Web & communication software

Twitter's Tries to Swim Up the Revenue Stream

Twitter has been coughing up a hairball this morning - down a few minutes ago; back up again - which might lead one to believe that the site's users are all abuzz about Biz Stone's new blog post detailing his company's forever-in-the-making revenue model.

There are certainly plenty of aspects to discuss, most interesting of which is the notion that Twitter users supposedly will get a say in whether a particular advertiser's particular message is allowed to stay or gets kicked off the island.

From an IDG News Service story on our Web site:

Twitter on Tuesday introduced a new service called Promoted Tweets, which will let companies send ads in the form of ordinary messages, according to a blog posted by co-founder Biz Stone.

The introduction is an important step for the company, since it represents the first step towards turning the microblogging service into a money-making venture.

Users will start seeing paid messages, which will be labeled "promoted," at the top of some Twitter.com search results pages, according to Stone. Initially, up to 10 percent of users will see the promoted messages. Twitter will work with Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks, and Virgin America, to roll out the first ads, he said.

At first blush, the name "Promoted Tweets" seems intentionally confusing. Promoted makes me think first of promotional, as in advertising ... as in so what's new?

However, if I understand Stone's explanation - a big if - it seems as though Twitter intends to make advertisers earn their keep if they want a place in your regular stream of tweets.

From Stone's post:

Since all Promoted Tweets are organic Tweets, there is not a single "ad" in our Promoted Tweets platform that isn't already an organic part of Twitter. This is distinct from both traditional search advertising and more recent social advertising. Promoted Tweets will also be timely. Like any other Tweet, the connection between you and a Promoted Tweet in real-time provides a powerful means of delivering information relevant to you at the moment.

That's gobbledygook; the next part might actually be interesting.

There is one big difference between a Promoted Tweet and a regular Tweet. 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.

That's what I meant in the headline by "audition advertising." So if a Tweet from, say, Starbucks talks about the superiority of its coffee blends - and no one cares - it's not going to be a Promoted Tweet; if Starbucks Tweets about free lattes for the next two hours in these six cities, well, the pass-along effect would earn the message its lofty status as a Promoted Tweet, and would presumably also generate income for Twitter.

Could such a threshold make advertising more tolerable for consumers? Sure, if the thesholds are meaningful and the system works.

But the true test will be seen in how high Twitter sets the bar. My guess is that -- eventually -- it will be set at a height that lets the company make a bunch of money ... and no higher.

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