Twitter to start pushing advertising to users

Twitter on Tuesday introduced a new service called Promoted Tweets, which will let companies send ads in the form of ordinary messages, according to a blog posted by co-founder Biz Stone.

The introduction is an important step for the company, since it represents the first step towards turning the microblogging service into a money-making venture.

Users will start seeing paid messages, which will be labeled "promoted," at the top of some Twitter.com search results pages, according to Stone. Initially, up to 10 percent of users will see the promoted messages. Twitter will work with Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks, and Virgin America, to roll out the first ads, he said.

Twitter roll out the Promoted Tweets in several phases, with Tuesday's announcement marking the first. Before Twitter develops the service further, the company wants to get a better understanding of the "resonance" of Promoted Tweets, the user experience and advertiser value, Stone said.

Future changes to the ad service could include showing the messages in users' message timelines, he said.

"This is a relatively conservative approach to advertising on Twitter's part. It could have done something much more experimental and risky," said Andrew Frank, a Gartner analyst, in an interview.

"Starting with search, which is a pretty well understood medium and moving to basic promotion of tweets on a user's stream based on contextual resonance strikes me as the easiest thing to sell they could have come up with," Frank added.

Frank expected Twitter to have a stronger component of marketing intelligence in its advertising system. Thus, instead of just placing "tweets," Twitter could mine its vast chest of data to offer marketers deep insights into what people are saying about their products, what audiences the marketing strategy is resonating with and what's the current buzz about their brands, Frank said.

"I was expecting something more balanced between a listening platform and an advertising medium," he said.

The big question is how effective these ads will be and, consequently, how justified it will be for marketers to spend money on a Twitter ad campaign compared with cultivating their Twitter presence organically, Frank said.

Forrester Research analyst Josh Bernoff is optimistic about Promoted Tweets. "Of all the places Twitter could include ads, this is the least obtrusive and the most relevant. People will not desert Twitter for this. It's inevitable -- technology services need revenue," he wrote in a blog post.

The ads will be effective because they will be relevant to user searches, which is the Google model, and they will resonate with Twitter users, who are "highly influential," Bernoff wrote.

"Recommendation: keep the promotion mild at first, to avoid a backlash. Just go for awareness, and include a link for people who want to learn more," reads Bernoff's post.

The ads will have to fight to get user attention. Twitter will attempt to measure whether the advertising messages interest users and stop showing those that don't, according to Stone. They will have all the functionality of a regular message, including the ability to reply, retweet and favorite.

On Tuesday, Twitter's COO Dick Costolo will be talking about the offering in detail at the AdAge Digital conference, according to Stone. Costolo and CEO Evan Williams will further discuss Promoted Tweets and what it means for Twitter developers at Chirp, Twitter's developer conference, on Wednesday, he said.

Updated at 11:40 a.m. PT with analyst comment.

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