Promoted Tweets: Let the Facts do the Talking First

by Caroline Dangson 16 Apr 2010 Blog Post

This week Twitter unveiled a new advertising platform called Promoted Tweets during its Chirp conference.  Twitter developed Promoted Tweets with the vision of a new hybrid model of paid and earned media where advertisers will pay for prime real estate on Twitter based on how well a tweet resonates with viewers.

How it works

  • Company pays for keywords and then chooses the existing tweets from its account (related accounts included) that it wants to promote
  • Promoted tweet follows the format of a regular tweet with “Retweet” and “Reply” functionality
  • Company can only promote its own tweets (due to FTC regulations) Clarification added: Company cannot use follower tweets as Promoted Tweets and I assume this is because of recent FTC guidelines

Note:  Twitter has not confirmed Promoted Tweets will follow a keyword auction model like that of Google, but there are reports that keywords on Twitter’s search engine will be opened to competitive bidding by advertisers.

Pricing model

  1. Impression-based model (CPM rate undisclosed but I predict it will be less than $5 per 1,000 impressions)
  2. Evolving to a ROI model (cost per interaction)

Twitter refers to a “resonance score” (as-yet-to-be-finalized metric) that will aim to measure the influence of a tweet based on replies, retweets, views, and click-throughs.  COO Dick Costello says once the program is past its experimental phase, cost will be worked out and the tweets will be priced on a return-on-investment basis.  Resonance score will help prioritize which promoted tweet will appear in search results while ones that don’t resonate will disappear with no cost incurred to advertisers.

Phased Roll Out

Phase 1: Promoted tweets will appear only on Twitter search results pages.

Phase 2: Promoted tweets will be available to developers and Twitter clients via the companies APIs.  Twitter will split revenue 50:50 with developers.

Phase 3: Promoted tweets will begin to appear in users’ customized timelines.

(Timeline for Phase 2 and 3 not available)

Interesting things to come

  • Geo-location features to be added so advertisers can target tweets based on location (great for franchises with local branches).
  • Real-time social interest graph of tweeters will place promoted tweets within Twitter stream (probably a mix of contextual and semantic technology to match tweeter’s expressed interests in tweets with that of brands paying for related keywords).

Limited initial testing group

  • Twitter approached consumer brands such as Best Buy, Virgin America, Starbucks, Red Bull, and Sony Pictures to be the first to pilot Promoted Tweets platform.
  • Plans to roll out to larger audience later this year.

Inquiry form available here

Other Twitter ad networks

General Twitter stats to consider

*Note: 600 million figure includes queries from widgets and clients. According to Ev Williams, Seesmic and TweetDeck generate noticeable amounts of searches.

My thoughts

People do not use Twitter to perform keyword searches as they do Google. The lack of this type of searching behavior combined with the fact that most of the searches are not happening on leads me to support arguments that advertisers seeking business value from Promoted Tweets (and who do not enjoy the brand affinity of Starbucks and Virgin America) should wait for more details before investing money in this new experimental ad platform. Twitter’s Promoted Tweet platform will not have the same returns as Google paid search because it has not reached the same maturity. As my colleague Peter Kim blogs, companies debating whether to pay to experiment with Promoted Tweets should first ask themselves if they have already maximized existing paid search investments with more proven platforms. If you are debating whether or not to use the Promoted Tweets service, I say it is better to wait until we understand how resonance works based on companies who are piloting today. I enjoyed reading the Wall Street Journal blog entry from Mahesh Murthy who explains how advertising agencies will need time to adjust to the 24/7 nature of earned media.

I also believe there are other compelling reasons for waiting, including:

  • History of backlash for advertising in new mediums
  • Most Twitter innovations come from third party developers after the APIs are released
  • Twitter has not solidified resonance score and real-time analytics dashboard is not yet available
  • Promoted Tweets will eventually be able tap into ‘social interest graph’ data which will make promoted tweets more relevant to tweeter and therefore have greater potential to increase click-through rates

I cannot deny that there are benefits for advertisers eager to use the Promoted Tweets service on day one, including:

  • Publicity for experimenting with platform
  • Less competition for keywords
  • Promoted Tweets platform serves as metafilter by helping a company maintain its voice at the top of the Twitter stream (not a fleeting tweet that is lost after a few seconds).

Of course, based on the initial negative reaction to advertising on Twitter, this initiative could generate backlash with your brand front and center. You’ll want to be a brand with high affinity.

Special thanks to my colleagues Peter Kim, Kate Niederhoffer, Tom Cummings, Brian Kotlyar and Cynthia Pflaum for contributing to this post. We welcome your thoughts and anything you might have to add as we all learn more about this new Twitter offering.

  • Nick Trendov

    Synchronization may be a better way to value Tweets.

    We are working on a different way to let someone with a problem to find an answer or someone who is looking for an answer to find out if they understand their problem.

    Shifting the focus to helping Twits (posters) find rather than tell them the answer is easier on everyone and gets good buzz.