Twitter Makes a Move to Marketing

Tuesday Apr 13th 2010 by Kenneth Corbin
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After much speculation about ads, licensing deals and souped-up enterprise versions, Twitter debuts its promoted tweets platform, giving businesses’ tweets a prominent position on the site.

For the past couple years, as Twitter has edged closer to the mainstream and seen its user tally skyrocket, the social media company has been asked continually about its plans to make money.

Twitter's founders have dropped a few hints, but offered little concrete in the way of a business model, until today.

Twitter is launching a pilot program called "promoted tweets" that lets commercial entities pay for prominent placement of their tweets above search results on the site. Twitter says that promoted tweets will be clearly labeled to distinguish them from non-paid posts -- much like sponsored links on a search engine's results page.

Twitter bills the new method of integrating paid commercial messages as a less-disruptive advertising approach than the more conventional display ads, which add clutter to a site and likely would have drawn howls of protest from the vocal core faithful of the Twitter community.

"Over the years, we've resisted introducing a traditional Web advertising model because we wanted to optimize for value before profit," Twitter co-founder Biz Stone wrote in a blog post announcing the new business model.

While company officials have always been tepid about serving ads on Twitter, they have at times hinted at a revenue model built around a commercial version of the service with added features sold on a subscription basis to enterprise customers.

Twitter has also struck licensing deals with search engines Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT) and Yahoo (NASDAQ: YHOO).

Twitter is launching the promoted tweet program with a handful of advertising partners, including Sharp, Bravo and Virgin America. It will only display one promoted tweet on each search results page, and the company said it would monitor the placements for user reaction and attempt to "stop showing promoted tweets that don't resonate."

"If users don't interact with a promoted tweet to allow us to know that the promoted tweet is resonating with them, such as replying to it, favoriting it or retweeting it, the promoted tweet will disappear," the company said.

That approach recalls the feature on Facebook's advertising platform that allows users to vote ads up or down on the site, reflecting the cautious approach to social media marketing that aims to give users at least some control of the messaging.

As it moves through the experimental phase and collects feedback on the new ad platform, the company expects to broaden its advertising base and integrate the ad platform into the many third-party clients that people use to access Twitter.

Over time, Twitter said it will aim to integrate "relevant" promoted tweets into users' timelines. People who follow a brand that posts a promoted tweet will begin seeing those posts show up in their timelines immediately.

Stone said that Twitter executives will elaborate on their plans for the new ad service at the company's inaugural developer conference that runs Wednesday and Thursday in San Francisco.

Kenneth Corbin is an associate editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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