Twitter’s new pay-per-click advertising model should finally put the much-hyped company on the path to profit.
Social networking giant Twitter has finally unveiled its long-awaited advertising platform, with several companies taking part in the new pay-per-click “promoted tweet” program that allows them to promote deals and offers through the site.
The development will finally create a solid revenue stream for the company, which only has generated small amount of revenue through search deals with Microsoft and Google.
The Promoted Tweet platform was announced by the company yesterday, but not before the New York Times leaked the story detailing how the program works and which companies would be involved.
It works like this. Advertisements appear in standard Twitter search results based on the keywords used to search. The promoted tweet looks like a normal tweet but appears at the top of the page and is marked as paid ad.
For instance, a user searching for “Starbucks” on the site may come across a Promoted Tweet from the company offering a two-for-one deal, or a discount.
The promoted tweets will be clearly marked, with one shown at a time, and will also show up as a regular tweet in the advertiser’s own feed.
But Twitter also says they aren’t guaranteed to last – if any Promoted Tweet isn’t gaining clicks or replies, it’ll be pulled with no cost to the advertiser.
The first companies to take part in the program include Starbucks, Red Bull, Best Buy, Bravo, Virgin America and Sony Pictures, but Twitter chief executive Biz Stone said in a blog post the program will be expanded eventually. He also said the company is keen to have the program fit in well with the site’s overall tone.
“Promoted Tweets will be clearly labelled as “promoted” when an advertiser is paying, but in every other respect they will first exist as regular Tweets and will be organically sent to the timelines of those who follow a brand.”
“Promoted Tweets will also retain all the functionality of a regular Tweet including replying, Retweeting, and favoriting. Only one Promoted Tweet will be displayed on the search results page.”
Stone also said Promoted Tweets will eventually be included in third-party Twitter clients, with the advertisements themselves expected to break out of the search function eventually. He also noted the differences in Twitter’s search platform compared to other sites, saying they would be an “organic part of Twitter”, and that they wouldn’t be visually imposing.
“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.”
“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.”
Chief operating officer Dick Costolo also told All Things Digital the company will be closely watching to ensure advertising partners do not breach the terms of the platform.
“So for example, if someone creates an ad that looks like a Tweet in the timeline, but isn’t a Tweet – such that if you click on the retweet button, you go to a landing page, instead of retweeting the Tweet – that’s something [that] causes user confusion, it harms the overall value of the platform, and we’re going to prohibit that.”
“What I’m absolutely fine with… is a client that’s got a banner ad at the top, that’s segregated from the timeline. And that banner ad is sold by a third party, and those people decide not to participate in the Promoted Tweets platform. I don’t have a problem with that and we encourage that.”
Stone also noted the company’s slow introduction to monetisation in his blog post, saying the company instead has opted for “a slow and thoughtful approach…which puts users first, amplifies existing value and generates profit”.
It is not yet known when Twitter first hopes to turn a profit, or how much revenue it expects to gain from the new platform.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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