First Take Analysis: What Twitter’s “Promoted Tweets” Means To The Ecosystem

The Altimeter Group was pre-briefed by Twitter COO Dick Costolo last week about this upcoming launch, we’ve had some time to think over what it means to the industry. Help your boss fight through the clutter, send them this post.

Summary: Twitter has launched Promoted Tweets, combining paid and organic media. Brands can now advertise promoted tweets on search pages, however the community has power over which tweets will appear measured by Twitter’s new metric called “resonance” which factors in behaviors like the retweet, at, hash, avatar clicks. Brands can now purchase CPM based ads to promote these popular tweets at the top of a Twitter search term –even in categories they aren’t well known in, influencing awareness. Marketers beware: unlike traditional advertising or social marketing this is both a combination of earned media and paid media. For Twitter this experimental move makes sense as it taps into deep pockets of online advertisers without jeapordizing sanctity of the community as users will self select which tweets will resonate and thereby become promoted ads.

How it will work, a likely use case scenario:

  1. Twitter users will continue to interact with each other, and popular tweets will receive a high ‘resonance’ score from Twitter. Some of these Tweets will be created by brands, and some by the users themselves.
  2. Tweets with heavy resonance can be purchased by advertisers in a CPM basis to appear as the first ‘sponsored’ Tweet on a search term. The sponsored tweets will be clearly labeled and have a different background color.
  3. These promoted tweets will only stay if users continue to resonate with them, those that don’t will disappear and a different tweet with resonation will appear.

Matrix: What Twitter’s Promoted Tweets Business Model Means to the Ecosystem
This has several implications to the ecosystem as a whole, we’ve broken down the impacts to the various players in this matrix:

Player Direct Impacts What They Will Do What No One Tells You
Twitter Finally gets a business model beyond search deal partnerships with potential to scale. Taps into deep pockets of online advertisers. Experiment. Expect black and gray hat marketers to try to game this system, in order to obtain resonance. Twitter will constantly tune algorhythm like Google does. Expect this to cascade to their partners and grow into the ecosystem as Twitter aggregates resonation on other 3rd party sites
Twitter Users Have power over which promoted ads will stay visible Initially be shocked by changes, then learn they can help self select tweets that will be promoted.. In the real time resonace world users have a lot more power Power tweeters like celebs and digerati will be targeted by marketers to engage and resonate tweets. Twitter users that retweet tweets may be surprised to see their promoted tweets in search engine results ads.
Social Marketers The conversation is now being monetized, with changes to the outcomes of whats expected of the online conversation and engagement. Educate traditional marketers. These folks will try to increase resonance of tweets by interacting with community. Will build an inventory of top promotable tweets Don’t go overboard, make sure you think of this in the larger context of integrated marketing. Avoid shiny tool syndrome. Must pay close attention to what terms are resonating with community to build inventory
Direct Marketers and Advertisers Finally traditional advertisers and direct marketers have skin in the social game in a way they know. Flail. Many will try to buy their way in and obtain resonation without asking why a tweet resonates. Will fight over top searched terms in Twitter, expect a lot of contests to promote tweet engagement. Expect tension between this marketer and the social marketer if education is not completed.
Developers and Agencies A clear goal (resonation) has been put forth, with opportunity to get a cut of the incoming advertising dollars. Developers are waiting with baited breathe for Chirp developers conference this week to see how this will be tied in. Twitter has indicated that promoted tweets will spread to clients, expect revenue sharing to be offered Don’t buy the first ‘resonation solution’ that comes around, expect half a dozen vendors and agencies to approach brands in the next quarter offering the ability to increase ‘resonance’ and case studies will show increase in resonance.
Competitors and Search Engines A new player being in town a new form of advertising is afoot changing the game. Expect nervous deals to come to the table on how search engine results can factor in Twitter’s resonance. Expect players like MSFT and Yahoo to quickly launch their version of defining how the social web should be categorized. They will have the advantage of built in ad base of advertisers and millions more users. Expect existing Twitter partners Google Search and Microsoft Bing will fold this in and reward resonance and combine with page rank, or will create their own metric to reward social engagement

For Resonation, Brands Must Pay Closer Attention To Users –This Isn’t Traditional Spray And Pray. Power continues to be in the hands of the users, however brands that pay attention to why tweets resonate will have a leg up. here’s how you should approach this new space:

  • Change your mindset, as organic and paid merge: This is a combination of organic and paid ads, you’ll need skills from both worlds to be successful. Direct marketers should educate social marketers, and social marketers should explain how resonation occurs in the conversational web. Remember, this gives top tweets staying power beyond the constant stream of chatter. In the end, remember that users have power over which advertising inventory will be created, chosen, and allowed to stay as a promoted tweet.
  • Remember Twitter users have power over which promoted Tweets will work: Remember that users they get to choose which tweets can be put into the advertising inventory as their interaction will self select which tweets can become promoted. Secondly, promoted tweets that don’t yield community engagement will also fall off the stream. is that in the real time resonance world users have a lot more power. Brands must analyze what works for users first before promoting tweets.
  • Then, carefully pick tweets to be promoted by analyzing the conversation: First, monitor which tweets are already resonating with your brand, take note of what is causing it to resonate and in what context. Secondly, recognize that these tweets should have long term impact, not a daily special as the tweet is promoted, users will interact with it, forcing it into a viral loop. For best results, experiment with promoting tweets from your customers –not just those that you create.
  • Recognize that ‘Resonance’ is the page rank of microblogging: Advertising agencies and social marketing agencies will come out of woodwork with “resonance solutions”, yet most will do it wrong. Instead, look for a sophisticated partner that knows the value of social conversational marketing to create an inventory and the long term experience of an advertising agency. Expect resonation to also cascade to other social networks like Facebook and even community platforms and content management systems to derive what content should surface. Twitter has made nods to new dashboards to appear, expect your agency partners to align around resonation as the new ROI.

This post is the result of the collaborative efforts of the Altimeter team including Charlene Li (Leadership), Alan Webber (Web User Experience/Government), Michael Gartenberg (Mobile and Devices) and Christine Tran (Customer Strategy Research), learn more about the Altimeter Group. For more news, see Twitter blog, AdAge, on the web strategy blog, and NYT for details.

Comments

  1. Howard Liptzin says:

    Good review, thank. But you might want to correct the spelling error, folks. In the chart, you’ve got the poetic “algorhythm” instead of algorithm.

  2. Rob Brown says:

    Great article – appreciate the “use your head” drumbeat. This is ONE interesting, new social marketing tool.

  3. Great spotlight, with valuable tips. Can you clarify which it is, “resonance” or “resonation”? You appear to use both, and I suspect it should just be “resonance” throughout (resonation, even as an invented word, sounds a bit awkward to me).

  4. Great post. I am glad to see twitter finally making some moves at revenue creation. I’m not sure how well this will work because I question if enough people do searches to make it worthwhile. However, they would know better than I that info.

    I like your advice for brands too. Good stuff. Thanks.

Trackbacks

  1. [...] Esta semana la pieza creativa es el primer anuncio que se ha publicado en Twitter a través de su nuevo sistema de publicidad: Promoted Tweets. Se trata de un anuncio de Starbucks. Muy interesante el análisis que hacen desde Altimeter. [...]

  2. [...] asks some interesting questions about Twitter’s promotional strategy, building off a post by Altimeter Group. Unless you’re the advertiser, in this case, you’re probably taking the side of the [...]