Twitter has made its move towards monetization and there are big opportunities for performance advertisers as a result..
In the last 48 hours they have announced a new performance advertising platform, new targeting capabilities via geo-location, and that Twitter now has 105 million registered users with 75% of traffic coming from outside Twitter.com.
Let’s explore what these announcements mean to the performance advertising sector. The biggest deal is Twitter’s new ad delivery system, called Promoted Tweets.
In what seems like an obvious approach Twitter has come up with the idea of advertisers buying keywords which then lead to an ad appearing at the top of a relevant Twitter search results page. Where have we seen that model before, I wonder?
There’s even an equivalent to Quality Score. Promoted Tweets will be rated by Twitter on the basis of “resonance.” This is a new measure of “multiple axes of engagement,” an aggregation of nine different factors including things like Retweets, replies, hashtags, shortened links and so on. If an ad’s resonance isn’t high enough, it won’t be displayed and the advertiser won’t be charged.
Resonance will be part of an advertiser’s account history, meaning that Twitter will have the ability to prioritize Promoted Tweets by resonance score and, perhaps, charge advertisers more or less depending on their resonance history.
Promoted Tweets will only be on Twitter SERPs to begin with but will shortly also be pushed into the Twitter streams of users identified by relevant geographic and demographic data, or by the “real time interest graph.” This is going to allow advertisers to explore all kinds of new targeting strategies as well as being able to tie campaigns in to real time events.
Twitter has also announced that they have designed their new ad platform with their ecosystem in mind. This means that apps makers and the like will be able to create opportunities to push Promoted Tweets to relevant users and enjoy a 50/50 rev share.
Unlike Google when they launched AdWords into the world with not much fanfare and hardly any big-brand advertisers, Twitter is heavily promoting the fact that Best Buy, Virgin America, Sony Pictures and Starbucks are already signed up, so it’s clearly going to be a big deal for major brands.
So what are the takeaways for performance advertisers? Here are our Top 5:
- Twitter is all about what’s happening right now, so advertisers able to respond quickly and create or change campaigns on the fly will have a new competitive advantage.
- Twitter’s resonance algorithm has not been revealed and they are indicating it won’t be any time soon. Expert Twitter marketers will emerge, much like expert search engine marketers have, with the knowledge of how best to game the algorithm. Given that low-resonance Promoted Tweets won’t get displayed at all, figuring out how to maximize resonance is going to be key to buying Twitter traffic.
- Twitter has also announced that they are implementing places as part of their geo-location feature set. This means they’re moving into Foursquare and GoWalla territory, and that marketers should already be thinking about how to use Promoted Tweets in local and mobile marketing campaigns.
- Ads are going to priced on a CPM basis at first. This is going to offer all kinds of arbitrage opportunities that leverage Twitter’s user data.
- Twitter has stated that after the advertising concept has been proven, they will move to a more ROI-based pricing model, so Promoted Tweets will essentially become an interesting hybrid somewhere in between display ads and PPC. The ability to integrate campaign metrics across multiple channels in real time is about to become even more important than it already is.