The Multi-Billion Dollar Question: Will Users Click on Twitter Ads?

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It’s official: Twitter’s advertising platform launches in the next 24 hours. The much-anticipated Twitter business model will begin appearing in search results in the afternoon, with ads on Twitter.com and within third-party apps to follow.

The launch of the new ad platform, known as Promoted Tweets, isn’t a surprise — like any other company, Twitter has to make money from somewhere, plus the existence of Twitter’s ad platform has been known for some time.

Now that the ad platform has been revealed and Twitter is focused on making money, the multi-billion dollar question is this: will users click Twitter ads? The answer to this question will decide not only the fate of Twitter as a company, but change the direction of all social media.

Twitter Resonance: The New Digg Ads?

Twitter’s new ad platform will begin by charging per thousand impressions, but will eventually switch to a model that the company calls “resonance.” Essentially, a sponsored tweet gains points based on factors such as retweets, favorites, impressions, and clicks. Combined, this resonance score will tell Twitter whether or not an advertisement is performing, which will affect its longevity and its price.

To us, the system sounds very familiar to Digg Ads. Digg Ads appear in the homepage stream as sponsored Digg submissions. Based on the number of diggs, buries, and clicks an ad receives, that ad will either stay on the homepage for longer and decrease in price, or it will be “buried” and the advertiser is charged more for submitting a bad ad.

While clearly there are differences between Digg Ads and Promoted Tweets, the same concepts and philosophies underly both: users know the difference between a good ad and a bad one, and thus they should get a say as to which ads appear in their streams. It’s not a bad strategy on Twitter’s part: Digg Ads have been successful thus far.

Could this be a fundamental shift in how online advertising is done? We’ll reserve judgment on that question until we see Promoted Tweets in action.

Will Users Click?

Will users embrace in-stream ads? Will they click them, thus giving Twitter the revenue it needs to become a truly profitable company?

There are a ton of factors involved in predicting click-through rates — it’s almost a science. Twitter seems to believe that a combination of relevancy and its in-house resonance score will be enough to address that issue. If Digg Ads are any indication, relevancy shouldn’t be a problem.

Another factor is the presentation of Promoted Tweets. On this charge, Twitter seems to be balancing the need to identify promoted tweets with the desire to integrate them seamlessly into the stream. Twitter ads look nearly identical to regular tweets — the only real difference seems to be the “Promoted By X” line at the bottom of the tweet. Many users will barely notice the difference and will thus click these links just as they would with any regular tweet.

To succeed, Twitter ads have to maintain a level of sincerity that has been one of the cornerstones of social media communication. They also have to be compelling and conversational, rather than overly-promotional. This is something Digg has been able to manage through Digg Ads, and it is something that Twitter must replicate if its model is to prevail.

If Twitter can fine-tune its resonance scale so that promotional, value-deprived advertisements are quickly expelled from the stream, the company may very well be able to entice users to click. It’s those clicks that will determine the fate of the platform, so we can only hope that Promoted Tweets is a success.

[sponsored tweet img credit: AdAge]

Reviews: AdAge, Digg, Twitter

Tags: advertising, Promoted Tweets, twitter



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