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April 13, 2010

Should you buy Twitter ads? Yes. (And no, this won't ruin twitter)

by Josh Bernoff

The New York Times and Advertising Age report that Twitter will be adding advertising tweets to searches.

First, to all the Twitter lovers out there: this is NOT the first sign of the apocalypse. Of all the places Twitter could includes ads, this is the least obtrusive and the most relevant. People will not desert Twitter for this. It's inevitable -- technology services need revenue.

Not only that, I expect it to be successful. Searches on trending topics are an inevitable place for mass market ads. But searches on other hashtags are also likely to generate interest from advertisers, and relevant ad tweets make sense here. If a t-shirt company puts ad tweets into searches on "Lady Gaga" and "#LadyGaga", good for them. As with Google, these ads will fit nicely into the organic searches.

Should you, the interactive marketer, buy these ads. Yes! Twitter participants are highly influential. At first, the ads will be cheap. You want to learn this product as soon as possible. Recommendation: keep the promotion mild at first, to avoid a backlash. Just go for awareness, and include a link for people who want to learn more.

Twitter could screw this up by allowing too many ads, but they won't. They will keep the load light and the cost as high as the market will bear. Following Google's lead, I expect they will implement auctions.

This is not the end of the ads, either. But Twitter can take its time figuring out how, if at all, to put ads in regular tweetstreams. This has far more potential for backlash.

If you think your Twitter client (like Echofon or Tweetdeck) will screen out the ads, think again. Expect Twitter to require users of its API to include promotional tweets.

At the end of last year, we predicted that in 2010 Twitter would either develop a $100 million annual revenue stream, or get bought. Based on this announcement, look for the $100 million revenue stream.

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Comments

John Whitcomb

Thanks Josh for providing us with this information. I am not sure if this will not cause some sort of backlash from Twitter users but copying the model of digg and letting users vote on ads is a good strategy because there is still control to the end user.

Amber Benson

Thanks for being the voice of reason among all the Chicken Little Twitterers. Is search no less useful because of the sponsored links? If I'm looking for brand information, I consider it good customer service that the brand understood my need and paid to help me meet it as efficiently as possible. And for that, I will reward you by making you pay for the honor of my click.

Josh Bernoff

Amber: @chickenlittle has 61 followers and has protected her tweets ;-)

Amber Benson

You know what I meant. :) "Here come the brands, the sky is falling". I'd argue that when Facebook created a way for brand marketers to participate on the platform in a transparent way, they added value that, in turn, attracted consumers to the platform. Same could happen for Twitter.

Craig

A few contrarian views Josh- Richsblog points out that they could have added a few customer service or PRO versions of the client to make it more useful to corporate.
http://www.richsblog.com/files/8ce70a0be8fc6e62517e84a8d57aefdb-476.html

Sure it will become what it is meant to be - a useful channel.

Club Penguin Cheats

If Twitter has waited this long, they won't screw it up. They are too conservative. The real challenge will be allowing users to post their own ads! That's what I want to see. Let us monetize OUR traffic!

Jim Deitzel

Once again a nice well written post. I do question why they would try to build their own ad platform when there are some really good ones already out there.

KPO

This is just an effort on Twitter's part to increase its revenue. It, after all, is a business. Business are put up in order to rake in profits. I think the flow of things is still natural.

zuls

I still cannot understand why some people cannot accept that twitter need to monetize..
They love to use twitter which is free, but does not agree with the ads..

retro Jordans

I am not sure if this will not cause some sort of backlash from Twitter users but copying the model of digg and letting users vote on ads is a good strategy because there is still control to the end user.

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