Twitter bets on search ads for monetization

Ronny Kerr · April 13, 2010 · Short URL: https://vator.tv/n/ef8

Promoted Tweets, paid sponsored tweets to show up in search results, user streams

Twitter on Tuesday revealed its first-ever plan for monetizing microblogging, a service called Promoted Tweets that delivers paid ads in the form of tweets at the top of Twitter.com search results pages.

Aiming for a model that "puts users first, amplifies existing value, and generates profit," Twitter will display these advertising tweets at the top of a search page for particular queries. One might imagine that a search for "laptops" might trigger a Best Buy tweet to appear, promoting a laptop sale at the retailer's Web site. When the advertiser pays for a tweet to be displayed, it will be clearly marked as "promoted."

Twitter wants to ensure its users, however, that this new wave of advertising tweets won't completely sweep away relevance on the social networking site. After all, the main attraction to Twitter is its ability to provide real-time information about the world.

Users already subscribed to a brand will receive Promoted Tweets just as they would any other tweet from the brand. Additionally, Promoted Tweets can, like ordinary tweets, be replied to, retweeted, and favorited. In fact, Twitter is relying on usage of these functions to demonstrate whether a Promoted Tweet "resonates" with users or not.

"There is one big difference between a Promoted Tweet and a regular Tweet," further explains Biz Stone, co-founder of Twitter. "Promoted Tweets must meet a higher bar—they must resonate with users. That means 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."

Advertising partners already on board include Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks, and Virgin America, with more likely to be added soon.

Twitter COO Dick Costolo will be discussing the new plan today at the AdAge Digital conference and tomorrow CEO Evan Williams will join Costolo in a discussion of the new advertising tool at Chirp, the official Twitter developer conference.

Ronny Kerr

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Twitter

Startup/Business

Joined Vator on April 9, 2008

What is Twitter?

Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.

Where did the idea for Twitter come from?

Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.

How is Twitter built?

Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.

We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.

How do you make money from Twitter?

There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.

In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.

At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.

Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.

What's next for Twitter?

We continue to focus on building a product that provides value for users.

We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.