Can Twitter become an Ad Network?

I haven’t written about Twitter in some time.  The main reason for this is that everyone else seems to have taken up the cause for me.  As well, us Canadians have recently lost our SMS updates due to a lack of revenues or some other reason I am not aware of.  In any case, I still use Twitter and read about it through the thousands of other bloggers who cover it so well.  It was an article in Advertising Age that got me jazzed to write about Twitter again.  In fact, I simply want to highlight the key points in the article found here on Advertising Age

The concept of using Twitter as an advertising network is an interesting one. Sam Lessin, the author of the article asks the question “what if certain Twitter users allowed marketers access to their feeds, and matched their user base with advertisers? Then, you would have an ad network and a business model that could provide revenue for both Twitter and its users.” Sounds simple, but really really interesting!

He goes through three steps that would put this concept into practice:

Step No. 1: Acquire inventory from publishers.

Every ad network needs inventory. In the traditional web, this means ad units next to content. In Twitter, this would mean the right to occasionally insert a tweet into a user’s feed. To make this functional, all one would need to do is allow users to enter their Twitter name and password (giving the ad network the ability to publish tweets on their behalf) and then have each user indicate an Amazon FPS account, PayPal, etc to which they would like to receive advertising revenue. You could add a few toggles to allow users to define how their feed can be monetized (specifying the frequency of promotional tweets they want, hours of the day they are willing to push ads, whether or not they are OK promoting no adult content, etc). To my knowledge, no one is actually doing this yet, but there are services like Twittertise which allow individuals or companies to schedule ad content to run on a single feed.

Step No. 2: Value and categorize your inventory.

Ad networks need to understand the nature and value of their inventory to be able to match the inventory with advertisers. This is where Twitter gets really fun. Using the Twitter API, you can first get a sense of how much reach each user’s feed has. More sophisticated models of valuing reach would include measuring things like how many followers each of the user’s followers has (the potential secondary impact), the propensity of those followers to re-tweet, or repeat information pushed out through the feed, etc. You could even screen for location based tweets to screen for local demographics.

In terms of understanding the nature of the users, you only need look at word frequency on the feed. Ideally you would also look at the content which other followers who subscribe to the feed to understand the ultimate audience directly. Many companies are brushing against these concepts, though no one is explicitly valuing a tweet to my knowledge. Summize (which was acquired by Twitter) had a big piece of the equation in the form of a twitter search engine. Countless services out there measure the reach of individuals on Twitter and create tag-clouds based on frequently used words. The upshot: people are very close to explicitly attaching a dollar value to a tweet on a given feed.

Step No. 3: Sell inventory to advertisers, quantify impact, and refine your model.

Finally, ad networks need to sell their inventory to relevant advertisers in the form of 140-word text ads with links to offers, and help those advertisers refine their targeting and messaging to increase ROI. More and more advertisers are experimenting with Twitter and how they can leverage the platform. To do this effectively with Twitter you simply need a system of measuring the impact of your tweets in a way which you can meaningfully feed back into a self-refining model of how you are valuing feeds. No one is after this yet, but a company like bit.ly which gives some analytics on click through rates on links inserted into communications platforms like Twitter is on the right path. In the end, it is just about refining a model of matching types of feeds, with types of followers, with the exact content, time of day, context, etc to get the desired response.

Tada, a Twitter ad network — abstractable to any social content.

Thanks Sam…

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2 Responses to “Can Twitter become an Ad Network?”

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1. Jeremy says:

   December 24, 2008 at 12:34 pm

   I call fail on step one. No way Twitter would survive spam tweets injected into a user’s feed. I’d stop following that person in a heartbeat. The real value of Twitter to the ad industry is as a vector for viral marketing. Make stuff that is so cool that people want to tweet about it and watch it rise to the top of the TwitScoop. Or provide bite size pieces of larger content, like this blog does. But try and shoehorn ads, no matter how targetted, into people’s feeds and I say the whole thing shrivels up and dies.
2. Donna says:

   December 30, 2008 at 11:58 pm

   Funny, I just wrote on my Twitter how very sick and tired I am of marketers marketing their stuff in the guise of following me. It’s a real turn off. If this sort of thing continues on Twitter, I’m out of there.