Recently Twitter announced their first step toward a business model via the ad unit - Promoted Tweets. At 140 characters in length, Promoted Tweets look and act like standard (free) Tweets only they will be keyword targeted, highlighted when moused over and serve at the top of Twitter search result pages. So, in a sense Twitter has followed in the tradition of paid search by aligning their ad placements with their core content offering both in keyword relevance and appearance.
There have been plenty of articles and blog posts covering the details of this launch so I will just share a few initial thoughts and spare the world from regurgitating the little we still know.
- This is bigger than Twitter, is it a new search opportunity? Twitter intends to roll out Promoted Tweets in a series of phases, initially only in their search results pages. They openly suggest however that the ultimate opportunity is in rolling this out across the Twitter ecosystem, an ecosystem which also happens to include Google and Bing's organic results. This suggests a tremendous opportunity for marketers to expand reach and market share within the meat of the search engine results page (SERP). An area of the page front and center traditionally reserved for organic listings. Of course, in order for this to happen the engines will have to play ball. But it's a revenue opportunity, can they afford to resist?
- What's up with 'resonance'?? Ok, I get it. It's all about user experience so only serve qualified relevant ads, but Twitter you need to make sure this works in your favor. What am I talking about? Here's my take:Promoted Tweets are priced on the paid search bid/relevance structure adapted to the Twitter environment . They will apply a CPM bid/'?resonance'? (think Google Quality score but based on re-tweets, CTR and other factors) model. The intention here is seemingly to ensure relevance among marketer's messaging in that only the most engaging ads will survive. Marketers will thus be incentivized to develop creative that adds value to their respective audiences. The theory behind this makes sense however it is the application that throws me off. One of the main reasons why paid search works (i.e. $$$) for Google and advertisers alike is that both are typically aligned. Marketers are incented to develop highly relevant and targeted ads (calculated by CTR) and are in turn rewarded by reduced CPC rates. Google is also rewarded as the higher revenue driving ads gain primary positioning and distribution. Twitter's choice of CPM model seemingly does not deliver this same alignment. Higher 'resonance'? i.e. re-tweet or reply rates'?¦may result in greater reach for the advertiser, but what's in it for Twitter? Yes, it does ensure better ad relevance but at first glance it doesn't make Twitter more money. It is still early and very little has been disclosed so perhaps it's premature to be critical...or I'm just missing something. That being said, if this is accurate we should expect further changes to come.
Indeed, there are more questions than answers at this point. The one thing we know for sure is that between Facebook's recent announcement of Open Graph and the launch of Promoted Tweets, 2010 is off to an exciting start.
