Twitter Announces Business Model, Promoted Tweets

By Kyle Austin

Image Courtesy of Ad Age

Twitter is finally taking the first step to monetize its service on Tuesday by launching an advertising platform called “Promoted Tweets.”

Co-founder Biz Stone officially announced the move this morning on the Twitter blog, citing that the company will start running “Promoted Tweets” from companies such as Starbucks, Best Buy, Sony Pictures, Bravo, Virgin America and Red Bull at the top of Twitter.com search results. So as an advertiser, what does your money on “Promoted Tweets” buy you? Similar to Google’s ad sense, it will buy you the top search result for certain keywords that you’ve bought. But that seems to be about it. Other than clearly stating that the tweet is sponsored, it will take on the same characteristics of a typical tweet on the micro-blogging service.

According to @Biz, “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.”

Similar to Facebook, Twitter also seems to be taking measures to ensure that the “advertisements” do not take away from the Twitter ecosystem. Therefore, “Promoted Tweets must meet a higher bar—they must resonate with users.” If users don’t interact with a “Promoted Tweet” (by replying to it, favoriting it, re-tweeting it, etc) the “Promoted Tweet” will disappear.

It will be interesting to see just how useful the tweets are for advertisers and brands, who associate much of their success on the Twitter service to engaging with fans one-on-one. Will a simple text based search ad on the top of a Twitter.com search result provide additional value?

Twitter COO Dick Costolo will address the new offering in further  detail today at the AdAge Digital conference.

5 comments April 13th, 2010