Twitter’s ad model begins not with a bang, but a predictable tweet

Twitter’s revealed details of its advertising model tonight. They’re starting with a variation on search ads: tweets that advertisers have paid for will show up at the top of search results when Twitter users look for special keywords companies have bought.
It’s an idea observers of the company have suggested for quite a long time, although it’s still unclear whether those types of queries will monetize nearly as well as conventional search. Sensitive to keeping the user experience free of annoying marketing messages, Twitter will boot sponsored tweets if they’re aren’t receiving lots of replies, clicks or retweets. If this happens, advertisers won’t have to pay for the tweets.
Later on, the company will show these so-called “Promoted Tweets” in a user’s stream if they might be deemed algorithmically relevant to them. So if you happen to tweet a lot about cooking, food companies might target you with sponsored tweets. Once the company figures out what works well on Twitter.com, they’ll open the advertising platform to other developers and share revenue with them.
Dick Costolo, Twitter’s chief operating officer told The New York Times, “The idea behind Promoted Tweets is that we want to enhance the communications that companies are already having with customers on Twitter.”

Search ads and in-stream advertising should come as no surprise. After Twitter bought search engine Summize in 2008, search advertising was a fairly obvious approach to monetization. That said, the company has a bit of an unusual take on it. The search ads will appear at the top of results, not on the side like with Google results and Twitter is using a system they call “resonance” to pull out ineffective advertising.
The new advertising system will make up one of Twitter’s three revenue streams. The two others include data fees, which the company started earning last year when it sold access to its full unfiltered feed to Google and Microsoft, and paid commercial accounts, which have yet to launch.
Tags: advertising
Companies: Twitter
People: Dick Costolo