Googolisation

Twitter Ads

Posted in Digital and mind by Moe on April 14, 2010

From Bloomberg .com

Twitter Ads Add Intrigue 2010-04-13T20:55:00Z

By Scott Anthony

For what seems like forever, Twitter has been the white-hot startup staring at a critical, unanswered question: How will it translate hype, and seemingly never-ending traffic growth, into profits?

Yesterday the company announced its intentions to offer corporations the opportunity to sponsor Tweets. So-called “Promoted Tweets” will appear when people search for particular terms. Only a single sponsored Tweet will appear alongside search results. The Tweet will appear as long as it demonstrates “resonance” with the audience by being clicked or re-Tweeted. Twitter doesn’t plan to charge companies whose sponsored Tweets don’t generate high resonance. Presumably Tweets with high resonance scores will pay price premiums.

What’s to like about this move? While it’s easy to dismiss “Promoted Tweets” as just another advertising play, Twitter’s attempt to measure resonance is intriguing. Remember, companies don’t advertise for advertising sake. Rather, they advertise to help them achieve other business objectives, such as attracting new customers, or further enhancing brand loyalty. Finding novel ways to track the impact of advertising — and pricing that advertising accordingly — carries interesting potential.

Also, Twitter recognizes that its quest to develop its business model is just beginning. Senior executives plan to proceed at a judicious pace (aided, of course, by the $160 million the company has raised from venture capitalists.) The company is still in learning and experimentation mode, which is appropriate given uncertainties around its new business model. After all, it took Google a couple of years before it ironed out the kinks in its search-based advertising model.

So, there’s a potential twist and a sensible way for Twitter to learn its way to success. While this doesn’t yet classify as a breakthrough, it is an encouraging development for Twitter.

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