balance of paid Tweets, earned engagement, and genuine interaction with your community is destined to fail.

I think this is great for Twitter if it earns them some revenue. But we’ll be advising our clients to make sure it’s only one aspect of their Twitter strategy. What do you think?  About time?  Or one more opportunity for a brand to intrude on a user’s social space?