Twitter Self-Serve Ad Platform Is Coming


ADOTAS – Promoted Tweets, the first Twitter ad product, were only rolled out last May, but it feels like so much more time has passed. That’s probably because the microblogger’s valuation keeps rocketing skyword — thanks to massive investments, stunningly high acquisition offers and a hyperactive secondary market — at a rate that revenue intake hasn’t kept up with.

It’s not that Twitter’s revenue potential doesn’t match the service’s impressive functionality; Twitter simply has been carefully plotting how to best monetize its real-time stream of 185 million daily tweets. Like Facebook, the microblogger has eschewed standard online ad units because of their low engagement rates and general user dislike. And developing new types of advertising units that are organic to its growing platform is not something Twitter feels should be done with haste.

“Revenue has become ‘the meme’ for Twitter,” commented Matt Graves, director of communications. “We’re building a long-term business — we’re not going to rush it.”

With the recent search revamp and the acquisition of Adgrok (maker of in-browser SEM management software), I saw the seeds of a new ad product, but actually they’re signals of a massive expansion of the current ad offerings via a self-serve ad platform that will appear in the second half of 2011.

The just-added relevance filter for search — previously searches were only organized chronologically — is a product of Twitter’s mission shift to “to instantly connect people to information,” Graves said.

In addition, images from Twitter’s new Photobucket-powered image-sharing service are featured in the righthand media pane (which itself was a major feature of last-year’s redesign). Finally, the long-promised link shortener has finally arrived, combining safety (Twitter keeps in the top of the URL so you know you’re headed to YouTube and CNN and not Frank’s Malware Shack) and convenience.

But Twitter’s next big thing is the self-serve ad platform, which has the potential to massively scale the number (which President of Revenue Adam Bain recently marked at 600, 80% repeats) as well as type of advertisers on Twitter. Currently advertising services remain very high-touch, with direct sales teams handling much of the grunt work — the main reason is that Twitter wants to figure out the right way to advertise on its network just as badly as the advertisers.

After a year of experimenting, they’ve learned a lot, and Graves said that the microblogger has developed systems that cede campaign control to advertisers. In addition, Twitter has built five analytics dashboards for advertisers for optimization purposes as well as insights into follower interests.

A self-serve ad platform would definitely attract small and local advertisers, and Graves said Twitter’s ad team has been reaching out to the segment through initiatives such as the “Beta Partnership Plan,”  which requires a (negotiable) $15,000 minimum spend over three months. Despite an article with critical anecdotes about Twitter’s effectiveness for SMBs, Graves claimed that SMB experience with Twitter ad products had been predominately positive (he also noted nondisclosure agreements Twitter makes with its advertisers).

“The big thing for SMBs is that inventory is lower than people like,” Graves said. “But we’re still in the extremely early days.”

It’s not hard to imagine inventory increasing with more searches — currently Promoted Tweets only appear in searches; Twitter will eventually roll them out into the timeline and mobile streams — as tweeters embrace the revamped search tool.

Just like SumbleUpon’s Paid Discovery or Facebook’s Sponsored Stories, Promoted Tweets are organic in nature because they would have shown up in a user’s search anyway. Promoted Tweets are just displayed higher because someone put some cash behind them.

And just like those other advertising products, getting the creative right is an art — fortunately Twitter’s resonance algorithm pretty much kicks to the curb nonperforming creative. (Be warned: your Google tricks will not work on Twitter, SEM Jedi.) While Promoted Tweets average 3% to 5% engagement rates, Graves mentioned that the top 50 of these tweets boasted engagement between 21% and 52%.

Sounds like all Promoted Tweets really need is some scale…


In addition, there’s a snowball effect when combined with other ad products — Twitter discovered that the engagement average bumped up to 7% to 10% when Promoted Tweets were coupled with Promoted Trends.

As for AdGrok, it was a case of acquihire (even though cofounder and CEO Antonio Garcia-Martinez decided to take a position at Facebook instead) as the GrokBar in-browser SEM tool is headed to the graveyard — but no doubt we will see similar technology appear for Twitter ad products. The rest of the AdGrok team (including cofounders Argyris Zymnis and Matthew McEachen) has taken their places in the revenue engineering division.

Twitter is still growing at a clip, Graves commented — even the Pew Research Center recently upgraded its early 2011 estimate of 8% of U.S. internet users being on Twitter to 13%. Graves said internal analytics put that number higher.

Alas, there is the zombie population — bot accounts filling the Twitter stream with spam linkage. Twitter’s Trust and Safety division is cleaning up the zombie mess (shoot the brain!) but there are nuances as some automated accounts are very useful. Some accounts are half bot and half human-operated, leaving Twitter to discern “What’s bot and what’s not?” Graves said.
Just another fun task for your ever-developing social platform….




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