Just over 4 years since the first Tweet was sent, Twitter has announced its plan to sell advertising on Twitter, by the name of ‘Promoted Tweets’.
A good interview of Twitter COO Dick Costolo on CNBC gives quite a bit of detail on the plan:
This announcement has been extensively analyzed, so I’ll just add a few quick thoughts to the fray:
* Twitter has already been making significant money selling data feeds from everyone from Google through to start-ups. This is another string to their revenue bow, albeit a far more visible one.
* The key concept of ‘Resonance’ (measured by nine factors including retweets and click-throughs) is fundamental to the initiative. Paid Content notes Costolo saying:
“The promise of Promoted Tweets is this: Brands and companies will not pay for Promoted Tweets that don’t resonate, and users will not see Promoted Tweets that don’t resonate.”
This keeps the focus on engagement and useful content. Those companies best able to use Promoted Tweets well are those who are already on Twitter, and understand what gets traction and what doesn’t.
* It is pretty radical from a traditional media perspective to say the client doesn’t have to pay if they don’t get results. That should wake up media companies who charge a fortune to show ads when the audience is taking a bathroom break.
* This provides a ready mechanism to respond to crises and negative commentary. Until now the only way to respond has been to have an existing strong social media presence which you can use to be heard. Now you can provide your perspective where it needs to be heard. WSJ writes:
Companies will “be able to increase awareness in that instance when the iron is most malleable,” said Anamitra Banerji, who manages commercial products at Twitter.
If a new movie is getting negative reaction, the studio could use the ads to link to a positive review, for example.
* Twitter is very sensibly treating this as an experiment which will be adjusted as data comes in. From AdAge:
During this roll-out, Twitter will study how resonance works and decide in the fourth quarter whether — or how — to take ads beyond search and into users’ Twitter feeds. “Is it great in search and horrible in the timeline? We are going to test and test and test,” Mr. Costolo said.
* While Twitter has been putting developers offside, and the tensions may rise, this could give a good monetization mechanism to some parts of its ecosystem.
* While some are up in arms about ads going into their Twitter stream, I very much doubt it will have a significant negative impact on the service. However time will tell.
To put this all into context, in his post Twitter co-founder Biz Stone points out the REAL reason for this announcement:
Believe me, when your name is Biz and you’re a co-founder of Twitter, it also means putting yourself at the mercy of folks like Stephen Colbert who hit home runs with lines like, “So, I assume that ‘Biz’ in ‘Biz Stone’ does not stand for ‘Business Model’.”
More on Promoted Tweets will emerge from Twitter’s Chirp developer conference today and tomorrow.