Twitter’s Money-Making Strategy Finally Launched – Promoted Tweets Are Live

Twitter announced their long-awaited advertising model last night: Promoted Tweets. Companies and people will be able to purchase tweets that will show up first in certain search results or right in people’s tweet streams. Which, if you rewind the clock a few years, is exactly the sort of thing that used to get people all upset with search engine results…and is one of the (many) reasons that Google won the search wars: they kept their sponsored results and organic results separate. It will be interesting to see if the world has changed in that time.

Initial customers of the platform include Virgin America, Bravo, and Starbucks. Advertisers will bid on keywords based on a CPM basis initially, but later on Twitter intends to launch a “resonance score” metric that will judge how much reach and impact individual sponsored tweets have, based on favorites, retweets, and views.

Key Points:

- Twitter will hopefully now be able able to add another revenue stream to monetize its model
- Brands will be able to insert themselves into the conversation, but will have to ensure their message is valuable and well-targeted in order to meet relevance hurdles
- The media and ad industry may see progress in establishing more useful and comprehensive performance metrics for targeted buys via social media – how users respond to the message, if they retweet it, reply to it, post it, blog about it, etc.
- Twitter users will either find the message valuable – or intrusive and not relevant to what they were searching for.

In a lot of ways, it’s like Digg Ads, the social media company’s successful advertising model. Both use user interaction with ads in order to determine the price and longevity of specific ads.

Twitter refers to this as a “non-traditional” and “easy” strategy that “makes a ton of sense for Twitter.” Promoted Tweets are described as ordinary tweets that businesses and organizations want to highlight to a  wider group of users.

It’s an idea observers of the company have suggested for quite a long time, although it’s still unclear whether those types of queries will monetize nearly as well as conventional search. Sensitive to keeping the user experience free of annoying marketing messages, Twitter will boot sponsored tweets if they’re aren’t receiving lots of replies, clicks or retweets. If this happens, advertisers won’t have to pay for the tweets. … Search ads and in-stream advertising should come as no surprise. After Twitter bought search engine Summize in 2008, search advertising was a fairly obvious approach to monetization. That said, the company has a bit of an unusual take on it. The search ads will appear at the top of results, not on the side like with Google results and Twitter is using a system they call ‘resonance’ to pull out ineffective advertising.

According to a report by the Altimeter Group, a San Mateo consulting firm, sponsored tweets may shock Twitter users at first, but they will find they still have the power to select and reject, which also means advertisers still must pay close attention to the tweet-o-sphere. “This isn’t traditional spray and pray,” the report said.

To start out, Promoted tweets are appearing in Twitter search results. Twitter Co-founder Biz Stone says the company wants to make sure they’re useful to users so they’ll attempt to measure whether they “resonate” with users. Indications of resonation include engagement activities like replying, retweeting, and favoriting. If a promoted tweet doesn’t resonate, they’ll stop showing it, which also begs the question whether this paid business model is going to work for Twitter or it will go into oblivion dues to this ad poisoning.

I think promoted tweets are okay if it goes along with the interests and info you share on a regular basis. But at the same time, I would be worried that twitter advertisements become irritating and spam-like in quality. And there certainly needs to be clearly defined verbiage stating it as an advertisement. More details about Promoted Tweets are expected to be shared by the company this week at an AdAge conference, and at Twitter’s own developer conference, Chirp.

Whether or not Promoted Tweets will be thought of as spam (ultimately causing the death of Twitter) or relevant messages depends largely on how users respond to the ads, and whether the ads are seen as intrusive once Twitter starts injecting promotional messaging into users’ regular streams. But the fact remains that Twitter must figure out a way to bring in revenue beyond the search deals it has signed with major search engines like Google, Bing, and Yahoo. Stone’s blog post did not say whether Twitter would offer a fee-based, ad-free version of Twitter for those who prefer not to see any advertising.