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Promoted Tweets – How Twitter will make money

Posted on 13. Apr, 2010 by Nikos in Advertising, Social Media, Twitter

For the last four years, Twitter makes no money. Today (Tuesday 13, 2010), Twitter announces its Business Model! Promoted tweets are coming in your Twitter feeds even if you use a Twitter client (third party application). Twitter can analyze your tweets, keywords, searches, followers and lists and serve you targeted ads! 

Promoted tweets also have the potential to scale revenue quickly for the company, backed by $160 million in funding from a coterie of elite VC firms including Union Square Ventures, Institutional Ventures Partners, Benchmark Capital and Spark Capital.

The promoted tweet is one of three streams of revenue Twitter will have available, including a data fee from search engines indexing Twitter in real time, such as Google, Yahoo and Bing, and the coming “professional accounts.” Professional accounts will include the ability to have multiple users on one account — much like some of the clients such as CoTweet do today — plus a dashboard that shows what’s happening with a brand on Twitter and integration with promoted tweets.

(AdAge.com)

This is what @biz Stone wrote on Twitter’s Official Blog just an hour ago:

Q: What are you launching? What are Promoted Tweets?
A: We are launching the first phase of our Promoted Tweets platform with a handful of innovative advertising partners that include Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks, and Virgin America — with more to come. Promoted Tweets are ordinary Tweets that businesses and organizations want to highlight to a wider group of users.

Q. What will users see?
A. You will start to see Tweets promoted by our partner advertisers called out at the top of some Twitter.com search results pages. We strongly believe that Promoted Tweets should be useful to you. We’ll attempt to measure whether the Tweets resonate with users and stop showing Promoted Tweets that don’t resonate. Promoted Tweets will be clearly labeled 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.

Q. You said, “first phase”; what else do you have planned?
A. Before we roll out more phases, we want to get a better understanding of the resonance of Promoted Tweets, user experience and advertiser value. Once this is done, we plan to allow Promoted Tweets to be shown by Twitter clients and other ecosystem partners and to expand beyond Twitter search, including displaying relevant Promoted Tweets in your timelines in a way that is useful to you.

Q: Is this what you said we would love and would be awesome?
A: While we are excited about the platform in general, there are several specific aspects of the launch that we are delighted to highlight. Since all Promoted Tweets are organic Tweets, there is not a single “ad” in our Promoted Tweets platform that isn’t already an organic part of Twitter. This is distinct from both traditional search advertising and more recent social advertising. Promoted Tweets will also be timely. 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.

There is one big difference between a Promoted Tweet and a regular Tweet. 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.

Q. Anything else to say?
A. This is a new thing and we expect to iterate to make it better. We’re really excited to get it out to you and look forward to getting your feedback.