Twitter recently announced its long awaited monetization strategy in the form of Promoted Tweets. Many felt it was underwhelming as business pundits had hoped for the monetization plan to be more unique and interesting. However, I think the plan is a winner and I think it will be a huge success for Twitter.
Promoted Tweets will be organic to the platform, in that they will be in the format of Tweets. This will help with the user experience as users will be able to still search Twitter results and see only Tweets. Granted, an ad could be there in the form of Promoted Tweet, but the ad will flow easily and simply with the site. This will also help the advertisers, because users have gotten used to interacting with Tweets via clicks, replies, and retweets. So, with the ads in the organic form of Tweets, it will be easy for the user to connect with the advertiser.
The Promoted Tweets will be shared with many of Twitter’s development partners. Twitter will share the net revenue generated with the developer on a 50/50 split. This will help developers, such as my site, Sency, to monetise traffic via the Promoted Tweets. This will also help Twitter to extend its ad reach well beyond Twitter.com. In fact, Twitter developers who use its API account for 75% of Twitter’s traffic. And since Twitter already has the technical relationship in place with each of its developers, it will be simple for developers to turn on the ads, which will, in effect, grow Twitter’s revenue further.
Twitter has said it will track the success of each ad that shows up in its search results based on how well it resonates. It will calculate a resonance score based on several factors, including clicks, amount of retweets and replies, as well as views after the ad was retweeted.
Ads that resonate well will continue to be displayed both within Twitter.com search results and its partners’ search results for the respective keywords where the ad is performing well. However, ads that don’t resonate well with users will be removed from Twitter. This process will help to ensure that the ads help the user experience at Twitter as opposed to hurting it. This will also entice more developers to turn on the ads, as developers will see that the ads don’t detract from their users’ experience.
Plus, Twitter has said it will eventually move the ads into users’ Tweet stream for even further distribution. Provided that the ads are highly relevant and useful, users are more likely to act as opposed to complain in regards to the Promoted Tweets.
An example of a Promoted Tweet that Twitter spoke about at the recent Chirp conference was about iPad batteries. A lot of users have been tweeting to complain about the battery life of the iPad. As a result, iPad battery made its way into Twitter’s trending topics. This, in turn, meant that more and more users were searching Twitter for iPad Batteries. So, with a Promoted Tweet, Best Buy could have said “Are you having a problem charging your iPad? Click here.” So, people whom are on Twitter discussing and searching for an iPad battery, could have utilized the call to action to act at Best Buy.
If there is a Promoted Tweet for a keyword, it will be listed first in the search results, which will ensure that each user is able to see the Promoted Tweet. At the same time, Twitter will only allow 1 Promoted Tweet to show up on a page, which will help to keep the Twitter user friendly and legitimate. And, by only keeping Promoted Tweets live which are deemed to resonate well, the Promoted Tweets could actually end up making Twitter search results and the users Tweet stream more helpful.
With 105 million registered users and 300,000 new users signing up each day, it is clear that Twitter has the traffic. Then, when you add in all of the traffic that hits Twitter’s developer network, Twitter is able to extend its reach even further. When you combine all of this traffic with a monetization plan that will have ROI for advertisers, while improving the user experience of Twitter, then you have a clear winner.
It will take time for this plan to get implemented and grow, but 18 months from now, Promoted Tweets will be an enormous revenue line in the new social web economy.
Evan Britton founded Sency in 2009. The goal of Sency is to bring real-time content, links, and tools to Internet users in an organised and simple fashion.
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