For most of us in the social media space, the big news coming out Cannes last month had nothing to do with awards or lavish cocktail parties. Rather, the biggest story was that Twitter plans to introduce advertising directly into user Tweet streams, possibly as soon as two months from now. Unsurprisingly, users voiced concern over being bombarded with ads in their streams. The consensus was that Twitter, still smarting from a poorly received mobile ad bar, needs to proceed very carefully to avoid any sort of backlash with this rollout.
But Twitter needs to go full-steam ahead with the rollout, regardless of user opinion. In-stream advertising is a smart move for Twitter, and it’s going to be hugely beneficial for Twitter users as well. But first Twitter needs to build in targeted advertising that appeals to consumers, while leveraging the existing application ecosystem to deliver these ads.
The promoted tweets program, as it exists right now, is great at driving brand engagement. In-stream advertising complements this program and drives real marketing metrics, such as clicks, re-tweets, and in-page tracking once consumers click through. But the biggest opportunity lies in targeted advertising.
Look at Facebook, the leading social platform right now. The average click-through rate for untargeted, general population display ads on Facebook is 0.02 percent. But when ads are targeted to consumer interests, the CTR leaps to 0.15 percent, according to studies by BLiNQ Media. The same goes for Twitter. Our own independent studies of millions of in-stream ad impressions show that targeted ads can drive CTR as high as 0.5 percent.
Twitter has two distinct advantages over Facebook when it comes to social advertising. The first is the nature of targeting. Facebook ad targeting is currently limited to consumer interests and their friends’ interests. A lot of the data on Facebook is still private, and Facebook controls access to it. On Twitter, much of the information – including who consumers follow and the content of their tweets – is public. This type of data lets advertisers deliver messages that seamlessly fit into the consumer’s stream.
If a consumer follows Entertainment Weekly, HBO, and Variety, then an ad promoting the premiere of a new TV drama fits seamlessly into that content. And it doesn’t have to be just a line of text with a hashtag. Twitter ads can link to landing pages with streaming video and more information. After all, most social media messaging links to outside content.
That sharing component is the second big differentiation piece. According to reports, in-stream Twitter units will look like normal tweets, with the same functionality. If ads are targeted to the point where they enhance the consumer Twitter experience, the chances are very high that users will re-tweet and share the ad units with their own friends.
While there haven’t been any details about Twitter’s pricing, it’s very obvious that buying targeted ads will also give advertisers bonus earned media when their ads appeal to the audience. We’ve seen targeted ads boost earned media as much as 25 percent in some campaigns, with up to 750,000 re-tweets. Sure, advertisers can put links to Tweet or share on Facebook within a banner ad, but Twitter ads put that ad in context that leads to sharing.
The other component of Twitter’s success lies in the vast application ecosystem, which increases the targeting opportunities. Consider TweetNews, a niche application that curates a feed of news stories. By working with the app, advertisers can deliver ads contextually relevant to the content, whether it’s a discount subscription to The New York Times or an ad for a magazine iPad app. Consumers checking Twitter through iPhone apps are likely to respond well to ads for Apple products. In fact, Apple itself already recognizes the potential for Twitter advertising and is baking Twitter functionality into every application on the next iteration of iPhone software.
Twitter’s new move is really just the tip of the iceberg. The immediate scale is the most visible aspect, but if Twitter really wants to turn into an ad platform on par with Facebook, it needs to harness user data to target advertising, and it needs to use the full developer ecosystem to deliver contextually relevant advertising. Consumers use Twitter to share content, and we already know they will share advertising. It just has to be the right ad.
For most of us in the social media space, the big news coming out Cannes last month had nothing to do with awards or lavish cocktail parties. Rather, the biggest story was that Twitter plans to introduce advertising directly into user Tweet streams, possibly as soon as two months from now. Unsurprisingly, users voiced concern over being bombarded with ads in their streams. The consensus was that Twitter, still smarting from a poorly received mobile ad bar, needs to proceed very carefully to avoid any sort of backlash with this rollout.