Posted September 27, 2010 8:32 am by with 1 comment

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Twitter is moving from the social media collector of huge numbers of accounts and unique site visits etc to the thing everyone in the business world is waiting for: a real advertising vehicle.

The first foray into this area has been their promoted tweets and trends, which were introduced in April and June of this year respectively. With a few months of data behind them and the announcement that these special items will be showing up in third party apps like TweetDeck and HootSuite, things are starting to gain steam for the Twitter revenue express.

AdAge reports

Even after six months, campaigns with nearly 40 different marketers and repeat customers such as Ford, Virgin America and Verizon, Twitter still views its ads as experimental.

But that’s about to change. Twitter plans in November to take its ads beyond and extend them to the rest of the user base through apps such as TweetDeck and Hootsuite.

For all the campaigns so far, from Coca-Cola to AT&T and all the major film studios, the interaction rate with a promoted tweet — defined as a retweet, a new follower or a click-through — is 5%, significantly higher than a standard web display ad, where click-throughs are well below 1%.

Of those three measurements the click through is the biggie since the others can simply be the result of spam activities or something other than a real prospect for that advertiser. I would love to see the breakdown of that 5% and see how that number holds up against the display ad number.

Twitter is feeling its oats about this offering as evidenced by the following quote

“We now feel pretty confident we are cracking the code on a new kind of advertising, one that is more engaging … but also more participatory,” said Twitter Chief Operating Officer Dick Costolo.

The question going forward is whether Twitter’s two existing ad units — promoted trends and tweets — can scale, and whether interest in Twitter remains concentrated among big brands that see it as a nifty, albeit small, promotional medium, or if, like Google search, it becomes a must-buy for all marketers.

Moving over to the third party app world where many users of Twitter sit unaffected by these ads currently is something that is getting the attention of current advertisers who are in search of scale for their efforts. That scale combined with the conversion rates have some bigger players very excited.

Coke, which has run more than 50 campaigns on Twitter since June, says its campaigns have had much higher interaction rates than Mr. Costolo is reporting.

Since June, Coke’s follower count has grown from about 50,000 to 122,000. Nice, but hardly the kind of scale Coke needs. “My job is not to play around with tens of thousands of people; it’s to play around with millions of people,” said Michael Donnelly, Coke director-worldwide interactive marketing.

If you are an SMB or even just a smaller business than Coke in general (which is most of us) it’s funny to see the virtual dismissal of tens of thousands of people isn’t it? That’s why Twitter is attractive to these large players because of the numbers they can boast like 160 million accounts and 370,000 new sign ups per day.

Not bad. So for all you enjoying the ad free Twitter life, enjoy it while you can. There isn’t much time left and it appears that once that train leaves the station it may not be coming back (unless of course there will be a ‘no-ads’ subscription option. Would you pay for that?)

  • Hey Frank — re: more in-reach pricing — Advertisers can run campaigns with our Influencers (experts, celebrities, athletes, popular personalities, etc.) on the Twitter platform starting at $25K.

    And – for our self-service network – there is no minimum spend.

    In addition, Twitter app developers (as well as publishing site developers) who want to start generating revenue now can work with for Apps & Sites.

    It’s a simple stream API that enables apps & sites to display contextually-targeted in-stream ads to their users. See more here:

    The team